The Union Budget has steadily acquired the trappings of a national event. Markets hold their breath, television studios turn theatrical, and expectations build that a single speech will unveil tax cuts, reform breakthroughs, and growth accelerators all at once. Yet a closer examination of policymaking under Finance Minister Nirmala Sitharaman suggests that this annual hype is increasingly unwarranted. Many of the most consequential economic measures of recent years have been conceived, announced, and implemented well outside the Budget framework.
This is not a peculiarity of one year or one government. It reflects a deeper shift in how economic governance now works. In a large, complex, and fast-changing economy, policymaking has become continuous rather than episodic. The Budget remains important, but it is no longer—if it ever was—the sole or even primary vehicle for reform.
Ordinance Era
Consider some of the most impactful decisions taken during this government’s tenure. The sharp cut in corporate tax rates in September 2019, which reset India’s investment proposition, was introduced through an Ordinance, not a Budget speech. The production-linked incentive (PLI) schemes, which now underpin India’s manufacturing push across electronics, pharmaceuticals, and automobiles, were rolled out through cabinet approvals and detailed notifications, largely outside the Budget spotlight. Labour law reforms—long regarded as politically fraught but economically necessary—were enacted through Parliament, not announced on Budget day.
The same pattern is visible in financial sector reform. The clean-up of bank balance sheets, recapitalisation of public sector banks, consolidation of state-owned lenders, and repeated refinements to the Insolvency and Bankruptcy Code were not Budget-centric exercises. They unfolded over several years through regulatory action, legislation, and administrative decisions. Market reforms—from changes in bond market microstructure to tighter disclosure norms and improved settlement systems—have similarly emerged through regulators rather than Budget pronouncements, yet have arguably done more to deepen India’s financial architecture than many headline fiscal measures.
Even in fiscal management, where the Budget ostensibly reigns supreme, reality is more incremental. Subsidy rationalisation, adjustments to food and fertiliser support, changes in import duties, calibrations of windfall taxes, and shifts in capital expenditure priorities have often been executed between Budgets. These decisions, taken in response to inflation shocks, global commodity swings, or supply disruptions, can materially influence growth and fiscal outcomes—yet they rarely command the attention reserved for February 1.
Balancing Grand Expectations
This divergence between perception and practice helps explain why Budgets are so often declared “disappointing”. Each year, commentators and markets load the exercise with unrealistic demands: sweeping tax cuts, instant consumption revival, transformational reforms across land, labour, and capital, and painless fiscal consolidation. The Budget, constrained by arithmetic, politics, and macroeconomic realities, can seldom meet these expectations. When it does not, the verdict is swift and harsh, even if the document performs its core function competently.
To be clear, the Union Budget is not irrelevant. It remains the principal statement of the government’s fiscal strategy. It allocates resources, signals priorities, sets deficit targets, and anchors accountability to Parliament. But its role is frequently overstated, especially in an era when many policy levers lie outside the annual budgetary cycle.
Indeed, some of the most far-reaching decisions are better taken away from Budget day precisely because they require flexibility. Tax rate changes, for instance, may need to respond to global developments or domestic shocks rather than an annual timetable. Regulatory reforms often demand consultation, iteration, and sequencing that do not lend themselves to one-off announcements. Structural changes—in labour markets, logistics, energy, or digital governance—are typically legislative or administrative in nature, unfolding over multiple years.
There is also a political economy dimension. The Budget has become such a high-stakes event that it can deter boldness rather than encourage it. Announcing major reforms in a televised speech, with instant market and political reaction, raises the cost of missteps. By contrast, rolling out reforms incrementally—through consultation papers, pilot projects, or phased notifications—allows course correction and reduces disruption. In that sense, the shift away from Budget-centric reform may reflect greater policy maturity.
The obsession with the Budget also distorts public understanding of economic governance. It fosters the illusion that growth, investment, and jobs can be jump-started by a single fiscal document, rather than by sustained improvements in regulation, administration, and state capacity. It encourages a short-term focus on giveaways and headline numbers, at the expense of longer-term institutional reform.
None of this is to deny that Budgets matter politically or symbolically. They remain moments of democratic accountability, when the government lays its fiscal cards on the table. They shape narratives and signal intent. But narratives are not outcomes, and intent is not implementation. The real work of reform happens in the months and years between Budgets—in ministries, regulators, and legislatures.
Perhaps the problem, then, is not with the Budgets themselves, but with the expectations placed upon them. As India’s economy grows larger and more complex, governance will inevitably rely more on steady, technocratic decision-making and less on annual set pieces. A more mature public discourse would recognise this shift.
Dialling down the hype around the Union Budget would not diminish its importance; it would put it in proper perspective. It would allow Budgets to be judged on what they are meant to do—manage public finances responsibly—rather than on what they cannot realistically achieve. And it would focus attention where it increasingly belongs: on the quieter, less glamorous but far more consequential business of policymaking beyond the Budget glare. India’s economic ambitions will be better served when decisions are taken when they are needed, not when the calendar demands a grand annual reveal. As former US Treasury Secretary Larry Summers once said, “Economic policy is not an event; it’s a process.”