By Prashant Jha
New Delhi: The political test of the final full budget of the Bharatiya Janata Party (BJP)-led government before the 2024 elections was based on a simple metric — would it be enough to sustain the party’s multi-class alliance or would budget measures fracture that wide alliance?
On this yardstick, union finance minister Nirmala Sitharaman has passed the political test.
And she has done it while broadly focusing on macroeconomic stability and fiscal discipline, preparing the country for a green transition, offering direct tax cuts, investing in the technologies of the future, continuing on the path of public investment-driven infrastructure, incentivising local manufacturing, prodding states and the private sector to step up, and retaining a welfare cushion given the acute levels of distress that the combination of the pandemic, inflationary pressures and continued unemployment have left behind.’
This makes Budget 2023-2024 that ‘rare exercise’ where good politics and reasonably competent economics have fused, even if this coexistence remains somewhat fragile. It is not that this budget did not think of the 2024 elections as some seem to suggest — there is no way that a party as politically attuned as the BJP will ignore the electoral calculus — but the sophistication of the budget lies in its ability to be political without being explicitly so.
What Sitharaman’s budget has done is give enough, either in terms of symbolism or substance, to enough of these constituencies to not rock the boat.
When she highlighted the welfare achievements — free ration for 28 months to 800 million people during the pandemic; the construction of 120 million toilets; the distribution of gas cylinders to 96 million homes; cash transfer of Rs 2.2 lakh crore to 114 million farmers; increase in the PM’s rural house construction scheme by 66% to Rs 79,000 crore — it was a reminder to the subaltern that this is a government that has made their life easier.
When she spoke of ramping up investments in handicrafts for artisans, mentioning how it would benefit OBCs, Dalits, tribals and women, it was a signal that the government hadn’t forgotten their livelihood issues.
When she spoke of the aspirational districts programme or the aspirational block programme, it was a message to neglected geographies that they don’t remain neglected anymore. When she allocated Rs 15,000 crore for the Prime Minister’s Particularly Vulnerable Tribal Groups Development Mission or announced that over 38,00 teachers and staff will be hired for 748 tribal schools, the political subtext was hard to miss.
After all, a majority of the states, both in Northeast and central India, going to polls this year have a substantial tribal population. When she spoke of investments in mechanical desludging, it was a signal to Dalits that the government was finally committed to ending the inhuman practice of manual scavenging.
When she spoke of an agriculture accelerator fund or increased the agricultural credit target or highlighted the focus on decentralised storage facilities or announced the expansion of digital public infrastructure in the agri domain or took pride in millets, there was a signal to farmers of different classes that the sector mattered.
When she expanded the credit guarantee to MSMEs or returning 95% of the forfeited amount to these enterprises related to bid or performance security keeping the pandemic in mind, it probably wasn’t enough — but there was a sign to the sector that the government was willing to listen to their financial concerns. When she lowered the tax rates for new cooperatives or provided relief to sugar cooperatives to the tune of Rs 10,000 crore, there was a powerful signal to these bodies, with vast memberships, that they exercised political influence.
For the rich, she brought down tax rates from 42 per cent to 39 per cent — the numbers of those who benefit will be small but they exercise disproportionate influence over the narrative.
(The article appeared in The Hindustan Times)
NRIs, corporates in UAE welcome India’s Budget
Dubai: Non-Resident Indians (NRIs) as well as the business and corporate community in UAE have welcomed India’s Union Budget 2023-24.
Kamal Vachani, Regional Director, Electronics and Computer Software Export Promotion Council said that it is a “people-friendly” budget as the income tax exemption has been increased to Rs 7 lakh. “This is a major step taken by the Finance Minister, which will benefit middle-income taxpayers in a big way as this will bring in higher spending by the households, leading to a boost in aggregate demand.”
“Reduction of custom duty on parts of open cell (TV), mobile phones, camera lens, etc. would go a long way in enhancing India’s export. The proposal to extend the same to other electronics goods like TVs is a welcome step, which will boost exports further,” he added.
Businessman and Chairman of Lulu Group, Yusuffali M.A. said, “I would term it as an ‘inclusive’ budget that has tried to take into consideration all segments of society as well as different priority sectors. For me, the key takeaways are the major initiatives announced for strengthening connectivity, food security and skill development sectors.”
Similarly, Azad Moopen, Founder Chairman & Managing Director, Aster DM Healthcare said that the budget has “excellent focus” on skill development and it addresses one of the core challenges that healthcare industry is facing today – shortage of nursing staff, through the announcement to start 157 nursing colleges alongside existing medical colleges”.
Gopinath Sabnivise, Group Director, Bridge Medical GPO said that “We are pleased to see the future-ready approach the Indian government has taken for the healthcare industry in India with the 2023 annual budget. It is a massively positive move to place a greater focus on pharmaceutical research, as well as research on the implementation of modern healthcare practices in India…”