Appeasement is a dirty word, especially in the context of Indian politics. It becomes dirtier when it is applied to the country’s economic management. There is no other way to term the first Budget of the NDA government placed by Finance Minister Nirmala Sitharaman who for the first 25 minutes spoke only about Andhra Pradesh and Bihar. This Budget has been used to unabashedly placate the two allies of the NDA – Telugu Desam Party (TDP) ruling Andhra Pradesh and Janta Dal United (JD-U) running the Bihar government. N Chandrababu Naidu and Nitish Kumar had lobbied and clamoured for greater budgetary allocations for the development of their respective states. The FM ended up providing large chunks of funds for the two states unable as she was to concede their bigger demands for special category status. This could be seen as done under political compulsion as the government’s survival depends of the support of these two allies. After a decade, this could be seen as BJP’s first coalition Budget.
The Union Budget has been used as an instrument to placate the two primary allies of the NDA instead of drawing up an economic blueprint for the development of the entire country. One cannot blame Opposition politicians such as Shiv Sena (UBT) leader Aaditya Thackeray, Karnataka Deputy CM DK Shivakumar and West Bengal CM Mamata Banerjee for slamming the Budget for letting their respective states down. The complaint becomes justified when the Centre uses its Budget to pick and choose individual states for giving its largesse.
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In the process, the budgetary exercise has been exposed as deprived of decisive policy action to tackle price hike, disinvestment, agriculture & infrastructure development and job creation. In this Budget, the government has promised to provide skill training and employment to millions of unemployed youth in partnership with the private sector. Vast number of under-skilled youth is supposedly to be employed or protected by the Top 500 companies of the country. It is unclear how these private enterprises will handle these trainees on their work floors and who will train them. Most genuine working factories will not have the space or manpower to handle such trainees. Also, the Finance Minister has claimed that the government will incentivize 3 million youth entering the job market by providing one month’s Provident Fund (PF) contribution.
However, in many companies in India, PF does not kick in from Day One. It is unclear how this would incentivize employment. On the other hand, Orissa has not figured in the Budget priority and has very little to show in terms of budgetary allocations while being a major support pillar of this third term of Prime Minister Modi. Apart from a lollipop promised on the tourism sector, no new infrastructure, irrigation or special projects have been announced for the state.
Many other important things are missing in this Budget. The FM seems to have conveniently forgotten MNREGA which does not find mention in her Budget. There were complaints in the past about the government reducing MNREGA funds. The Budget makes no serious effort to improve the income of the bottom 40 per cent of the population whose income has gone down during the past decade of the BJP rule.
A few sops here and there such as a modicum of relief in the new tax regime, a reduction in the import duty on gold and silver which immediately led to a crash in their prices, and making mobile phones a little cheaper by way of less taxation are but just cosmetic. High-sounding self-congratulatory rhetoric for the Budget by top ministers of the ruling alliance would do little to take the country forward. Political messaging seems to have taken over economic goals for the country in the present Budget.
