The Union Budget is often considered a blueprint for a country’s economic progress, setting the direction for growth, welfare, and fiscal management. However, the Budget 2025, rather than being a transformative step towards India’s development, appears to be an attempt to normalize the credit culture among all aspirational classes. This shift towards easy credit access, while seemingly inclusive, raises concerns about long-term economic stability and financial discipline.
The current budget reflects a trend where individuals, businesses, and even government institutions are being encouraged to operate on borrowed money. Instead of investing in policies that directly promote sustainable development—such as industrial growth, employment generation, and infrastructure enhancement—the government is facilitating greater credit accessibility for various sections of society. From MSMEs and startups to middle-class homebuyers and agricultural sectors, the budget introduces credit-linked incentives, subsidized loans, and relaxed borrowing norms.
While this might increase short-term liquidity and consumption, it fosters a culture where aspirations are fueled by debt rather than real income growth. This shift can be risky in the long run, as it may lead to higher defaults, financial stress, and over-dependence on loans instead of productive economic activities.
A truly developmental budget should focus on strengthening economic fundamentals—manufacturing capacity, technological advancements, export competitiveness, and employment. However, this budget largely relies on making credit available, which only addresses surface-level economic needs without strengthening the core of India’s economic engine.
For instance, while infrastructure spending has been projected as a key pillar, much of the funding is being routed through public-private partnerships and financial borrowing rather than direct capital infusion. Similarly, the push for digital transactions, fintech expansion, and startup funding relies on credit mechanisms, reinforcing the idea that economic growth should be debt-driven rather than production-driven.
One of the most concerning aspects of the budget is its subtle push towards making credit a normalized way of fulfilling aspirations. The middle class, which is already burdened with home loans, personal loans, and education loans, is being further encouraged to rely on borrowed money for improving their lifestyles. Small businesses are being offered credit extensions and interest subsidies, but there is little focus on market expansion, skill development, or innovation support that could create self-sustaining businesses.
If credit expansion is not accompanied by real income growth and employment security, it could lead to a situation where individuals and businesses struggle with repayment obligations. A rising debt-to-GDP ratio, increased loan defaults, and banking sector vulnerabilities may become unintended consequences of this credit-driven economic model.
While the government may present this budget as a step towards economic empowerment, it risks normalizing a society where aspirations are met not through sustainable earnings but through easily available loans. A true development-oriented budget would focus on strengthening production, creating employment opportunities, and fostering innovation rather than promoting a credit-dependent economic culture.
The real question, therefore, is whether India is moving towards genuine development or merely normalizing a culture of borrowing that could have long-term economic repercussions. If the focus continues to be on making loans more accessible rather than making incomes more stable, the illusion of progress may eventually give way to financial distress.
