Jaitley’s Budget does little to reduce pain of demonetisation – but brings relief to Opposition

Opposition had feared the BJP would announce populist measures that could sway voters in the five states going to the polls this month.

Budget 2017

When the Modi government decided to advance the presentation of the Union Budget to February 1, there were serious apprehensions in the Opposition camp which felt that the Bharatiya Janata Party would use this platform to make populist announcements to woo the voters before the coming assembly elections in five states.

It was widely expected that finance minister would announce specific sops for the rural poor, farmers, scheduled castes and the middle classes to offset the adverse impact of demonetisation. There was talk of a loan waiver for farmers, the transfer of payments to Jan Dhan accounts and the possible introduction of Universal Basic Income under which people below the poverty line would receive a sum of money to boost their incomes.

Fearing that this would place them at a disadvantage, Opposition parties, including the Congress, Samajwadi Party and the Left parties, asked the Election Commission to direct the government to defer the presentation of the Budget till after the elections to ensure a level playing field for all stakeholders. Their plea was rejected by the Election Commission, though it did ask the government to refrain from announcing any specific schemes for the poll-bound states. In fact, Congress vice-president Rahul Gandhi pre-empted the announcement of any sops for the poor when he presented Prime Minister Narendra Modi with a charter of demands in December asking the government to deposit Rs 25,000 in the account of one woman in each family that is below the poverty line.

As it turns out, the Opposition’s fears were unfounded. There was palpable relief in the Opposition camp after Jaitley finished his Budget speech because it had no big bang announcements. Although Prime Minister Narendra Modi was quick to describe the budget as an “uttam budget” aimed at improving the lives of the poor, Dalits and farmers, the Opposition felt these that these announcements would have little impact in the coming elections as the Budget had nothing specific to offer for the vulnerable sections that have been hit by demonetisation.

BJP leaders worried

While the Opposition was predictably comforted by Jaitley’s Budget, there was despair in the BJP, which had hoped that he would announce special financial packages for the rural poor and the farm sector to boost the party’s prospects in the upcoming assembly polls. BJP ministers may be gushing over the Budget but party leaders privately admit that it had failed to generate the necessary excitement for their voters.
Undoubtedly, the government made a valiant attempt to shed the tag of a “suit boot ki sarkar” with Jaitley underlining that while preparing the Budget, he had focused on spending more on rural areas, infrastructure and poverty alleviation. The finance minister announced that the total allocation for rural, agriculture and allied sectors had been raised by 24% over last year’s outlays. In addition, the Budget provided for a Rs 5,000 crore micro-irrigation fund and higher targets for farm credit and crop insurance. Jaitley also sought to pacify the unhappy middle classes by halving the tax liability for those having an annual income between Rs.2.5 lakh-Rs 5 lakh from 10% to 5%.

But the Opposition was not too concerned with these announcements. “ We have no reasons to worry,” remarked a senior Congress leader. “People had such high expectations from the Budget that these announcements will not cut much ice with them.”

Opposition leaders maintained that they would have been worried if the finance minister had announced immediate bailout packages for the underprivileged. The provisions contained in this Budget are too general and will have a long-term impact and that too, if these are implemented efficiently. “Raising farm credit is fine but only the farmer knows the problems he encounters in accessing that cash,” remarked a Samajwadi Party leader.

Missed opportunity

Describing the Budget as a missed opportunity, former Maharashtra chief minister Prithviraj Chavan maintained that the finance minister was constrained from going too far on populist schemes because he had to keep an eye on the fiscal deficit. “If the government wanted to go down that road, it would either have to tax more or borrow more….it is not in a position to do either,” Chavan said. “I doubt if it will impact the assembly elections in any major way.”

With the finance minister making none of the expected announcements, the reactions of opposition leaders to the budget were on predictable lines. Rahul Gandhi said the Budget had promised fireworks but it had turned out to be a damp squib. “The Budget had nothing to offer to the farmers or the youth..it also failed to keep its promise on job creation,” he said. West Bengal chief minister Mamata Banerjee described the budget as “misleading and baseless.”

While Opposition leaders were undoubtedly reassured by the 2017 budget, they also admit that their relief may prove to be short-lived. The Modi government, they believe, can be expected to come up with special schemes like the Universal Basic Income or a farm loan waiver in next year’s Budget with an eye on the 2019 Lok Sabha polls. “The next budget has to be a populist one,” remarked a senior Congress office bearer. “It will be this government’s last budget before the general election.”

Courtesy: Scroll.in




Related Articles