The Union Budget 2025-26 has raised a critical question—does it truly promote development, or will it deepen economic inequality? Every budget reflects a country's economic policies, and it is essential to analyze whether its benefits reach all sections of society. While the Finance Minister claims that the budget prioritizes infrastructure, industrial growth, Digital India, green energy, agriculture, and rural development, the key question is whether its impact will be widespread or limited to specific groups.
Though subsidies and loan waivers have been announced for the agricultural sector, fundamental reforms are necessary to improve productivity. A clear policy on Minimum Support Prices (MSP) is required; otherwise, farmers' issues will persist. The expansion of rural employment schemes like MGNREGA is expected, but the critical question remains whether adequate funds have been allocated for them.
If government healthcare services are not strengthened, people may be forced to rely on expensive private healthcare, leading to economic exploitation of the poor and middle class. Similarly, without sufficient funding for public schools and higher education institutions, equal opportunities for students from all backgrounds will remain an illusion. The budget has been wrapped in slogans like "Sabka Vikas," "Economic Reforms," and "Atmanirbhar Bharat," but will it truly empower the poor, youth, farmers, and women? Or is it a strategy to transfer wealth from ordinary citizens to corporate houses and foreign financial institutions?
The government has allocated ₹10.18 lakh crore for capital expenditure, supposedly for infrastructure and development projects. However, the real question is: who will benefit from this spending? Public money is used to build roads, airports, and railways, but these assets are later privatized and sold at low prices to large corporations. This suggests that public wealth is being systematically transferred to private entities. Between 2019 and 2023, assets worth ₹4.3 lakh crore were privatized, and now the government has launched the "Asset Monetization Scheme," under which public assets will be sold.
Government-owned companies are deliberately weakened to benefit private corporations. Companies like Air India, BSNL, and HPCL were shown as loss-making before being sold, while conglomerates like Reliance, Adani, and Tata continue to earn massive profits. The policy of weakening public enterprises for privatization and benefiting big businesses is clear.
The budget includes tax relief claims, stating that incomes up to ₹12 lakh will be tax-free. However, this is misleading. India's tax revenue relies heavily on indirect taxes. In 2023, 70% of the government's tax revenue came from indirect taxes (GST), meaning that poor and middle-class citizens bear a heavier tax burden, while billion-dollar corporations receive substantial tax exemptions. While large corporations receive tax benefits, ordinary people pay 18% GST on essential goods.
In 2023, the richest 10% of Indians contributed 80% of total tax revenue, but several billion-dollar companies paid zero taxes. The government has allowed 100% foreign direct investment (FDI) in the insurance sector, meaning that insurance companies will now be controlled by foreign investors, and profits from Indian consumers will go to foreign financial institutions.
While the government claims to support the poor and small entrepreneurs with loans, these schemes may create debt traps. Street vendors have been offered UPI-linked credit cards worth ₹30,000, while women, Dalits, and tribals can avail loans up to ₹2 crore. Small businesses have been promised a ₹10,000 crore fund. However, loans are not financial assistance; they create financial burdens. If a borrower faces economic downturns or natural disasters, these debts become unmanageable.
The government aggressively collects debts from the poor but writes off corporate loans. Between 2017 and 2023, ₹10.72 lakh crore in corporate loans were waived, while farm loan waivers are consistently opposed. In 2023, ₹5.3 lakh crore in agricultural loans were waived, but small farmers remained in distress, leading to continued farmer suicides.
Despite major announcements in education and healthcare—such as 10,000 additional medical seats, Atal Tinkering Labs in 50,000 schools, and 10,000 fellowships in IITs—budget cuts tell a different story. Since 2014, government schools and universities have faced continuous funding reductions. The AIIMS budget was slashed by 30%, while tax benefits were extended to private hospitals. The decline of public schools has forced the poor and middle class into expensive private institutions.
The budget also makes ambitious promises for Bihar, including a new airport project, the Koshi Canal Project, a Makhana Board, and new industrial projects. However, is this genuine development or an election strategy? Over the past decade, 60% of announced projects for Bihar have remained incomplete. Will the Koshi Canal Project be finished before the next elections, or is it just a publicity stunt?
The 2025 budget reveals that the government collects taxes from ordinary citizens and redirects them to corporate houses in the form of concessions and loan waivers. The poor are trapped in debt while the rich consolidate their wealth. Public services are being weakened to promote privatization, and national assets are being sold under the guise of development.
This budget is not a blueprint for economic justice but a systematic plan to redistribute public wealth to the wealthy elite. The most significant issue of economic inequality revolves around job opportunities and wage growth. While technology-driven industries are expanding, job opportunities for unskilled workers and the underprivileged are shrinking. If new investments and policies remain confined to large corporations, economic disparity will only worsen.
For inclusive growth, the government must implement crucial reforms: tax relief for workers and the middle class, effective implementation of welfare schemes, increased investment in healthcare and education, and strong support for small businesses. Additionally, sustainable growth requires incentives for environmentally friendly industries.
The policies in this budget appear to promote development, but time will determine whether their benefits are widespread. If growth is limited to select individuals, economic inequality will escalate. Ultimately, the effectiveness of government policies and their implementation will determine whether this budget truly fosters development or deepens economic inequality.
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*Journalist
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