Prime Minister Narendra Modi on Sunday said that as productivity rises, its gains must be shared fairly between workers, shareholders and owner-managers, adding that sustainable growth requires social legitimacy.
In a written interview to news agency Press Trust of India, Modi said that the next leap to Viksit Bharat will depend on bold investment by the private sector in innovation, long-term capacity and global competitiveness. He said the “next phase of transformation requires a decisive response from the private sector.”
With the government having done much of the heavy lifting through an aggressive capex push in recent years, the PM said it is now time for the private sector to step up, invest boldly and drive the next phase of innovation-led, globally-competitive growth. He said his government has used its years in office to plug the “structural gaps left behind by earlier administrations”, pursue bold reforms and lay the foundations for a developed India.
Asserting that the just-unveiled annual budget marks the “next level” of that journey, he said the FY27 Budget sharply scales up capital expenditure to Rs 12.2 trillion — a fivefold increase compared to 2013 — reinforcing the government’s strategy of prioritising infrastructure creation, logistics expansion and investment in sunrise sectors to drive long-term growth.
It lays emphasis on spending on rail, roads, digital and energy infrastructure, alongside measures to ease compliance and improve the credit flow as the central lever for job creation and economic momentum, the prime minister said.
“However, I want to use this opportunity to make a request to the dynamic private corporate sector. Policy can only create the enabling framework. The next phase of transformation requires a decisive response from the private sector,” he said.
“Indian firms must invest more aggressively in research and development, adopt frontier technologies, deepen supply-chain capabilities and compete on quality and productivity rather than on protected margins,” Modi added.He went on to state that incentives and tariff preferences can catalyse growth, but durable competitiveness must rest on innovation, efficiency and scale.
“Equally, as productivity rises, the gains must be shared fairly between workers, shareholders and owner-managers. Sustainable growth requires social legitimacy. Rising real wages, skill upgrading and stable employment reinforce domestic demand and social cohesion, which, in turn, support long-term investment,” he said. He termed productive spending a hallmark of his government. He said the FY27 Budget deliberately avoided short-term populism and instead channelled record capital outlays into infrastructure to drive jobs and sustainable growth.
Modi said this year’s Budget was not a ‘now or never moment’ born out of compulsion but a ‘we are ready’ moment born out of preparation and inspiration. The PM said that none of his government’s budgets have been made with an attitude of creating run-of-the-mill ‘bahi khata’ documents as “that is not our approach”.
On the recent trade deals, the PM said “these FTAs are tools to ensure that our youth are not just suppliers to the domestic market, but active participants in global trade and growth.” He said India’s deals signed with Australia, New Zealand, the UK, the EU, and the US have opened access for MSMEs, particularly in labour-intensive sectors, to export to these regions with near-zero tariffs or tariffs much lower than those of other exporting countries. He said during the years of the UPA government, they tried to secure some trade deals, and yet the journey was marked by “uncertainty and inconsistency”, Modi said.
He said MSMEs “must move beyond being peripheral suppliers. They must become technologically upgraded, globally integrated and export-oriented enterprises that form the backbone of India’s participation in global value chains.” Modi said India now has FTAs with 38 partner nations, an unprecedented milestone in India’s trade history. A remarkable feature of these trade agreements is that they span continents and include countries of varying economic strength. This gives our manufacturers and producers enough diversity and depth to sell our products across many markets,” he said. These FTAs have opened up the markets of major economies to India’s manufactured products, Modi said and cited the example of the India-UK FTA and the India-EU FTA that will eliminate tariffs on 99 per cent of India’s exports to these countries.
He pointed out that merchandise trade with both Australia and the UAE has doubled since the signing of FTAs with these countries. “Our service sector and its professionals are well known worldwide. They have already made India a hub of global capability centres in different domains. These trade agreements have further boosted their opportunities with greater regulatory certainty, mutually beneficial frameworks and greater mobility across our partner nations,” he said.
The PM said these “FTAs also anchor domestic reform to external commitments. They widen export opportunities, reduce tariff disadvantages relative to competitors, and integrate Indian firms more deeply into global value chains. They reinforce India’s transition toward becoming a more open, confident and globally engaged economy, aligned with the long-term vision of Viksit Bharat by 2047.”
Asked if he was satisfied with the progress made as India’s ‘Reform Express’ continues to gain momentum in many sectors, Modi said: “You’ve asked whether I am satisfied with the progress made in the Reform Express. I must say that by temperament, I am never fully satisfied. I believe public life demands a certain constructive restlessness, a constant urge to do more, to improve faster, to serve better.”
Modi said capital accumulation, labour formalisation, and digital public infrastructure together have elevated India’s potential growth rate to 7 per cent. “Productive spending has been a hallmark of our government. The high capital expenditure reflects our focus on infrastructure and capital investment, which are strong engines for long-term growth,” he said.
The FY27 Budget sharply scales up capital expenditure to Rs 12.2 trillion — a fivefold increase compared to 2013 — as the Modi government reinforces its strategy of prioritising infrastructure creation, logistics expansion and investment in sunrise sectors to drive long-term growth. It lays emphasis on spending on rail, roads, digital and energy infrastructure, alongside measures to ease compliance and improve credit flow as the central lever for job creation and economic momentum.
The Congress criticised the interview as a “scripted exercise”.
