A Budget of Continuity and Confidence: Key to India's Global Aspirations

From rising global GDP from 10th to 5th position, overtaking the UK in 2022, to making valuable strides in industry, employment, and infrastructure—India's journey has been commendable. Yet, the question remains: How can this momentum be sustained? The answer lies in ensuring a consistent policy framework that fosters long-term confidence among businesses and investors.

While impressive progress has been made, sudden policy changes create uncertainty and make long-term planning difficult. Thus, with India poised to become the third-largest economy by 2027, the Union Budget 2025-26 assumes importance as it needs to seal in stability with selective reforms to meet newer challenges. A non-adversarial, stable, and predictable policy environment, with high-impact measures, will see accelerating growth in India and the $5 trillion economy goal attained well within three years.

Continuity of Policy as an Enabler of Growth

A stable policy environment is irreplaceable and plays a key role in infusing businesses with confidence, encouraging more investments, and driving innovation.It also assures that 98% of the existing policy framework will remain the same with small improvementsallowing businessmen to plan for the long term without worrying about regulatory surprises.

Long-term policy consistency has paid off for major economies:
•    United States: It has a continually focused policy on productivity, low tariffs, and investment in infrastructure. As a result, its GDP has grown to almost $29 trillion.
•    Germany: The predictability of Germany’s policy framework has made it a global industrial powerhouse. In 2023, exports accounted for 43.4% of the country’s $4.6 trillion economy.
•    Japan: Japan's consistent industrial policies centered on technology and manufacturing have turned it into a $4.1 trillion economy.
•    China: Valued today at US$18.5 trillion, China's relentless focus on infrastructure, industrialization, and global initiatives such as the Belt and Road have contributed to its strength as the second-largest economy in the world.

India can emulate these models and commit to long-term strategies, especially in high-growth sectors such as manufacturing, technology, and exports. Expanding the PLI to other sectors, such as nutraceuticals, edtech, and agritech could further strengthen India's industrial base.

Smarter Internal Governance: Focusing on Efficiency
While continuity ensures confidence, improving internal governance in the functioning of authorities is equally vital to enhance fiscal efficiency. Strong and diligent governance along with timely conduct of operations is essential to ensuring that there are no lapses in implementation or oversight. This approach will not only improve resource utilisation but also strengthen transparency and accountability in public spending.

Cultivating Resilience in Agriculture and Tackling Climate Change
Agriculture being the livelihood of most of the population in India, has mostly required focused reforms aimed at enhancing productivity and making it more resilient. There is a need to prioritise policies aimed at mitigating post-harvest losses through initiatives like "One District, One Warehouse"and creating cold chain infrastructure. Crop diversification, if backed up with strengthened MSPs, and export-friendly policies, can surely raise farmer's incomes. So, FPOs can play an instrumental role in transforming Indian agriculture when supported with incentives in the form of tax exemption coupled with digitised financing.
Additionally, an industry-wide tax break is needed for imported eco-friendly technology, large-scale water conservation projects, and rainwater harvesting to ensure long-term sustainability.

Targeted Reforms – Balancing Stability with Progress
This is not to say that stability is not important; rather, targeted reforms have become necessary to meet emerging challenges. Employment, skill development, and green energy assume critical positions and their challenges need to be urgently addressed. Though the national unemployment rate in September 2024 fell to 7.8%, the falling labour participation rate signals deeper structural issues. The Charter of Demands that the budget should focus on:
•    Establishing skill hubs in line with emerging industry requirements
•    Expanding globally recognised certification and vocational training programs
•    Increase the capacity of higher education to make the youth more productive for new-age industries
•    Encourage educational institutes to introduce courses specialising on sustainability

Communicating Stability to the World
A more transparent and predictable policy regime sends a more convincing signal that India is a reliable investment destination. This kind of continuity-which has been taken up enthusiasticallyall over the world-strengthens investor confidence and tightens up a bilateral trade relationship. 
To be sure of achieving US$2 trillion in exports by 2030, such initiativesshould square with existing needs, particularly tariff rationalisation, simplification of export procedures, and product competitiveness through linked incentives.

A Budget for Growth with Stability is needed for India considering the critical juncture in its economic journey. While targeted reforms are imperative to address immediate challenges, the cornerstones of this Union Budget must be policy consistency and improved governance. 

By emulating the suitable strategies followed by some of the developed countries, focusing on long-term stability, and implementing necessary reforms,the Indian Government can create an environment primed for sustained inclusive growth in India. A balanced Budget will strengthen investor confidence, spur faster industrial growth, and lead the country to a multi-trillion economy by 2047.

The author is the President of the IMC Chamber of Commerce and Industry and Executive Chairman & Managing Director of OmniActive Health Technologies