Budget 2026: Will Finance Minister Nirmala Sitharaman be able to reform the economy?
How will the policy debate shape up?
India’s policy debate is still framed as if the problem were stimulus versus consolidation. That debate is largely obsolete.
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What is the binding constraint for Budget 2026?
The binding constraint is not money. It is throughput, i.e., how quickly decisions are made, contracts enforced, capital deployed, land assembled, customs cleared, credit priced, and cities serviced.
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Will Budget 2026 stabilise growth?
If Budget 2026 limits itself to tariff tweaks, capex continuity, and incremental deregulation, it will stabilise growth. But it will not raise the frontier.
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How will Budget 2026 become truly radical?
Budget 2026 must reform the state because the economy has outgrown it. That would be a truly radical budget.
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What about urban reforms?
Urban India remains trapped in a fiscal adolescence, dependent on transfers, unable to borrow, and incapable of monetising its own growth.
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What about Customs?
Customs must be treated as economic infrastructure and not tax administration. India still runs customs as a revenue-protection agency in an economy where growth depends on speed, not tariffs.
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How to deal with capital costs?
India’s cost of capital remains structurally high because government borrowing crowds out risk pricing. The usual response is gradual fiscal consolidation.
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