How a Libertarian Budget Would Look Compared to the 2025 Union Budget

The 2025 Union Budget has made headlines for its ambitious plans to revamp India’s economy. From subsidies to a focus on green energy, the government has laid out its vision to drive growth. But, how would a Libertarian budget differ in terms of approach, figures, and policy? Let's break it down and compare the two.

Taxation: Simplifying and Lowering

2025 Budget: The government’s tax proposals aim at higher taxes for the wealthy, with a focus on corporate income tax and capital gains tax. There’s also a hike in excise duties on certain goods. The intention is to create a progressive taxation system where the wealthier pay more, and subsidies help those at the bottom.

Libertarian Budget: A Libertarian approach would fundamentally reject the idea of progressive taxation. Instead, we'd look at a flat tax system—say, a 15% flat income tax rate across the board. Corporate tax rates would be slashed to 15-20%, far lower than the current rates, encouraging foreign investment and fostering entrepreneurship. Wealth is not something the government should be redistributing, but something that can be better managed by individuals and businesses.

Government Spending: Cutting the Fat

2025 Budget: A massive chunk of the ₹6.7 lakh crore is directed towards subsidies and welfare schemes like food security, MNREGA, and other support mechanisms. The goal is to ensure that those on the margins are provided for, even if it comes at a cost to taxpayers.

Libertarian Budget: In contrast, a Libertarian budget would slash subsidies and welfare schemes. The idea is simple: subsidies distort the market and create dependency on the state. The ₹6.7 lakh crore could be used more efficiently by cutting government waste, slashing the size of the bureaucracy, and privatizing public sector undertakings (PSUs). Direct cash transfers would be an alternative, giving individuals more control over their resources, and fostering self-reliance.

Privatization: Letting the Market Work

2025 Budget: The government continues to emphasize the role of state-owned enterprises in sectors like energy, telecom, and even defense. Plans for PSU disinvestment are in place, but it’s still a slow process.

Libertarian Budget: A Libertarian budget would speed up privatization. Why should the government be in charge of running airlines, railways, or telecom services? The private sector has proven to be more efficient at delivering goods and services to the masses. A Libertarian government would seek to sell off PSUs and shift these funds towards infrastructure development and education, ensuring that the private market takes over these sectors.

Green Energy: Market-Driven Solutions

2025 Budget: One of the highlights of this budget is the focus on green energy. The government is looking to allocate significant funds to solar, wind, and alternative energy sources in an attempt to meet global climate commitments.

Libertarian Budget: While a Libertarian budget would also support green energy initiatives, it would rely on the market rather than the government to drive these changes. We’d allow businesses and entrepreneurs to develop the next generation of sustainable technologies with minimal regulation. The government’s role here would simply be to eliminate barriers to entry and provide incentives like tax cuts for green startups, instead of directly funding projects.

Defense: Smart Spending

2025 Budget: The defense allocation has seen an increase, with ₹7.5 lakh crore dedicated to national security, defense infrastructure, and modernization. The government seems committed to strengthening India’s position globally.

Libertarian Budget: A Libertarian approach would prioritize smart defense spending. We would maintain a strong military but eliminate wasteful defense contracts. The focus would be on technology-driven defense and alliance-building rather than bloated expenditures on inefficient contracts and weapon systems that may not be necessary. This could free up funds that could be invested in public infrastructure or used to lower taxes.

Infrastructure: Reducing Bureaucracy, Increasing Efficiency

2025 Budget: There’s a notable ₹10 lakh crore set aside for infrastructure development, including roads, ports, railways, and smart cities. Much of this involves government-led initiatives.

Libertarian Budget: A Libertarian government would privatize infrastructure to ensure efficiency and timeliness. Instead of relying on government projects, the market would be empowered to take over tasks like road-building, power generation, and even urban planning. With fewer regulations, private companies could take on the task of developing cities and infrastructure, driving competition and leading to better quality services for consumers.

Welfare: Empowering Individuals

2025 Budget: The government continues its emphasis on welfare schemes, direct benefits, and subsidies aimed at improving the living standards of low-income groups.

Libertarian Budget: Instead of relying on the government to redistribute wealth through welfare schemes, a Libertarian approach would empower people by cutting taxes and allowing them to choose how they want to spend their money. Direct cash transfers would replace most subsidies, giving individuals the autonomy to decide how they spend on healthcare, education, or housing.

The Bottom Line: A Leaner, Market-Driven Approach

The 2025 Union Budget focuses on expanding government programs and trying to safeguard vulnerable populations through subsidies and welfare schemes. While these are well-intentioned, a Libertarian budget would aim for a more efficient and self-sustaining economy.

By cutting taxes, privatizing industries, reducing subsidies, and shifting the focus towards individual empowerment, a Libertarian approach would result in a simpler, leaner, and market-driven economy. With less government interference and more room for entrepreneurs to thrive, the Libertarian budget seeks to create an environment where businesses can flourish, people can prosper, and the government’s role is limited to maintaining law and order.

In the end, it’s all about letting individuals take control of their own lives and resources, rather than relying on a bloated bureaucracy. The question is: which approach do you think would create a more prosperous, dynamic, and free India?