Let’s admit it. Interim Budgets have a bad name and rightly so. It is the budget which has always signified populism and flagrant spending with the Elections in a mind devoid of any rational economic consideration. The Interim Budget of Modi Sarkar has squashed all such prior perception and resisted the populist urge and thrown political opportunism out through the window.
In the run-up to the budget, people had naturally expected big-ticket appeasement of anyone and everyone and was already baying for blood thinking that Modi Sarkar would go the Congress way of doles in an election year. However, what resulted out of interim budget are balanced focused measures which will strengthen the economy even further and put India continuing in the track of development – The perfect foundation for Modi Sarkar 2.
Modi Sarkar since it’s inception has a track record of putting the long term greater good in mind even if it means taking tough decisions. The public understands and will bear with it for the sake of nation has been the underlying assumption which the people have proved right evident from huge election victories for BJP despite some unpopular decisions for the long term prospects of the economy.
Most important good news first, this interim budget seems the final nail in the coffin of Mahagutbandhans no matter which ways you look at it. It is the height of economic management which this BJP Government should be proud of as it signs off its first term with all major big items in the graph well under control whether it be fiscal deficit, inflation or CAD without curtailing anything of substance which will take away from the developmental work. The financial management of Modi Sarkar 1 has been excellent and its set to continue its streak.
India remains the fastest growing major economy in the world with an annual average GDP growth during the last five years higher than the growth achieved by any Government since economic reforms began in 1991. But therein lies our success that despite huge growth, inflation and fiscal prudence is something which we have still managed to hold on to which will make Modi government the most successful government in Indian history.
Inflation in India is known to take down governments and is often accompanied by periods of high growth. The inflation lead by food inflation during the Congress tenure has been their own undoing which contributed massively to their failures apart from their big-ticket scams. The BJP government has firmly kept a tight leash over inflation while also providing the cleanest government which India has seen for the last decade or so. The average inflation of 4.6% during BJP tenure is the lowest during the tenure of any government. If we had not controlled inflation, our families would have been spending around 35-40% more today on basic necessities.
The other elephant in the room which is looked upon every budget the fiscal discipline is also the area where Modi Sarkar does well on all counts. It is no secret that nature has not been supportive of farmers with the rural economy in many parts of India including Maharashtra affected by severe drought. The resulting loss of income will add to the farmer distress which paved way for the farm relief package which will go to the tune of Rs.75000 crores. While financial institutions including the banking sector may baulk at the minor straying away from the fiscal consolidation path, it was necessary for Modi Sarkar to tread a fine line between giving away freebies and supporting our farmers. The Government did an excellent task at maintaining that balance even it meant going ahead with a minor aberration which we can always rectify in our second term.
To be sure, markets had factored in a much bigger figure expecting Modi to go the Congress way which we at all costs avoided. As far as the banking sector is concerned, the commitment of the Finance Minister to increase allocation for recapitalization beyond Rs.2.60 trillion will come as music to their ears. The disinvestment target, as well as expected GST collections in the upcoming months, will be keenly watched for further comfort. Modi Sarkar-1 ends with a fiscal deficit of 3.4% which is only slightly upward revision while inflation is well under control notwithstanding what the RBI may choose to do with rates in the upcoming months. We contained the fiscal deficit notwithstanding the Finance Commission’s recommendations increasing the share of the States from 32% to 42% in central taxes while Current Account deficit which was about 5.6% six years ago is hovering around 2.5% now.
The poor have the first right on the resources of the nation and this budget has kept on to the focused manner in which it addresses the issues of the poor and the marginalised. The “Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)” is one of the most historic announcements ever made which will result in direct benefits to the marginal landholding farmers. A mind-boggling 12 crore farmers are expected to benefit from this. If that was a game changer, Modi government did not stop at that and will cover about 42 crore workers in the unorganized sector by launching “Pradhan Mantri Shram Yogi Maandhan” which will ensure a dignified life after retirement for those poor toiling day in and day out for the nation. Together these schemes cover a majority of the poorest sections of the society which qualifies to call this budget a pro-poor budget by all counts.
The other most important segment which accounts for about half of the country’s population can’t be left behind for they are the women whose potential in nations growth is immense. It was inevitable that a huge 6 crore women will benefit by Ujjwala Yojana of providing LPG connections. What is remarkable is the pace at which we reached out to these woman at such a speed so that they can take advantage of it. Woman largely are still housewives in rural areas who haven’t joined the workforce but still managed to be beneficiaries of Ujjwala Yojana. Things, however, are changing obviously from the fact that a whopping 70% of all beneficiaries of Pradhan Mantri Mudra Yojana are women.
That makes it about 9 crore woman out of 15.56 crore beneficiaries of Mudra Yojana which shows how comprehensively Modi Government has managed to reach every segment, every nook and corner of the Indian society in the last 5 years of his government. That also in a way signals the fate of the Mahagutlessbandhan which has nothing to show in terms of work but a desperate attempt at stitching up alliance based on caste, community and religious lines. Maybe its time BJP should use the punch line of SP against the SP-BSP duo that “Kaam Bolta hai” and Uttar Pradesh like rest of India will likely say “Phir Ek Baar Modi Sarkar”
Being a middle class Indian often feels like a thankless segment to be in although they are actually better off than most sections of the society. All credits to the Finance Minister in recognizing this and thanking the middle class for their tax contributions which keep this country running. The BJP government under Modi dedicates the Part B: of the Union Budget to the middle class for they have a lion’s share in bringing this part of the budget into existence. This budget will that be forever embedded in the psyche of the middle class for such a gesture as Modi Sarkar 1 signs off and is looking forward to continuing its good work in Modi Sarkar 2.
Speaking of tangibles, the middle class have to shoulder in lesser responsibilities now that India is slowly prospering, increasing its tax base and adding more people into the middle class and alleviating poverty at breakneck speed. The middle class won’t have to pay any tax on income up to 5 lakhs is what stands out for them while the fact is that effective Chapter VI deductions combined with other tax breaks on investments ensure that middle-class salaried citizens need not pay tax even if earning much more than that provided they plan their taxes well. This is as much a budget for the middle class as for the poor as Rs.22000 crore is the amount pegged to be in the hands of middle class for consumption which will no doubt boost the economy as Modi Sarkar 2 takes over.
A farmer friendly, a pro-poor budget without burdening middle class nor falling prey to populist measures on election eve while still maintaining inflation low, growth high and fiscal prudence intact is the story with which Modi Sarkar 1 is signing off with. BJP is all set to pass on the baton to Modi Sarkar 2 which will build on this solid foundation which Modi Sarkar 1 has laid. Seems like the stuff of legend this government had managed to achieve which goes on to prove that transparency and right intent is what matters the most and election results follow.
As Piyush Goyal summed it up in the end, it is not a mere interim budget but a medium of country’s development journey. The country surely wants to continue this journey and will look forward to Modi Sarkar-2 to take India to its destination in a rightful place among the global pecking order. The interim budget has built the foundation for things to come.
(Shweta Shalini is BJP Spokesperson, Advisor to Chief Minister of Maharashtra and Executive Director of Maharashtra Village Social Transformation Foundation (MVSTF)