Prof Raj Kumar Singh, Delhi Technological University Delhi.
India is a land blessed with every ingredient needed for national prosperity: a young and vibrant population, fertile agricultural land, and abundant natural resources. And yet, we continue to fall short of achieving fundamental goals—like universal healthcare, full employment, and an innovation-driven economy that creates secure and meaningful jobs.
Now, imagine an India where every citizen can retire with dignity, where food, shelter, and healthcare are not privileges but guaranteed rights. Picture a society that celebrates and invests in public research, where groundbreaking ideas aimed at collective welfare are not only encouraged but well-funded.
In a resource-rich nation like ours, there is no justifiable reason we cannot build a system that guarantees modern education, job training, robust infrastructure, affordable housing, and high-quality healthcare for all. Envision cities that are not just habitable but beautiful, clean, and community-oriented. Imagine an economic model where public and private sectors work together to ensure full employment and living wages—where human well-being, not just GDP, becomes the true measure of progress.
This vision is not a utopian dream; it is within reach. But to get there, we must challenge long-held assumptions—especially about how government finance works.
We’ve been conditioned to believe that taxpayers are the main source of government revenue, as if the state operates like a household with limited means. This outdated framework suggests that every rupee spent must be first collected from us. However, Modern Monetary Theory (MMT) offers a transformative lens: it argues that a sovereign government that issues its own currency, like India’s central government, is not financially constrained in the way households or local bodies are.
According to MMT, taxes serve essential roles—regulating inflation, discouraging harmful behavior, and reinforcing currency demand—but they do not “fund” federal spending. Once we internalize this, the fiscal space for ambitious public investments becomes much larger than we’ve imagined.
If policymakers remain trapped in the myth of fiscal scarcity, we risk continuing down a path of inadequate investment—leaving problems like unemployment, poverty, and ecological degradation unresolved. But if we shift our mindset, and begin to view economic policy as a tool to unlock human potential rather than balance a ledger, then a just, innovative, and prosperous India is truly possible.
The good news is that our understanding of nation-building, governance, and money has evolved. By recognizing that the central government is constrained by resources, not finances, we open new possibilities. This understanding allows the government to mobilize idle resources for national development, leading to a society where public welfare, employment, prosperity and sustainability coexist harmoniously.
By shifting our focus away from budget deficits and embracing a new perspective on public finance, we create an economy that benefits everyone. Restrictive fiscal policies rooted in unfounded concerns about government accounting have slowed our growth, fragmented society, diminished living standards, and eroded our environment. The lack of public investment reflects a failure of imagination—a reluctance to envision a future with full employment, improved living conditions, investment in future generations, and effective inflation control. This lack of vision has also contributed to poverty, ecological harm, delaying an economy that enhances life and protects the planet.
Understanding money and governance provides powerful tools for any nation to redefine its priorities: caring for people, honouring cultural identities, restoring ecosystems, supporting sustainable agriculture, boosting production, and encouraging innovation.
Modern Monetary Theory (MMT), with its focus on real resources and correct understanding of modern fiscal policies, offers alternative approaches to achieving tangible improvements.
This understanding allows us to craft fiscal policies that empower local communities and strengthen the domestic economy through full employment. No community—be it a rural village or an urban neighbourhood—should be left behind. Equipped with clarity about what we can afford, we hold the power to create an inclusive economy. Let us envision, and then collectively build, a better future for our nation.
Traditional Government Finance vs. New Perspective
| Aspect Sovereign Nation’s Fiscal policy | Traditional Thinking | New Perspective |
| Source of Money | Govt. Relies on taxes and borrowing. | Govt. issues currency & borrows to manage interest rates. |
| Role of Taxes | Funds government spending. | Removes currency to stabilize economy and society. |
| Economic Impact | Budget deficits limit investment; causes underuse of resources. Limited growth, unemployment. | Spending boosts jobs, growth, full employment, public welfare. |
A sovereign nation like India can leverage strategic fiscal policies to mobilize all underutilized resources—including its unemployed workforce—for nation-building. By harnessing a deep understanding of fiscal mechanisms, currency flow, and economic planning, India has the potential to become the first major economy to achieve zero unemployment, eradicate poverty entirely, and ensure a higher quality of life for all its citizens.