Bid to sugar-coat ‘pro-rich’ budget

Govt takes pains to explain how budget measures will ultimately fructify into gains for middle class

The Sensex has zoomed past the 30K mark, and the corporate sector has been all too happy with Union Finance Minister Arun Jaitley''s budget 2015. Even the pragmatic Reserve Bank of India governor Raghuram Rajan has endorsed this as a roadmap for the future with an interest rate cut. So, all the indicators are pretty healthy.

Yet, the BJP top brass senses a feeling of unease post-budget and it deputed Jaitley's junior Jayant Sinha to party headquarters to brief the media about the aspects that ''they could not have understood,” even as every aspect of the budget had been dissected after its presentation last week. He spent a good amount of time going through a power point presentation, and then fielding questions at length. The idea was to white-wash the pro-rich image of the budget.

“Be patient, the interest rate cut announced by the RBI will have an impact, and your EMIs would come down. You would have more money at your disposal,” he told a questioner who was worried that not all banks would toe the central bank''s line.

Sinha also assured the media that impact of the service tax hike from 12.36 to 14 percent would not be very high. ”We have calculated that it would be just Rs.164 per month on a service-taxable expenditure of Rs.10,000, and as compared to the savings that we have offered on investments and other instruments, this is very small,” he added.

Accepting that there is a big gap between the tax revenue generated and the budgeted income, Sinha said that this shortfall would not be bridged by taxing the middle class alone. ”There would be revenue buoyancy as the economy grows and the tax net would be widened,” he informed.

Stressing the budget had taken care of all sections of the society, Sinha said:” We have presented a very reformist budget, a landmark budget, which has many structural reform measures particularly the Jan Suraksha programme which is the start of a universal social security system. We have done quite a lot for the middle class in terms of infrastructure, jobs and benefits of long-term savings. Most good economists would agree that this is a very good budget. While the previous budgets have had 8 to 10 reforms, this Budget had 20 major reform initiatives."

He added that in so far as the poor are concerned the budget has catered to their basic needs, social security and housing and through development would provide power, food security, MNREGA and medical and education services. Sinha said that the stock market offers the toughest test for a budget as the people invest their money on it. "If it was a bad budget and not a good Budget, people who had high expectations, the stock market would have dropped because people were betting on a very very good Budget. It has gone up and continued to go up," he said.