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

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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.

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