Goyal budgets for political arithmetic ARCHIS MOHAN
SIGNALS FOR THE HUSTINGS Departs from convention by presenting, in effect, a full Budget
With the Lok Sabha polls less than 70 days away, the challenge for the Narendra Modi government was to neutralise the Opposition’s criticism of it having been a ‘ suit boot ki sarkar’ that failed to prevent farm distress and caused immense job losses with its demonetisation and “hurried implementation” of the goods and services tax (GST).
The Modi government departed from parliamentary conventions by presenting, in effect, a full Budget in an election year. The interim Budget announced an income support scheme for farmers with retrospective effect. Finance Minister Piyush Goyal said the Centre would give ~6,000 per annum in three instalments to an estimated 120 million farmers.
Goyal promised a tax rebate for a section of the middle class, which could help his party retain the support it received from them in 2014. He also announced a contributory pension scheme for 100 million unorganised workers that promises a pension of ~3,000 per month, if they pay ~100 per month with a matching contribution from the government on their attaining the age of 60 years. There were also announcements to spur revival of the real estate sector, and sops for the MSME sector, which had borne the brunt of demonetisation and the advanced GST roll-out.
If the objective was to generate euphoria over the interim Budget announcements, and galvanise party workers ahead of a tough election campaign, Goyal might believe he has succeeded. The government hopes to deposit the first instalment of ~2,000 in bank accounts by the time farmers queue up at polling booths. Clearly, the Modi government betrayed that losses in three Hindi heartland states in the December Assembly polls haunted it.
The Opposition, after initially forced on the back foot, started making sense of the interim Budget, and it looked as if the FM might rue his decision not to present a vote-on-account. Several political leaders, including Congress’ P Chidambaram, Swaraj Abhiyan’s Yogendra Yadav, and others, pointed out that the income support scheme did not cover sharecroppers, there was little for landless farm labourers or urban poor. They also said it was nothing but the BJP’s “cash for farmers’ votes”. “Dear NoMo, five years of your incompetence and arrogance has destroyed the lives of our farmers. Giving them ~17 a day is an insult to everything they stand and work for,” Congress President Rahul Gandhi tweeted. Congress leaders said their party’s proposed minimum income guarantee for all poor was a more comprehensive scheme.
Another criticism was that Goyal’s interim Budget ignored the Modi government’s poor record on creating jobs. The minister suggested better growth delivered by the government and investments in infrastructure “obviously” led to more jobs, but did not identify the number of jobs generated. The interim Budget announced a ~750 crore increase for the Rashtriya Gokul Mission and setting up of Rashtriya Kamdhenu Aayog to enhance production and productivity of cows. The move would probably prove too late to assuage farmers facing stray cow and bull menace across northern Indian states.
The interim Budget has attempted to tick all the boxes that could help the Modi government return to power. It is now up to the larger Sangh Parivar to deliver on its threat to start building a temple around the Ram Janmabhoomi disputed site in Ayodhya in the forthcoming weeks.