Take a pause from Budget politics and rethink governance: Nobel Laureate Abhijit Banerjee

Nobel Laureate and economist Abhijit Banerjee calls for pause in relentless cycle of Budget-to-Budget governance, stating that this may be the right time to rethink how the government itself is organised.

With the Union Budget approaching, Nobel Laureate and economist Abhijit Banerjee has called for a pause in what he described as the relentless cycle of Budget-to-Budget governance, arguing that this may be the right time to rethink how the government itself is organised.

Speaking to The Hindu at the Hyderabad Literary Festival 2026, Mr. Banerjee said the country needs to take a pause and not think of the Budget but how to organise the government to be more effective. He observed that public discourse and policymaking are constantly driven by the next Budget or the next election. He suggested that instead of focusing solely on annual allocations, the government could use a year to attempt innovative changes, such as placing greater emphasis on urban decentralisation.

“We are always on this time schedule from one Budget to the other and then there is one election to the other,” he said, adding that the period between the previous and next general elections provides an opportunity to step back and consider structural reforms.

On the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB-G RAM G Act, 2025, he cautioned against drawing conclusions too early. “A key concern is that reducing the federal share of spending in certain programmes could mean inequality across States. Poorer States may end up with less money and consequently, spend less,” he warned.

He pointed out that even some State governments led by the ruling party have pushed back against the proposed changes. He maintained that it would be premature to treat the proposal as final. There remains space for negotiation as the political process unfolds, he asserted.

Speaking about his book ‘Chhaunk: On Food, Economics and Society’, Mr. Banerjee highlighted India’s continuing struggle with malnutrition. He noted that India remains home to one of the world’s largest malnourished and stunted populations. “The underlying issue is protein deficiency in diets,” he said, pointing to political debates over providing eggs in school meals as an example. Eggs, he said, are a cheap and effective source of protein, yet their inclusion in school nutrition programmes often becomes contentious.