Some more ‘Kartavyas’ she should also have looked at

By: J Mulraj

Image created using Raphael

On February 1st, Finance Minister Nirmala Sitharaman presented the Union Budget, her ninth consecutive Budget, the highest for any Finance Minister. In earlier times, the Union Budget was avidly followed by investors, because changes in direct and indirect taxes (especially excise and custom duties) could significantly impact corporate profits, and hence stock prices. They would flock that evening to the trading ring of the Bombay Stock Exchange, to listen to Nani Palkhiwala, and, later, Rusi Taraporevala, unravel the intricacies.

Nowadays, indirect taxes have been encapsulated in GST (Goods & Services Tax), where changes in slab rates are announced infrequently, and independent of the Budget, and changes in direct tax rates are also, correctly, infrequent. The Union Budget thus is a platform to present the Governments longer term vision and the path towards it.

In presenting the 2026 Budget the FM proposed three kartavyas , or the core duty and obligations, of the Government, towards the path of a Viksit Bharat (a developed India). These are: 1. To accelerate and sustain economic growth by focusing on improved productivity and competitiveness; 2. To fill the aspirations of people, making them strong partners in India’s prosperity; and 3. To ensure that every family/community/region has access to resources/amenities and opportunities.

All of these are well articulated and necessary steps for our future path.

The FM has kept India’s fiscal deficit at 4.4% of GDP, which, for a large nation with the highest GDP growth amongst large economies, of 7.4%, is a commendable achievement. India’s debt/GDP ratio is also restrained at 55.6% of GDP.

There are, however, other ‘Kartavyas’ that are crucial for the present.

The ‘Kartavya’ of delivering fair and speedy justice, is a foremost duty for any democratic Government. With a backlog of 50 million cases, India is a case of justice delayed being justice denied. Victims of Ponzi scheme are orphaned by investigative agencies, courts and policy makers.

The NSEL (National Spot Exchange Limited) Ponzi scam, exposed in 2013, victimised 13000 investors who suffered losses of Rs 5400 crores. NSEL has obtained injunctions from Bombay High Court against 18 defaulters regarding claims of Rs 4515 crores. The Enforcement Directorate has frozen assets of defaulters of Rs 11981 crores, double the scam amount- why can they not be distributed to victims? Finally, after waiting for 12 years, a majority of the 13000 victims agreed to a one time settlement which resulted in a significant haircut for them.

But even this settlement is delayed in a judicial spiderweb.

And, when they want to, judges can deliver speedy justice. As they did, last week, in Jaipur, where three men, accused of theft, were charge sheeted at 11.30 am and sentenced by 5 pm the same day!

So, Mrs Sitharaman, if you sincerely want to do your ‘Kartavya’ you should look at the sorry plight of victims of such fraud and ensure that your administrative, investigative and judicial systems help the victims and not the fraudsters. You did, after all, stress on ‘Action over Ambivalence’ in your Budget speech.

If you are collectively unable to help victims of fraud, you should dispense with your dream of a Viksit Bharat.

Last week, amongst geopolitical upheavals, the BSE Sensex ended at 83580,  up 1311     points over the week.

In China President Xi Jinping has arrested PLA senior most General, Zhang Youxia, causing a huge political upheaval. The outcome is uncertain, with several opposing factions jockeying for control.

In Japan, PM Sanae Takaichi has called for early elections, on Feb 8th. If candidates make populist spending promises, it would strain Government finances, especially after a recent spike in Japanese bond yields. This spike is threatening the global financial system, as it will lead to an unwinding of the Japanese yen carry trade. The unwinding can adversely impact stock markets.

In Iran, the US has positioned one of it’s strongest carrier groups, the Abraham Lincoln, near the Iranian coast, poised to attack, with a view to a regime change operation. Iran is using asymmetrical warfare, relying on a drone swarm to attack the carrier group. The situation has become dangerous because Russia and China are conducting military exercises in the region. Any inadvertent action can escalate events out of control.

In America, Government debt has hit $ 38.5 trillion, more than it’s $31 trillion GDP. This figure does not include unfunded liabilities, $ 80 – 100 trillion, on account of pension funds, social security etc. This represents the amount of top-up of funds needed to provide returns to meet the liabilities, which has not been done by an over indebted system. Somebody should switch off the fan before it’s hit by the excrement, as it will.

Another threat to the whirling ceiling fan is the $1.5 trillion debt repayment liability that falls due in 2026 by owners of commercial real estate (CRE). The closure of small businesses and also of offices due to WFH (work from home) has eviscerated the viability of the CRE sector. The burden will inevitably fall on community banks, like it did, last year, on Silicon Valley Bank. These financial time bombs will cause a GFC type of crisis. The canary has been spotted in the coal mine! The Illinois Department of Financial and Professional Regulation closed down the Metropolitan Capital Bank & Trust. It was acquired, later, by First Independence Bank of Chicago.

Amongst all this turmoil, India stands out as an exception, displaying a consistently high GDP growth, the highest of any large economy. It has concluded a trade deal with USA under which tariff rates have been lowered from 50% to 18%. The BSE Sensex gained over 2000 Points on the news. The recent trade deal with EU also gives it market access to Europe de-risking dependence on a whimsical US President.

Disruptive technologies will affect several businesses. Indian IT sector companies’ stocks have had a great run, and have established IT Services dominance, globally. Last week, however, a US AI company, Anthropic, released 11 plug-ins, to demonstrate that coding can be done using AI, faster, and cheaper, than software engineers can. India IT stock prices fell drastically.

But they should have anticipated, and prepared for, the coming technology disruption to their business. It was recently, in late November 2025, that Infosys announced a Rs 18,000 crores share buy back, at Rs 1800/share. Now the share price is below that. It could have used the Rs 18000 crores for other purposes; perhaps to re skill engineers to make full use of AI, or, which seems likely, as lay off compensation. Given the technology disruption, IT Services companies may be compelled to downsize.

India will need to build on it’s GDP growth, and to take full advantage of various trade deals it has entered into. But India has lots of reforms to undertake.

The unfinished agenda is judicial reforms, crack the whip on corruption, urgent agriculture reform to improve terms of trade for the sector (agriculture supports over 50% of the population but earns 17% of GDP), improve quality of and access to, universal education (technology allows remote teaching) and others.

All these ‘kartavyas’ have also to be fulfilled.

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Comments may be sent to: jmulraj@asiaconverge.com