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Business News/ Budget 2019 / News/  Budget 2019: Big in sentiment, short in substance

Budget 2019: Big in sentiment, short in substance

Over 12 crore farmers, over 3 crore salaried professionals and their families will gain
  • This budget has, for now, shifted the focus away from the BJP-led NDA’s acts of omission and commission
  •  (Illustrations: Jayachandran/Mint)Premium
    (Illustrations: Jayachandran/Mint)

    NEW DELHI : In the end, it was not a vote on account, not even an interim budget. Instead, it was a full-fledged budget from a regime in the final months of its tenure. Undoubtedly, it was an election budget seeking to address the various pain points facing key electoral constituents of the Bharatiya Janata Party (BJP)—the neo-middle class, farmers and youth, especially those entering the workforce or the ones transitioning from the informal to the formal economy—through a combination of carefully earmarked big spending and direct tax giveaways. Essentially, finance minister Piyush Goyal’s maiden budget bets big on sentiment.

    And the potential electoral success of this messaging was captured by former prime minister Manmohan Singh. “It’s an election budget," Singh told NDTV, before adding candidly, “In these circumstances, the concessions to farmers and the middle class will obviously have implications on (the upcoming general) elections."

    Singh is right. This budget has, for now, shifted the focus away from the BJP-led National Democratic Alliance’s acts of omission and commission. The body language of the MPs in the Lok Sabha suggested as much—if the jubilant treasury benches were thumping their desks chanting “Modi, Modi", the opposition looked despondent as Goyal moved from one sop to another in his nearly two-hour-long speech. This shift in sentiment is key to rallying the cadres and scripting a winning electoral strategy. Especially if we keep in mind that almost all the electoral defeats Narendra Modi has suffered, especially in Bihar and Delhi, in the last four years occurred when he failed to set the dominant narrative.

    Not surprisingly, within hours of the presentation of the Union budget, the most forwarded message in WhatsApp groups was a checklist of the tax giveaways; an excited middle class, which moulds public opinion, was chattering about what it believed to be good tidings served up by the incumbent. In fact, the political controversy that erupted after the leak of the official report detailing the dismal growth in jobs seems to, for now, have been overshadowed by the budget pronouncements.

    Yet, some may point out that the NDA might have left it too late in its tenure, having misread the extent of the farm crisis building from 2015, and ignored the growing disenchantment of the middle class. All the more so since Goyal’s giveaways are short on substance. But then, there is the counterargument that such giveaways should always be held to the end, because public memory is short. In any case, politics is always about what you are seen to be doing rather than what you actually do.

    Take the package for the farm sector. There have been enough hints to suggest that an announcement of a giveaway was inevitable. The near defeat in the Gujarat assembly poll was a wake-up call; the three defeats to the Congress in Madhya Pradesh, Chhattisgarh and Rajasthan were a rude reminder that large segments of the farming class were disenchanted with the BJP. Ignoring the idea of a loan waiver—which the Congress has adopted as its electoral calling card and already promised to implement if elected to power—the NDA opted for a lesser version of the Rythu Bandhu income support scheme launched by the Telangana government targeting 120 million small and marginal farmers. Never mind the fact that it is far less than what is being offered by Telangana, Odisha or Jharkhand, or the fact that it does not extend to tenant farmers. What farmers will recall is the allocation of a staggering 75,000 crore and the instalments, no matter how small, that will accrue directly to their bank accounts with retrospective impact. The fact that the structural fault lines have not been addressed will be conveniently overlooked.

    However, sentiment is a necessary but not a sufficient condition to win an election. Eventually other factors such as candidate selection, opposition unity and, of course, the Modi factor would influence the final outcome. It is still early days and it will be some time before the national mood firms up. Regardless, one thing is for sure, Goyal’s debut effort is a re-election budget.

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    Updated: 04 Feb 2019, 02:21 PM IST
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