The great Indian longing for a welfare state

Not many people would be happy to know that almost four in 10 respondents have rated the late Pranab Mukherjee as the best finance minister of a list of four that included P. Chidambaram, late Arun Jaitley and Nirmala Sitharaman. Retrospective taxation and the havoc it created during Mukherjee’s stint as the finance minister seem to have faded with retrospective effect. Chidambaram, who still toils away writing newspaper columns, comes last with approximately 18% ratings.

The good angels (not to be confused with angel investors) at do-good outfits will possibly give up their Quinoa-based diet when they get to know that 68% of the higher income respondents fully support a further tax on the super-rich. Many will be happy to know that 60% of the respondents are convinced Prime Minister Narendra Modi-era budgets have had a very good, or good, impact on the economy. Never mind if they look the other way when informed about the overwhelming 66% of the same respondents complaining that they are finding it extremely difficult to manage household expenses these days.

As finance minister Nirmala Sitharaman gets ready to present the ninth full Budget, the Mint-CVoter survey showcases that most respondents want tax exemptions, concessions related to the new normal of work-from-home, and also exemptions for expenses on covid and post covid treatment among host of other issues regarding their day-to-day life.

Welfare, Welfare, Welfare…

There seems to be a universal desire among an overwhelming majority of Indians to seek an even bigger welfare state.

We asked a simple question: how much is required in terms of monthly income for a family of four to live an “average" quality of life. Close to 77% respondents said a monthly income of up to ₹50,000 per month was required to run a household with four members. Speaking in pure statistical terms, the magic figure is ₹52,073 per month, or ₹6,24,881 per year, when we take a mean of all the open-ended verbatim responses that the interviews gathered. These assessments of average Indians are automatically inflation adjusted when they talk about how difficult it is to manage their lives within their current income spheres.

More than 83% wanted this income to be entirely tax free. In simple terms, Indians wish an income tax free slab of ₹6.25 lakh per annum. That might be expected. But what about this: more than 91% of the respondents want an unemployment dole for those have lost their jobs (more higher income group respondents support this) and an overwhelming majority of respondents want the dole to continue for three months to one year or till covid lasts. More than 76% respondents want a universal basic income for all citizens. Again, the higher income groups outscore the lower income groups in this.

About 78% respondents want a tax on the super-rich, with higher income groups leading the support. Nobody knows where the money for all this will come from. But people want a bigger welfare state. The paradox comes back: can fundamental structural reforms (like farm laws) co-exist in harmony with welfarist populism?

CVoter surveys on farm laws have consistently revealed that the public sentiment is always sympathetic towards the cause of jawan (soldier) and kisan (farmer). Seven years back, almost 70% said that the proposed Land Acquisition Bill was anti-farmer and anti-poor. On the current farm laws, almost 85% said that the government should talk to the farmers and take appropriate sympathetic measures.

Politics is Economics

Congress leader Rahul Gandhi had once famously remarked: “Politics is in your shirts and pants".

While critics laughed at him, he may have been right in his own way. Politics does overshadow economics as well as economic perceptions and decisions. The year 2021, apart from the pandemic and its devastation, was also marked by a high-pitched battle between a section of farmers and the Modi regime. The government was forced to repeal the farm laws it had passed into law. No wonder, 41% of the respondents this year said farmers were neglected in the “past many budgets" followed closely by the unemployed at 39%. The “suit-boot" jibe still haunts the Modi regime, with 46% saying the last many budgets have mostly benefited large industrialists and corporate houses.

In response to another question, almost 82% said the Budget announcements do affect their decision to vote during assembly and parliamentary elections. Besides, 74% of the respondents said that the Modi regime budgets were political or election focused.

Finally, we come to the Pranab Mukherjee paradox. Many at CVoter Foundation think that him becoming the President of India followed by the political bonhomie between Modi and Mukherjee and the Bharat Ratna awarded to him (a Congress leader) made Indians “feel good" about him and forget his real track record as finance minister.

The NDA is the UPA

This might be worse than blasphemy for Modi supporters, but a few results do point in that direction. The first, of course, is Pranab Mukherjee being rated as the best finance minister. The second is the rating of the budgets presented by the NDA (National Democratic Alliance-led by the Bharatiya Janata Party, or BJP) government versus the UPA (United Progressive Alliance) government.

On the face of it, the NDA seems miles ahead with almost 40% saying the NDA presented better budgets while about 31% rate the UPA budgets higher. This gap is purely because of the higher income group where 49% preferred the NDA budgets compared to 26% for UPA. The difference is negligible when it comes to the lower and middle-income groups.

In the 2013 Budget survey, 53% respondents had said inflation was really harming them; the figure for 2022 is 49%. Between 2013 and 2022, there is a remarkable V shaped trend-line, but ironically that doesn’t relate to recovery but rather indicates massive concerns over price rise and inflation.

Back in 2013, the equally important issue among the masses was corruption, which eventually got blamed for the day-to-day suffering of the masses and resulted in the UPA rout of 2014. The only saving grace for the NDA in the public opinion sphere right now is the remarkable trustworthiness of the Prime Minister. While a majority of Indians are concerned about inflation, they also pin their hopes on Narendra Modi—that he will find a solution to their misery.

At times, Economics is Politics

No pundit could predict that in 2004 the seemingly invincible and formidable prime minister Atal Bihari Vajpayee and the BJP would lose the Lok Sabha elections.

Subsequent post mortem indicated that the ‘India Shining’ campaign of the BJP didn’t go down well with a section of the population, particularly when the new economy was still unleashing the side effect of widening the gap between the haves and the have nots.

A few smart minds within the incoming UPA read those distress signs well and followed up with massive social welfare spendings for the bottom of the pyramid which resulted in the upswing of 2009 verdict for the Congress. But the corruption charges and inflation undid them in the 2014 election.

Modi has probably learnt from mistakes of his predecessors, and has only upped the game with one massive social welfare scheme after the other.

If the 2019 verdict had the stamp of solid approval for Ujjwala from female voters, Modi has followed it up with the free dose of ration, cash in the account for farmers, housing, toilets and so on. The prime minister bent over backwards to repeal the farm laws even if that pushed the reforms in the agriculture sector by an unknown timeline, just to placate the protesting farmers. In seven years, this was his second major rollback after the controversial land acquisition bill in the very first year of his government.

Look at the survey responses. As mentioned, 41% and 39% respondents respectively picked the farmers and the unemployed as the most neglected sections. State assembly elections since 2018 show how this has adversely affected the electoral fortunes of the BJP in states.

Modi, however, continues to be the tallest and most popular national leader (the ITG-CVoter MOTN survey in January 2022 showed 63% respondents say his performance is outstanding or good). He is popular. But critics will quickly point out that so was Vajpayee.

The pandemic might have made people insecure and seek more government help via a bigger welfare state. People still rate the NDA budgets favourably; but they are getting impatient and angry with persistent inflation and unemployment. It’s time for Nirmala Sitharaman and Narendra Modi to pick up the cudgels against both these. In any case, in 2024, voters will decide if India is a land of paradoxical parables, fables or Panchatantra tales. Or a concoction.

(Yashwant Deshmukh is founder editor and Sutanu Guru is executive director of CVoter Research Foundation.)