My last week’s piece discussed about the vision and strategy-directional comparisons between Pakistan and India through the lens of the latest Indian budget 2025-26, announced a couple of weeks back. So, let’s now to try to actually ascertain that what exactly has been the thinking and vision behind this latest Indian budget, which is being hailed as a bold initiative – given the Indian historical economic context – by both India’s local and credible foreign analysts? After flirting with consolidation and conservatism for almost 5 years, the last election was a wake-up call for the Modi government where the people clearly indicated that in all this BJP’s mumbo jumbo of India shinning, global corporate footprint, fancy projects, Ambani wedding sagas, etc., the people or the common man was ignored and this will not be tolerated – good governance is about people and not about self-claims of success, because a false pretence sooner or later boomerangs.

Perhaps, the government in Pakistan should indulge in such an honest self-reflection as well, since mere self-accolades will not do! The elections made it clear to all stakeholders that India is at the economic crossroads. The leaders can talk all what they may about a decade of significant lift in the economic fundamentals, the fact remains that some basic fundamental rights to a sustainable living still eludes the majority of Indians. Meaning, it is apparent that the next stage of growth has to be for the country to somehow break the prevalent status quo. However, this is both, challenging and risking the unpredictable, hence, a tough ask. For one, the Trump administration keeps everyone guessing on who the next target would be on its ‘America first’ slogan and needless to say that its early days shenanigans seem to augur poorly for global trade in general; second, the global economic circumstances are inclement, as there are fears that China’s (the engine of global growth) growth may have already peaked; and third, while India may be stating an overall growth rate of 6%+, its numbers actually hide more than what they reveal.

Like in Pakistan, the trouble in India has also been that the government has tried to be the main driver of growth and investments, a flawed endeavour that is neither sustainable nor works. To get real efficiencies cum competitiveness and to avoid corruption, incompetence and a consistent burden on the national exchequer, the growth has to be private sector led. Time and again, we have seen governments in Pakistan also, both at the state and the provincial levels to try and go against this established wisdom and as a result have now added countless new projects to an already long list of loss-making state-owned enterprises. Additionally, projects by the state or by its institutions invariably tend to add to rent-seeking and free market distortions. Despite earlier tall claims on success stories of Indian state enterprises like railways, airlines, shipping, utilities & others, today the reality is that almost all are financially stuttering and the government finds itself constrained to put more valuable capital into them, because it is not only about capital losses, but even more importantly, they continue to fail in providing market comparable services, meaning giving no real value for the money. In this budget, the Indian economic managers have done well to instead see this malaise, as an ideal opportunity to ring some long pending structural reforms vis-a-vis land legislations, farm laws, tweaking GST that has been taking down businesses, and focusing strongly on improving ease of doing business. The message from the finance minister was loud and clear: “We are here not only for raising revenue for the bureaucracy to spend, but are responsible for the economy as a whole.

So, if in the process of garnering some small revenues, we are hurting the national industry, this will stop to ensure that not only India does not de-industrialise, but also that the local industry continues to grow competitively and outpace the world.” The idea being to take cognisance of the fact that revenues only come when there is profit in the markets and any government that is hell bent on killing the golden goose does more harm than good to the national economy. The wake-up call in India came when a symposium on StratNews Global revealed how leading Indian businesses have started to relocate to the Far East to destinations like Thailand and Vietnam, in order to escape harassment at the hands of regulators and tax sleuths. While this government’s intentions (as it has been in office for over a decade now) may have been to adopt a pro-business & pro-industry approach, somewhere along the line it got hijacked by the bureaucracy and went for an over kill on taxation and on ceding unhealthy powers to the regulator. It has now come to realise its mistake and has tried to correct it in this budget by recognising the age-old mantra from the Mauryan days that tax revenues can only be a by-product of growth and well being of the people it governs! Sincerely, hope that the concerned on this side of the border are also listening and can correct course before more damage is caused!

Dr Kamal Monnoo
The writer is an entrepreneur and economic analyst. Email: kamal.monnoo@gmail.com