Budget ignores private sector’s lack of confidence in economy and the need to expand the welfare net

Recently, the Union government asserted that the Indian economy is experiencing a “Goldilocks moment” (a coinage borrowed from the popular children’s tale to denote when everything is just right).

- Rajeev Gowda is a former MP and chair of the Congress party's research department. Akash Satyawali is joint secretary of the Congress party's research department. The views expressed are personal

Inflation was under control, and the real rate of growth was the highest in the world. Unfortunately, that too is a fairy tale. India’s growth rate is at least two percentage points below what is needed to capitalise on a demographic dividend. Investors are clearly not buying the story. Foreign and domestic investors have turned 2025 into the year that saw the flight of capital from India, in turn, leading to the dramatic depreciation of the rupee.

Global headwinds that followed the imposition of the Trump tariffs meant that India faces significant pressure. By the time the government works out a trade deal with the US, a large number of workers in sectors such as textiles would have lost their jobs. This compounds the challenge on the domestic front, where unequal growth and the steady dismantling of welfare have stressed household finances — savings are at a low and debt is ata high.

This budget was an opportunity for finance minister Nirmala Sitharaman to assuage investors and the common people. However, she has failed on both fronts.

In the last budget, the finance minister highlighted four engines of growth — agriculture, micro, small and medium enterprises (MSMEs), investments, and exports. Reforms were to be the fuel for these engines. That formulation has been discarded for three