Acche Din: Are they here?

People are disappointed and feel the youth have nothing to cheer about. Yet there isn’t enough pent up anger for the Opposition to exploit, write Rama Bijapurkar & Rajesh Shukla

People are disappointed and feel the youth have nothing to cheer about. Yet there isn't enough pent up anger for the Opposition to exploit, write RAMA BIJAPURKAR & RAJESH SHUKLA

Prime Minister Modi came to power on a powerful promise of “acche din aayenge”, which created a wave of hope and won him and his party a handsome mandate. At the end of his five years we thought that instead of asking the policy and media pundits about the extent to which he has fulfilled the promise and the mood among people of India, we would ask the people themselves. People Research on India’s Consumer Economy did a survey in December 2018-January 2019 among about 17,000 people aged 18 to 70 years old, spanning all income groups and living in metros, Tier I and Tier II towns in urban India, and asked them the extent to which they agreed that “acche din” had come in their personal and family contexts, in the country’s context and for the youth of the country, in the past five years. They were also asked what had happened to the financial situation of their family in these last five years. (see: How the survey was conducted) for survey methodology, sample design and to know more on People Research on India’s Consumer Economy, P.R.ICE)

The survey revealed a very disappointed Urban India, which agreed, by a strong majority, that acche din had not come in their personal context, “for me and my family”. This was even as they agreed, across the board, with a reasonable majority that their incomes had improved. The biggest most universal disappointment was that acche din had not come for the youth of the country.

So, are the NDA government’s most recent “populist” “vote catching” Budget proposals likely to change this perception and cause a large positive swing?

To start with, there was nothing specifically youth focused about it, so there isn’t much to change the majority negative perception that “acche din for youth” have not come.

Looking at the tax benefit offered and putting it against what our data shows as the income- demographic structure of urban India, the impact seems to be mixed. Income tax exemption limits being raised gives relief to 30 million people, according to the government. Our data shows that 95 per cent of them are in urban areas (because of agricultural income being exempt from income tax and the very low levels of income of non-land owning rural India with the exception of a small salaried class and the exemption on agricultural income). This accounts for about a maximum of 33 per cent of urban households assuming one tax payer per family. The remaining twothirds of urban India are not affected by this proposal.

The beneficiaries of this proposal are people who represent what we call “middle India”, with their household income being somewhere between the 20th and 60th percentile of household per capita income of urban India. At this level of income, about two-thirds are small businesses and self-employed people who usually have a lower tax rate (high expenses that they can get offset; personal income and business income are the same) than salaried employees so the savings are less, and they are the ones most affected by GST, and who get the lowest financial benefit from it. So, whether they are singing all the way to the bank or not needs to be examined. Salaried employees have it good. Assuming for the purposes of calculation an annual income of ~3 lakh on which the present tax rate is, say 20 per cent, the increase is definitely significant. However, even urban India is not the land of the salaried. Relief on taxes and other incentives for second homes will benefit a small proportion of urban rich and, while good for the real estate suppliers, do not affect the majority of consumers.

Our “acche din” survey shows that the concept of acche din seems to mean more to people than increases in income. The proportion of these households that said that their financial situation in these past five years had increased a lot or a little is a lot more than the proportion who feel that acche din have come for themselves and their family. Looking at the pattern of responses, we are increasingly getting the feeling that acche din means far more to people than just income increases.

Casual labour comprise about a quarter of those earning in urban India, and of all the occupation segments, they have the most negative sentiment on all counts. The long-term pension scheme proposed in the Budget is a great idea and a good move because most Indians recognise the vulnerability of old age and unhelpful adult children — however given how young the country is, the promise of a good distant future with a difficult present is hard for them to appreciate. Perhaps a minimum wage and a day off in the week paid, would have earned far more voter gratitude.

Is there symbolic value to be exploited from “no need to pay income tax, keep it all for our family, save etc?” Yes, definitely so, in a society that hates to pay its taxes. And there is no doubt that this election will be about symbols far more than about substance.

Here are the highlights of our survey:

Salaried employees have it good. Assuming for the purposes of calculation an annual income of ~3 lakh on which the present tax rate is, say 20 per cent, the increase is definitely significant

This survey is representative of large town India

We had done an all-India survey in 2014, when the new government took charge, where we had asked people the extent to which they believed that “acche din aayenge”; comparing the ‘then’ and ‘now’ results, we are able to see how delighted or disappointed urban India is.

In sum, the story that emerges is that the field is still open for surprises in either direction. There are more positive than negative responses that family financial situations have improved these past five years (even among those with income levels that would put them in the poorest 20 per cent of urban households, about half report that incomes have improved). Yet there is a huge disappointment that acche din have not happened for them and their family, starker if you compare it with the strong belief five years ago that acche din would indeed happen. This level of disappointment however is not there relating to the country, though the verdict is hung on this count.

So, is there a whole lot of readymade anger for the opposition to exploit? Not really. But is there room to stoke the disappointment and create an atmosphere that can blunt the dazzle of future election promises? Yes, most certainly.

Should the BJP desist for another “India shining” type campaign? Most certainly it should. Should it play up its work as work in progress and honestly explain its slower-than- expected progress? Yes, certainly.

But everyone needs to come up with a youth-focused campaign. Is there room to exploit the government’s neglect of our young people and play on the negative perception that acche din has absolutely not happened for young people? Yes, there certainly is. That’s one thing everyone seems to agree on. Casual labour is also the most negative in its sentiment — and it is a large chunk of people. Perhaps a minimum wage promise would work better than a handout?

And perhaps universal basic income is not as much the silver bullet as universal access to opportunity.