Finance Minister Nirmala Sitharaman’s Budget speech on Thursday followed the norm of not announcing any new tax proposals as the country gets ready for the Lok Sabha election in a couple of months, but her political messaging was very clear — she asserted that the Modi government would return in July to present a full Budget, on the strength of its record, and that it did not need announcements of last minute sops to go into the polls. “Confidence over continuity,” as Prime Minister Narendra Modi put it in his post-Budget remarks.
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“In the full Budget in July, Mr. Speaker, our government will present a detailed roadmap for the pursuit of ‘Vikasit Bharat’,” she said to table thumping by her parliamentary colleagues. Later Union Minister Bhupendra Yadav tweeted this portion of Ms. Sitharaman’s speech with the caption “In July 2024....” to reiterate the point. Almost two thirds of Ms. Sitharaman’s speech was based on achievements of the government in its 10-year tenure.
One of the most politically interesting announcements was on the programme to provide rooftop solar power generation to one crore households, as part of the Pradhan Mantri Suryodaya Yojana. It has come as a response to multiple guarantees of free power by different political parties in different States, including in Delhi and Punjab by the Aam Aadmi Party and the Congress in others.
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Mr. Modi has spoken out against the “rewri” or freebie culture and therefore, this announcement, of making provisions for free power, not by declaring it as free, but under a subsidy model for the initial installation of solar panels etc, and some outlay by the beneficiary themselves is a political-economy response to what is now a political and fiscal challenge in many States in India. “Imagine you have given free power without driving the State exchequer and power distribution companies bankrupt,” said a source in the government.
There was also an acknowledgement that subsidised housing under Pradhan Mantri Awaas Yojana had continuing demand as more and more families have come under its ambit, and therefore an announcement that two crore more houses will be made was done.
An interesting announcement with political ramifications was of setting up a committee to look at the whole issue of population and changes in demography. “Since it was announced by the Finance Minister, you can be sure that this committee will be looking at the question of population not just as a demographic issue but also economic, which will inform policies after that. Till now, the question of growing population or certain population trends was only a demographic question,” said a source in the government.
The Budget also saw the announcement that a White Paper to look at where the economy was in 2014, and where we it is now. “It is now appropriate to look at where we were then till 2014 and where we are now, only for the purpose of drawing lessons from the mismanagement of those years. The government will lay a White Paper on table of the House, Ms. Sitharaman said.
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“The White Paper is basically going to look at the change in the way the economy was handled under Prime Minister Modi, of growth generated by expenditure,” said a source.
As India prepares to go into the Lok Sabha polls, the BJP, if we go by Ms. Sitharaman’s speech is depending on its record for a third successive win.
