Almost seven years and eight budgets later, Finance Minister Nirmala Sitharaman knows what inexperienced runners learn the hard way: the flashy sprint at the start gets headlines, but marathons are won with disciplined pacing, strategic nutrition and the unglamorous work of logging base miles.
On a Sunday, Sitharaman, without poetry or fireworks, asked Indians to attempt something even harder—run an ultra marathon, a 21-year race for a developed nation in 2047. In her 85-minute speech, she laid down the framework that requires sprinting on some fronts (creative industries, AVGC labs in schools, service sector) while marathoning on others (semiconductors, rare earths).
After navigating a pandemic, inflation and now global fragmentation, she has learnt what this kind of race requires—building on strengths while maintaining discipline. “Sometimes boring budgets are good,” said Dharmakirti Joshi, chief economist at CRISIL. “Whatever growth momentum is there, it is more about sustaining that… The government is still committing capital spending from the budget, which means it will remain an important player in the investment story. Investment is about raising potential.”
The Economic Survey warned of a global economy sliding to managed disorder, with politicised trade and fragmented supply chains producing shocks “worse than the 2008 financial crisis”. The survey, helmed by the chief economic adviser to the government, V. Anantha Nageswaran, said while better placed than many economies, India must prioritise domestic growth and shock absorption. “India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint,” it put it bluntly.
“As India navigates the dual imperatives of growth and macroeconomic stability, this budget strikes a chord of cautious optimism,” said Lekha Chakraborty, professor at the National Institute of Public Finance and Policy. “By allocating significant resources to semiconductors and rare earths, the government is 'sprinting' towards strategic autonomy, while maintaining a steady 'marathon' of fiscal consolidation.”
Against this backdrop, India has negotiated trade deals with the US and the European Union, helping the manufacturing push gain immediate access to overseas markets. “The big push to manufacturing sector is very important. This will enable domestic manufacturing to benefit from various trade deals,” said Gopal Krishna Agarwal, spokesperson for the BJP.
The budget marked a strategic shift toward new-age sectors such as semiconductors, artificial intelligence, and the creator economy to enhance global standing.
The launch of India Semiconductor Mission (ISM) 2.0 aims to design full stack Indian IP and fortify supply chains. Coupled with doubling the outlay to Rs40,000 crore for the Electronics Components Manufacturing Scheme (ECMS), this aims to enhance India’s position in global supply chains.
In running terms, this is VO2 max training. ISM 2.0 focuses on building the entire ecosystem over 10-15 years. “Focus on sunrise sectors like semiconductors, rare earth metals, data centres, nuclear energy, and biopharma will give big boost to Indian economy,” said Agarwal.
The budget promises tax holidays till 2047 for foreign cloud service providers using data centres in India. American and European tech companies need serious commitment before relocating facilities.
Dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu will promote mining, processing and manufacturing. Currently, China controls 70 per cent of global rare earth mining. The corridors signal a commitment to building the entire value chain. The budget exempts basic customs duty on import of capital goods required for processing critical minerals and full exemption for 25 critical minerals. This benefits space, defence, telecommunications and renewable energy.
This coincides with External Affairs Minister S. Jaishankar’s visit to the US for the first Critical Minerals Ministerial to formalise bilateral cooperation and remove over-dependence on China.
THE ORANGE ECONOMY
Moving beyond chips, Sitharaman introduced the Orange Economy—cultural and creative industries like arts, gaming, and fashion. The animation, visual effects, gaming and comics (AVGC) sector is projected to require 2 million professionals by 2030.
The budget envisages setting up AVGC content creator labs in 15,000 secondary schools and 500 colleges. “Globally, the Orange Economy generates $2.3 trillion in revenues—3 per cent of GDP—and 30 million jobs,” said Chakraborty. “The budget signals a strategic pivot toward the Orange Economy as a jobs engine.”
The budget also announced a new National Institute of Design in eastern India. “This enhances creative outputs rankings, fostering human capital for a projected $50 billion media and entertainment sector by 2029."
When Sitharaman raised Securities Transaction Tax on futures trading to 0.05 per cent, she addressed concerns of youth losing money to ‘gambling.’ Joshi argued these nudges targeted growth and employment. “Services are employment-intensive. The Orange Economy generates jobs,” he said. Sitharaman also announced reviving 200 legacy industrial clusters for manufacturing.
BUILDING ON STRENGTH
When preparing for marathon, put more effort in what you are already doing right. Defence spending hit Rs7.85 lakh crore—15 per cent of total expenditure. Biopharma SHAKTI got Rs10,000 crore to build clinical trial sites and domestic biologics production.
The budget announced Bharat-VISTAAR, a multilingual AI tool integrating AgriStack portals with agricultural practices for millions of farmers.
Seven high-speed rail corridors were announced as "growth connectors"—Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Delhi-Varanasi, among others. Twenty new National Waterways will slash logistics costs by 20-30 per cent, starting with NW-5 in Odisha.
The Rs10,000 crore SME Growth Fund will back small businesses. The Rs5,000 crore per City Economic Region is reform-linked—states must improve business environments to receive funds.
THE HARDEST MILE
Sitharaman scaled public capital expenditure to Rs12.2 lakh crore while maintaining fiscal consolidation. Fiscal deficit: 4.3 per cent of GDP for FY27. Debt-to-GDP: 55.6 per cent. Real GDP growth: projected over 7 per cent.
“The fiscal deficit target of 4.3 per cent and in long term to 3 per cent underscore commitment to macroeconomic stability,” said Chakraborty. “However, the real test lies in navigating geopolitical risks. Can India harness its demographic dividend while adapting to AI?”
“Increasing infrastructure spending, while focusing on reducing debt to GDP ratio show how efficiently government finances are being managed,” said Agarwal.
While the budget kept allocations for social sectors intact, there were no populist giveaways to the middle class or to states going to polls. “This budget focuses on long-term vision and shuns populist policies,” said Agarwal.
The Economic Survey’s running metaphor guided the budget, but the terrain remains uncertain. Anxieties on job creation and critical supply chains precede the finish line. As Chakraborty said, “Investing in human capital will be crucial in determining India's growth story to be one of sustainable progress.”