No doubt Prime Minister Narendra Modi is a ‘different’ prime minister and he has manifested his ‘different’ qualities more than once. From his spontaneous speeches on Indian and foreign soils to his path-breaking decision to demonetise currency notes overnight, Modi has shown to the world that his thinking capacity and actions are different from run-of-the mill style adapted by his predecessors.
He has, now, developed a habit and his own style to keep people guessing and giving them rude shocks. That is palpable in his every action. For example, no other prime minister has ever tried to make a vote-on-account or interim budget his manifesto for the election he is going to face. The assurance, wide sweep and gravitas in the budget that the government has presented to show how confident Modi is about his return after the polls. Surely, Modi has taken a distinct lead in round one of the tournament.
The latest budget that went before the Parliament last week has many novel aspects to it. First of all, it is a vision document. The budget presented by Finance Minister Piyush Goyal is a rain of goodies for all sections of people. From the Rs6,000-a-year dole for 12 crore farmers whose land holding is up to two hectares, doubling the cover under the Employee’s
State Insurance scheme, increasing wages for labourers, to favourable Kisan Credit Card terms for farmers, cattle-breeders and fishermen, Modi has tried to touch every section. Health care is to help 50 crore people and it has already benefited ten lakh families. The Ujjwala scheme for cooking gas connections, which has already reached 6 crore families, is now being extended to 8 crore families. Special care has been taken to propitiate the women and youth through a number of schemes.
Boost for self-employment
The budget has given self-employment a big boost. India is the second largest start-up hub. The biggest measure is the effective tax-free limit of Rs 5 lakh, which will cover up to 3 crore tax payers. Add to this, the exemption on interest gains from fixed deposits, capital gains and doubling of rental income tax limit and encouraging the urban middle class to buy a second house. The booster shot for the middle class is bound to create feel good vibes across the spectrum.
One can easily term Modi’s budget for 2019-20 as more an expression of his confidence of getting a renewed mandate from people of India than a vote-on-account for the remaining four months, after which the new government is to present a full budget. This has many new features. But essentially, it is a reiteration of the economic growth model Modi followed since 2014. The budget has given a huge relief to farmers and middle income groups; over 300 million small and medium self-employed people will enjoy the benefit of the Mudra scheme. If the budget is an indicator, the GST impact is, now, streamlined and the deceleration due to demonetisation has been overcome.
One of the biggest achievements of the Modi government is after a disastrous five years of the then prime minister Manmohan Singh between 2009 and 2014, the confidence in the Indian economy has been restored; we are the fastest growing economy in the world at 7.2 per cent annual growth. This has shattered the claims of Modi baiters, including Dr Singh, who, after demonetisation, predicted that the economy would crash to abysmal levels. What the budget loudly proclaims is that Modi has been able to achieve most of his goals to take India on a fast track to recovery.
While Opposition leaders like Rahul Gandhi are still rehashing the unfulfilled 1972 promise of Garibi Hatao to offer doles to the poor after the forthecoming general election, Modi has projected the vision of a country devoid of poverty, open defecation and homelessness, and one with drinking water and sanitation for all. The budget has emphasised the gains of the past five years.
A comparison between what Modi inherited in 2014 and what he has achieved is quite instructive. India has improved its anti-corruption image and, on the corruption index, is behind most others like US and even China, which is not a democracy. Today, India is a hot destination for foreign direct investment. In ease of doing business, India moved from 152 to 78 rank. Inflation is at a record low of 6.5 per cent compared to 10.5 per cent under the UPA II unseated in 2014. Lending rates have almost halved in the last five years.
Fiscal prudence and keeping deficit at 3.6 per cent have been the hallmark of the Modi governance model. India has taken a quantum leap in mobile, smart phone and internet connectivity and digitalisation. If in 2014, 11 kms of road was built in a day, the average is 28 kms now, which is the highest in the world. Rural road-building and infrastructure development have trebled.
Ports, waterways, rail and air connectivity all have seen tremendous progress. Airfares have been halved, making it possible for the common people to travel more by air and prosper. The tourism sector has seen the largest number of foreign visitors coming to India in recent years. The country has seen fewer terror strikes in the past five years, which helped business and tourism grow in a big way.
Freebies and populism
Modi’s earlier budgets have been free of freebies and populism. For the first time now, he has taken to extensively woo the middle class and the farmers. The tax concessions will put more money in the pockets of the common man. This will trigger a spending spree, helping the economy grow faster. Of late, the consumer durable sector and the manufacturing sector have seen buoyancy. The boom is bound to accelerate. Modi is clearly looking at good economics as good politics.
It is certain that he is planning to face the electorate on the development plank. There is a huge element of populism in the new budget. For instance, the health sector reform is going to benefit almost half the population in a big way. There is, of course, no doubt Modi and his cabinet colleague have worked overtime to ensure that the budget exercise would actually turn into the election manifesto for the Lok Sabha election. Thus, it would be interesting to see how the Congress president, Rahul Gandhi, his men and other Opposition party leaders face the challenges thrown by the BJP.
Bharatkumar Raut is a political analyst and former Member of Parliament
