Rather than announce one-off loan waivers or Minimum Support Price based on discretion and political expediency, the Modi government has opted to tackle the larger issue of agricultural subsidy within a non-discretionary institutional framework.
When it comes to political audacity and the sheer grandeur of vision, Prime Minister Narendra Modi has few equals, at least in Indian politics. The Budget of 2018 won’t be remembered because the fiscal deficit target suffered a minor slippage, that the contrived expectation of massive tax cuts for the salaried middle classes didn’t materialise and that imported Audi cars will now cost more, thanks to an enhanced import duty. These are run-of-the-mill announcements that excite the TV studios from noon till the end of an exhaustive day of discussions at 11pm on Budget Day. They are digested, internalised and commercially adjusted before the financial year is triggered on April 1.
Unless marked by horrible miscalculations and punitive burdens on communities, the tweaking of revenue targets by finance ministers rarely, if ever, have a direct bearing on the political fortunes of governments. What matters is the totality of impressions, the individual experience of daily existence, the sense of well-being, group solidarity and some other intangible inputs. The 2018 Budget has the potential of being different for two reasons.
First, in terms of sheer magnitude, the Ayushman Bharat Yojana beats all welfare schemes that have been unveiled in the past, perhaps since Independence. Its range extends to approximately 50 crore Indians and covers the cost of an individual’s healthcare up to a maximum of Rs five lakhs. It is a cashless insurance scheme where the premium will be borne by the government — perhaps shared unequally by the Centre and the States — and will be financed by a combination of a direct allotment to the Health Budget and the dedicated accruals from a one per cent cess on income tax.
What the Modi government has, in effect, unveiled is a free healthcare scheme for nearly half the population with a promise of making it a universal scheme in due course. Already billed as Modicare, the ABY promises to be the largest healthcare system in the world. More important, it constitutes the first pillar of a welfare system that India has so far lacked. The relief from anxiety that the ABY can potentially provide to a vast swathe of economically disadvantaged Indians — and, contrary to a self-serving myth, not merely members of a single ‘majority’ community — is immeasurable. Free from the anxiety of what will happen in the event of a serious illness, it will empower India. Without saying so explicitly, Modi has transformed decent healthcare into a citizen’s right. No wonder BJP President Amit Shah suggested that the scheme has given the poor of India wings to fly.
Of course, the short-term progress of ABY will depend on its design, financing structure and implementation. To my mind, the proposal to have the Centre and states share the premium 60:40 while equitable and fair (health is a state subject) is also unrealisable. Rather than risk interminable wrangling, it would make much greater sense if the Centre assumed the full burden of the premium — at least in the initial years — and the necessary upgradation of government hospitals in district and subdivisional terms. Moreover, the scheme necessitates the active involvement of the private sector and rigorous systems to prevent over-charging and other possible malpractices. Most states, apart from a few, lack the necessary administrative wherewithal to monitor a healthcare project of such a magnitude.
What is imperative is to create a system that involves active citizen participation and political ownership. The ABY must ensure that there is constant pressure from below to see that the promised healthcare is run honestly, efficiently and without unnecessary bureaucratic rigmarole. ABY must ensure that healthcare becomes an important political concern at the grassroots.
Secondly, the Budget announcement to implement the recommendations of the M S Swaminathan Committee Report on agricultural prices constitutes a huge leap of faith in the Indian farmer. Rather than announce one-off loan waivers or Minimum Support Price based on discretion and political expediency, the Modi government has opted to tackle the larger issue of agricultural subsidy within a non-discretionary institutional framework. It is for the Niti Ayog, the Centre and the states to meet together and decide on the costs of production and 1.5 times premium that would be attached. There may be some initial hiccups over competitive assessments, but the net effect will see farmer incomes rise exponentially.
In effect, this announcement is almost akin to a Pay Commission award for farmers. Apart from satisfying political compulsions — inevitable in a democracy — the decision is bound to increase liquidity in rural India and even fuel inflation. However, this is a problem that has to be borne by the system. The past few years have seen simmering rural disconnect over unremunerative agriculture. Apart from destabilising the polity and triggering agitations from rural communities for reservations, it has exposed Indian politics to short term and purposeless populism. What the Modi government has proposed may cause short-term fiscal convulsions, but in terms of the larger well being of rural India, this is akin to a permanent solution.
It is always difficult to anticipate how government announcements affect the course of politics, particularly elections. To me, however, the cynicism that greeted Finance Minister Arun Jaitley’s Budget speech was unwarranted. I think that after the 2018 Budget, the Modi government stands tall in the imagination of India’s voters.
The author is a senior journalist and Member of Parliament, being a Presidential Nominee to the Rajya Sabha.
