Modi Govt Sticks to ‘Egalitarian Welfarism’ With Budget 2019

Modi is not steering away from this economic path, although there may be a quibble or two over reduced allocation.

Finance Minister Nirmala Sitharaman presented the budget on 5 July

(Photo: The Quint)

One has to grant the Narendra Modi regime one thing, it is consistent, whichever be the avatar you wish to assess – Modi 1.0, Modi 2.0, or the relentless election machinery that it is.

Economic promises, policies and programmes are essentially devices for any political party to secure political endorsement, but more so the BJP, for reasons not tough to comprehend.

After all, its primary motivation is ideological, not reducing disparity in society.

True, when Prime Minister Modi assumed office, he did not turn out to be the market reformer that the Indian economic right-wingers expected him to be. Instead, he rattled off his fondness for the idea of antyodaya, which the BJP contentiously credits Deendayal Upadhayaya for, although the coinage was originally Mahatma Gandhi's and later Vinoba Bhave's.

Egalitarian welfarism has thus been the path Modi has pursued – paradoxical for a premier who in 2015 made fun of the UPA flagship, MGNREGA, by saying that the scheme was all about digging holes in the ground.

The BJP secured its second mandate purely on the strength of a non-economic political narrative backed by reasonably efficient deliveries of micro-economic programmes, in turn backed by the argument that Modi 1.0 was a work in progress and required another tenure to fulfil.

He is not steering away from this economic path, although there may be a quibble or two over reduced or at par allocation.

One has to credit Modi for his success in being able to set goals beyond the tenure he has been voted. For instance, shortly after election in 2014, he began talking about targets that would be met in 2022, 2024 and as in this year’s interim budget, even 2030.

This conveys the impression that the BJP is the only party with a long-term vision for the nation. It helps that Modi's rise has coincided with the decimation of the opposition which began in the last election and shows no signs of reversing.

Assisted by the BJP Manifesto

Niramala Sitharaman – although not the first woman finance minister to present the annual budget as incessantly publicised (Indira Gandhi was her own FM in 1970 after Morarji Desai's departure from the Congress) – did a good job in making a credible speech with an energy certainly in contrast to Arun Jaitley’s dourness.

It is a different matter that she was assisted in the discharge of the task at short notice by the BJP’s election manifesto.

Just as President Ramnath Kovind’s address to the joint sitting of the two Houses of Parliament at the commencement of the 17th Lok Sabha was a reiteration of the party manifesto, one could almost anticipate on several occasions the next paragraph or declaration that Sitharaman would make in the course of her maiden Budget speech.

The promises thus come back:

- Emphasis on making India a 5 trillion economy – although this is now assured "in the next few years" as against the specific date of 2025 in the manifesto.

- Likewise, the key phrase used over the past few years, improving 'ease of living' and ensuring further rise of India in the 'ease of doing business' index – the addition this time is that Sitharam argued that "both should apply to farmers too".

But how can this be provided to the stressed agriculturalists?

- Well, by going "back to basics on one count: Zero Budget Farming. We need to replicate this innovative model through which in a few States farmers are already being trained in this practice. Steps such as this can help in doubling our farmers’ income in time for our 75th year of Independence."

But then, how is this new catchphrase different from the existing "Paramparagat Krishi Vikas Yojna,” a sub-component of Soil Health Management scheme under National Mission of Sustainable Agriculture?

The fine print in budgets has always been extremely important, but more so now.

PM-KISAN Scheme: Spreading It Thin

To be fair to Sitharaman, she did not have choices.

The path that the regime has been pursuing since 2014 was set by the prime minister and the then-finance minister when she was just a junior minister in a different ministry.

Moreover, the immediate objectives or promises have already been listed out in the course of the energetic campaign.

If her elbowroom had to be restricted any further, the government in its first cabinet meeting decided to universally extend to all landowners the PM-KISAN scheme, launched just before the elections, under which Rs 6,000 was allocated for small and marginal farmers as income support.

This is also the sector where the gap between promise and delivery is most evident.

In its manifesto, the BJP "committed to making an investment of Rs 25 lakh crore to improve the productivity of the farm sector” – it would not be wrong to argue that if the government was earnest about meeting this pledge, it would perhaps allocate Rs 5 lakh cr every year beginning this fiscal.

But alas, the question which most economists ask after a budget, was already posed when the promise was made in the manifesto: 'where is the money?'.

In its defence, the government may say that if not the entire amount, at least the finance minister has enhanced the total allocation of the Ministry of Agriculture and Farmers’ Welfare to a historic high – Rs 1,30,485 crore.

But this is mainly to meet the additional money required to hand out the dole that is paraded as Samman in the PM-KISAN programme.

Even the non-economists among readers are competent to judge if an annual handout would be adequate to double farm income within the next 3 years.

The tone of what was to come in the Union Budget perhaps was evident on 4 July when the Chief Economic Advisor, K Subramanian, presented the Economic Survey. As a document, it was tabled in the shadow of the government's own figures being questioned by the former CEA, Arvind Subramanian.

Yet, the paper didn’t just fail in presenting the correct picture, it also ended up being a document that was clueless about the challenge of revising a stagnating economy.

Banking on a ‘Honeymoon Period’

Newly elected governments have a 'honeymoon period' when they can be expected to be bold and ward off criticism for any 'brave' decisions. Re-elected regimes have greater moral authority to get out of the 'safe zone'.

Sitharaman is certainly hamstrung by the conclusion of the regime’s leadership that the economic issues – which got relegated to the background by Pulwama-Balakot and triggered populist nationalism – will be contained and not make a hasty comeback into public discourse.

Consequently, several significant promises – Rs 20,000 cr for seed start up funds, for instance – are missing in the Budget.

Besides the taxation proposals in Part B of the Budget speech, politically, the issue to watch is the palpable failure to show how the government intends to put earnings in the hands of the people.

Keep watch also on when the absence of jobs and stagnant wages for those at the bottom of the job pyramid become a matter of public concern and become visible as discontent.

If the government succeeds in managing this vital aspect of public behaviour, a new framework of political analysis may be required, for it would truly herald the ushering in of a New India.

(The writer is an author and journalist based in Delhi. His most recent book is ‘The RSS: Icons of the Indian Right’. He can be reached at @NilanjanUdwin. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)