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Last Updated : Feb 02, 2017 11:05 AM IST | Source: Moneycontrol.com

Budget 2017: A midpoint Budget that's a report card, roadmap & rejig(Comment)

Arun Jaitley‘s Budget on Wednesday was all of those things, coming as it did 31 months into the NDA‘s term (it‘s a different matter that a second stint is very much on the table if PM Narendra Modi‘s personal ratings are the determinant).


Sitaraman Shankar
Moneycontrol

A Budget presented at the precise point in a government’s term where the beginning and end are equally in sight is bound to be a report card, a roadmap and a rejigging of priorities as per political demands.

Arun Jaitley’s Budget on Wednesday was all of those things, coming as it did 31 months into the NDA’s term (it’s a different matter that a second stint is very much on the table if PM Narendra Modi’s personal ratings are the determinant).

The government has fashioned itself in the image of its leader, Modi, the quintessential strong man politician that’s in vogue in geographies from the United States to Russia (with a few strong women thrown in).

Therefore the report card in Jaitley’s Budget saw fit to make muscular comparisons: 133 km of road added per day in 2016-17 versus a measly 73 km in the period 2011-14 when the other lot were in power; a record budget for NREGA, a scheme that was once the pet project of the ousted UPA under Sonia Gandhi but now wholeheartedly and laudably appropriated; a 42 percent increase in sanitation cover over late 2014.

It’s telling that the FM chose to make these comparisons so far into the NDA’s term, underlining that the Bharatiya Janata Party is always combative and in election mode.

Ergo, with elections in five states including politically crucial Uttar Pradesh and prestigious and highly visible Punjab beckoning, populism was bound to be a part of this Budget. Witness the big increase in spending on Scheduled Castes, who account for over 20 percent of the population in UP and a third in Punjab. And the sops for farmers – agricultural credit and a widening of crop insurance, among other measures -- who form the bedrock of voters in Punjab.

But the most interesting shift is in the votebank that the BJP is seeking to cultivate. The demonetisation sprung on the country so dramatically by Modi in November last defined his government as a backer of the poor and an enemy of the corrupt rich. The poor are a durable and resilient target group to cultivate. So the BJP came to power as a party of banias and Brahmins and business, with a dose of anti-minorityism thrown in and now it seeks to be a party of the poor, the schedule castes and the farmers.

The first two and a half years have brought forward some themes that have been built on relentlessly: making business easier, building infrastructure, banking the unbanked, mending the banks, and going after tax dodgers.  

The first three Budgets were incremental, and so was this one, but perhaps that is the way it should be. The biggest reform this government is pursuing is outside the Budget – the Goods and Services Tax.

As for the roadmap, a large part seems to be defined by demonetisation, which in turn was driven by the need to crack down on ‘black’ money and corruption. Therefore, a focus on the digital economy, on rewarding the poor for their forebearance, and on tightening the screws on tax evasion.

Jaitley may not have delivered a Big Bang, but the continuity in his Budgets is perhaps designed to soothe nerves frayed by the bold, take-no-prisoners approach of his boss.

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First Published on Feb 1, 2017 05:17 pm
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