The Train Has Come Late

In their compulsion to shower poll sops, to the disenchanted voters, primarily to combat the competitive populism spree of Rahul Gandhi, the interim budget presented by Piyush Goyal was loaded with goodies, primarily for three segments of society, which have been particularly unhappy with the NDA rule i.e the middle class, due to the lack of jobs and receding incomes, the rural folks because of agrarian distress caused by rising farm input costs and falling incomes and the unorganised sector labour, due to difficulties in livelihood, all accentuated due to the twin measures of GST and demonetisation. Even though, very large in number, these segments of society have little influence and no voice, and the only way they make themselves heard is through the ballot box every five years. A swing in their large voter base, has the potential to throw out the ruling government, as we recently saw in the case of Rajasthan, MP and Chhatisgarh, which is what the BJP now fears in the general election round the corner.

The BJP has thus joined the race for competitive populism. But being the party in power, it cannot lose its credibility and show its desperation by announcing reliefs and poll sops recklessly, as Rahul Gandhi has been doing, whose very party does not know, as to where will the money come from, to fund his promise of all India farm loan waiver across the board and a minimum income guarantee program, should his party be voted to power, both of which together would need massive funds, upwards of Rs. 10 lakh crores, which are just not there.

The interim Finance Minister, thus brought a train load of goodies, in the interim budget, for the three most politically important and sensitive segments, with a large voter base i.e. the farmers, the middle class and the unorganised labour. For the farmer he announced the annual grant of Rs. 6000 per farmer, by way of direct money transfer to the farmer’s bank account, entailing an annual outlay of Rs. 75,000 crores to the government, for the middle class he announced a bouquet of tax benefits and for the unorganised labour, he announced an attractive pension scheme, which together with the Ayushman Bharat health welfare scheme, provides a social security net to them. These measures are attractive and have the potential to sway the voter to the BJP’s side.

But this train of goodies that the government wishes to give has come too late and is laced with uncertainty and confusion. The tax benefits to the middle class will be effective wef 01.04.2020 only, which period is long enough to not give an immediate feeling of feel good factor and succour to the middle class. In the case of the farmers, even though the interim budget provides that the scheme is effective from 01.12.18, and that by March 2019, the government would have paid a sum of Rs. 20000 crores to the farmers, it is widely believed that it would be too little to effect a vote swing and as far as the pension scheme for the unorganised workers is concerned, though impressive and attractive, it is clothed in uncertainty. Not much consultation seems to have gone in its making and few workers will be able to realise/understand its potential benefits before the election, such as to give political dividends to the BJP. If these measures had been announced in last year’s budget, it would have perhaps been a political winner, because by now, all these three segments viz. the farmer, the middle class and the unorganised labour, would have already benefitted from the sops and reliefs showered on them, only now.