Best of BS Opinion: Fiscal pressures and strategic bets in a changing India

Here are the best of Business Standard's opinion pieces for today

The RBI’s latest state finances report signals that the phase of steady fiscal consolidation at the state level has ended, at least for now. While spending quality has improved, states remain heavily dependent on central transfers and borrowing, with narrow own-tax bases and added uncertainty from recent GST rate cuts. As our first editorial notes, several states are already past their working-age peak, with pension costs now absorbing close to a third of social sector spending in some cases, squeezing room for health, education and investment just as healthcare needs rise. 

Meanwhile, a different set of strategic calculations is shaping India’s external economic choices. As our second editorial highlights, the US has signalled that India will be invited to join Pax Silica, a new bloc aimed at securing supply chains for semiconductors, AI infrastructure and critical minerals. For India the attraction lies in reducing vulnerabilities exposed during the pandemic and by China’s export restrictions. Yet the opportunity comes with execution risks. Capital intensity, infrastructure gaps and regulatory complexity remain formidable, and membership alone will not deliver results without domestic reforms and faster implementation. 

Writing on the upcoming Union Budget, Nitin Desai argues that attention should shift from programme announcements to hard macroeconomic choices. Public debt remains close to 80 per cent of GDP, and annual deficits continue to matter because they absorb a large share of household financial savings, crowding out private investment. Manufacturing, already struggling to attract capital, has been particularly affected. Desai is sceptical of further tax rate cuts and instead calls for rationalising cesses, surcharges and tariffs, especially in a weak global environment with pressing job needs. 

Rama Bijapurkar, meanwhile, focuses on the resilience of households. She points to the rise of a large group above the poorest quintile, neither poor nor secure, that has driven growth through savings, consumption and self-employment. This “Middle India”, she argues, does not need prescriptive schemes so much as financial tools, credit access and infrastructure to support upward mobility. 

Finally, Neha Bhatt reviews Abantika Ghosh’s Games Hospitals Play, a book that dissects how private hospitals operate in a system marked by low public health spending and weak regulation, revealing billing practices and incentives that often push patients into financial distress. Detailed and unsettling, the book challenges the idea that healthcare can be left to the logic of markets alone. 

Stay tuned!