Budget message: The BJP has its eye on the real target — 2024
When finance minister (FM) Nirmala Sitharaman presented the Union Budget on Tuesday, she would have been aware that this was her last opportunity to present an economic blueprint relatively free of immediate electoral considerations. To be sure, there are a bunch of state elections coming up — including in the critical battleground state of Uttar Pradesh (UP). And it would have been tempting to come up with measures which the party machine could have used as a talking point vis-a-vis the electorate.
But she did not do so. In fact, the most revealing Twitter timeline of the day is not of the FM but UP chief minister (CM) Yogi Adityanath — who had a set of four tweets welcoming the Budget, for its commitment to a self-reliant India, to women, to taking steps that may provide employment to six million young Indians (among whom, those in UP, too, would benefit), and to some infrastructure-related and fiscal announcements. All of it was in line with what the party would expect from an important leader. But if the UP CM thought that the Budget would be a gift to him and energise his campaign, that was not to be.
This does not, of course, mean that the Bharatiya Janata Party (BJP) does not want to win UP. It does, very keenly, but it hopes to do so on the back of its organisational might, social coalition, the perception of improved law and under the government, and religious identity — just as it wants to win Gujarat later this year, on the basis of the Prime Minister’s association with the state, the party’s organisation and social alliance, the fusion of culture and nationalism, and the disarray in the Opposition. In its winning recipe for these states, the party did not view the Union Budget as an additional ingredient.
This decision, to present a Budget that was not driven by the immediate electoral calculus, which would have required taking into account the acute distress due to the uneven nature of the recovery, could only have been taken at the highest levels of the party. And, while it is hard to understand the political motivations of a rather secretive leadership, here is an explanation.
In 2023, the government will have to begin focusing on its political vulnerabilities and seek to address it in the Union Budget. The interim budget of February 2024 will be geared towards the general elections later that summer — just like the February 2019 budget saw the unveiling of the PM-KISAN scheme, a major step in neutralising farmer discontent in the run-up to the elections. It is easy to forget now how, after the political defeat in Rajasthan, Chhattisgarh and Madhya Pradesh at the end of 2018, there was a genuine sense that anger among farmers may hurt the BJP back then. Income transfer to farmers played a big role in offsetting this mood.
And, that is why the government appears to have chosen this particular moment to stick to its broad economic philosophy. Pump in public money for infrastructure — this should help with some employment creation in the immediate context. Create an enabling environment for domestic manufacturing through both incentives and restrictive duties, which make domestic industry less susceptible to competition from outside — this may, if the bet pays off, create a more vibrant employment ecosystem in the medium- to long-term.
Continue with public provision of private goods to improve ease of living and showcase State efficiency — after houses and toilets in 2019, it is the provision of drinking water that is the big political bet for 2024. Refrain from using the available fiscal room to immediately alleviate distress, spur private incomes and boost demand through income transfers, for ideological reasons (the PM is uncomfortable with what he sees as sops and only allows it when politically essential), and to avoid inflationary pressures (a genuine concern at a time when inflation is rising globally).
Many have praised the government for not being hostage to the electoral calendar. But this also means it has not felt the democratic imperatives and political pressure to respond to the distress at this juncture. The political message is clear. While other polls are important, the BJP’s leadership, like Arjun in Mahabharata, has its eye on the real target — 2024.