Union Budget: How 8 Budgets presented by FM Sitharaman reshaped India's power game

The Union Budget is arguably the most significant economic policy document presented by the Indian government each year, shaping the nation's financial trajectory, development goals, and welfare initiatives. Finance Minister Nirmala Sitharaman's tenure, marked by the presentation of eight budgets, stands out for navigating India through unprecedented economic challenges, including a pre-existing slowdown and the severe disruptions caused by the COVID-19 pandemic. Her budgets have been instrumental in laying the groundwork for India's ambitious 'Viksit Bharat' (Developed India) vision.

**Background Context:** The Union Budget, formally known as the Annual Financial Statement, is mandated by Article 112 of the Indian Constitution. It details the government's estimated receipts and expenditures for a financial year (April 1 to March 31). Before Sitharaman's first budget in July 2019, India was already grappling with a decelerating economy, compounded by global trade tensions and domestic demand issues. The subsequent arrival of the COVID-19 pandemic in early 2020 presented an unparalleled crisis, demanding immediate and substantial fiscal interventions to protect lives and livelihoods, and to prevent a complete economic collapse.

**What Happened (Sitharaman's Approach):** Nirmala Sitharaman's budgets adopted a pragmatic and resilient approach, characterized by a delicate balance between fiscal discipline, strategic capital expenditure, and robust welfare support. Faced with the pandemic, her budgets focused on immediate relief measures, such as the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) which provided free food grains, and various stimulus packages to support businesses and individuals. Concurrently, she emphasized boosting public investment in infrastructure, recognizing its multiplier effect on job creation and long-term economic growth. This focus on capital expenditure, evident in significantly increased allocations for roads, railways, and digital infrastructure (like the National Infrastructure Pipeline and PM Gati Shakti), was a deliberate strategy to crowd in private investment and enhance India's productive capacity. While maintaining a commitment to fiscal prudence, as outlined by the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, her budgets also allowed for necessary flexibility in deficit targets during crisis periods to support growth and welfare, gradually consolidating the fiscal position as the economy recovered.

**Key Stakeholders Involved:** The preparation and approval of the Union Budget involve multiple critical stakeholders. The **Finance Minister** (Nirmala Sitharaman) is the chief architect, responsible for presenting the budget and outlining the government's economic vision. The **Ministry of Finance**, particularly the Department of Economic Affairs and the Department of Expenditure, plays a pivotal role in drafting the budget and consulting with various ministries. **Parliament**, primarily the Lok Sabha, holds the power to approve the budget, reflecting democratic accountability; while the Rajya Sabha can discuss, it cannot vote on demands for grants or reject a Money Bill (as defined in Article 110 of the Constitution). **NITI Aayog** provides crucial policy inputs for long-term strategic planning. The **Reserve Bank of India (RBI)**, while independent, coordinates monetary policy with the government's fiscal policy. Ultimately, **Indian citizens and businesses** are the primary stakeholders, as the budget's tax proposals, spending allocations, and policy directions directly impact their economic well-being and opportunities.

**Significance for India:** These budgets are significant for India's journey towards becoming a developed nation. By prioritizing capital expenditure, they aimed to create a robust physical and digital infrastructure, essential for enhancing productivity, competitiveness, and attracting investment. The emphasis on welfare support during crises ensured social safety nets, preventing widespread distress and fostering inclusive growth. Furthermore, the budgets introduced structural reforms in various sectors, promoting ease of doing business and fostering innovation. This strategic direction, particularly in the post-pandemic recovery phase, has been crucial in maintaining India's position as one of the fastest-growing major economies globally, propelling the 'Viksit Bharat @2047' ambition through sustained growth, job creation, and improved living standards.

**Historical Context and Future Implications:** Historically, India's budget-making has evolved from a revenue-expenditure statement to a sophisticated tool for economic management and social engineering. Landmark budgets, such as Manmohan Singh's 1991 budget, ushered in economic liberalization. Sitharaman's budgets build on this legacy by focusing on next-generation reforms, digital transformation, and green growth, positioning India for future challenges. Looking ahead, the implications of these budgets are profound. The sustained focus on capital expenditure is expected to yield long-term dividends in terms of economic capacity and resilience. However, challenges like global economic uncertainties, inflation management, job creation for a young population, and further fiscal consolidation remain. The trajectory set by these eight budgets emphasizes a future where India leverages its demographic dividend and digital prowess to achieve inclusive and sustainable growth, underpinned by a robust public finance framework and a competitive business environment.

**Related Constitutional Articles, Acts, or Policies:**

* **Article 112:** Defines the 'Annual Financial Statement' (Union Budget).

* **Article 110:** Defines a 'Money Bill', under which most budget-related legislation falls, granting the Lok Sabha primary power.

* **Article 265:** States that no tax shall be levied or collected except by authority of law.

* **Fiscal Responsibility and Budget Management (FRBM) Act, 2003:** Provides a legal framework for fiscal discipline, guiding deficit and debt management.

* **Goods and Services Tax (GST):** A significant indirect tax reform impacting government revenues.

* **National Infrastructure Pipeline (NIP) & PM Gati Shakti:** Major policy initiatives for infrastructure development, heavily funded through budget allocations.

* **Production Linked Incentive (PLI) Schemes:** Introduced in budgets to boost domestic manufacturing and exports.