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 shows how confident Narendra Modi is about his return after the polls. It 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 Rs 6,000 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 Kishan 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. Self-employment has been given a big boost. India is the second largest start-up hub.
The biggest measure is the effective tax-free limit of Rs 6.5 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.
Narendra Modi's budget for 2019-20 is more an expression of his confidence of getting a renewed mandate from the 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 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 demonetization has been overcome.
The biggest achievement of the Modi government is that after a disastrous five years of Dr 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 demonetization, 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 2019 polls, 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 emphasized 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. India today is a hot destination for foreign direct investment. In ease of doing business, India moved from 152 to 78.
Inflation is at a record low of 6.5 per cent compared to 10.5 percent under the UPA government. Lending rates have almost halved in the last five years. Fiscal prudence and keeping deficit at 3.6 percent have been the hallmark of the Modi governance model. India has taken a quantum leap in mobile, smart phone and internet connectivity and digitalization.
If in 2014, 11 km of road was built a day, now the average is 28 km, 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 are down to half, making it possible for common people to travel more by air and do business faster. The tourism sector has seen the largest number of foreign visitors coming to India in the recent years. The country has been terror strike-free in the past five years, which helped business and tourism grow in a big way.
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. The budget tells the story of how free cooking gas connections for the poor, rural roads and electrification, a house and toilets for all are potential game changers. The budget is proving to be Modi's manifesto for the 2019 poll.
(Dr R. Balashankar is Member, BJP Central Committee on Training, and Committee on Publications and former Convener BJP National Intellectual Cell and former Editor Organiser.)
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