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Monday, February 5, 2018

Budget 2018: Make no mistake. Jaitley’s budget is the mother of all election manifestos

When the BJP went into the first phase of the Gujarat polls in December without an election manifesto, Congress President Rahul Gandhi had tweeted about how the ruling party had “no vision and no ideas presented for Gujarat’s future”. Well, on Thursday, finance minister Arun Jaitley presented the Budget 2018, mother of all election manifestos.

The lessons of the 2017 Gujarat election — especially the verdict in farmer-distressed Saurashtra and the rural hinterland going against the BJP — have been learnt well. The much-expected antidote for nationwide agrarian distress, of hiking the MSP of crops, indicates the Modi government’s strongest push yet for New Majoritarianism politics: the New Majority being rural India, where despite growing urbanisation, 68.84% of Indians (read: voters) live. This is ‘Make in Bharat’.
If ‘ease of living’ is ‘Garibi Hatao’ and ‘Jai Kisan’ rebooted, Budget 2018 also continues the narrative that PM Narendra Modi had started from 2014: pushing for an out-and-out pro-poor agenda, while silently pulling down fat cats, most visible in the politics – rather than the economics – of demonetisation. Now, the FM has put the money where the vote is. And without the middle-class and the markets really reeling with shock.
With the kind of capital that the Modi government had, going into Budget 2018,Election mode, it had the political luxury of opening up its purse strings to offer a free lunch to farmers and the rural poor. It has. It hopes that this electorate remembers in 2019 that there’s nothing called a free lunch.
Successful welfare politics, well-established in states like Tamil Nadu, has now been seriously scaled up nationally. Not only does this politically extinguish – at least for the time being — jibes about a “suit-booted” government, but it also brings (back?) to the table Big Government. Politically, the BJP seeks to reach out to a wider electorate, and this Budget provides it with Big Bait. The allocation of Rs 95,754 cr to Scheduled Castes/Scheduled Tribes schemes – a 12% hike from last year – maybe fiscal jugglery, with ministry allocations now pooled under one Central umbrella. But it’s nifty politics.
At a time when the BJP is desperately seeking SC/ST votes, even as fringe ‘Hindu’ groups have irked the party and government(s) by targeting these communities, the packaging of allocating SC/ST funds is a billboard for Lok Sabha elections.
Also smartpolitik is the big ticket reach-out to rural-farming India with the MSP hike. Even as it comes with the rider of the Commissioner for Agricultural Costs and Price (CACP) ultimately deciding the MSP of different crops according to input costs in different states. And the risk of fueling food inflation. But all that is economics.
What Jaitley announced as the “world’s largest healthcare programme”, the National Health Protection Scheme covering 10 crore poor families, was taken out of the microwave from his 2016 Budget – as well as Modi’s August 15 speech the same year. Timing, as this government well knows, is critical in politics. Thus, the renewed promise of “slowly progressing towards universal health coverage” suddenly becomes politically surcharged. The speed of implementing the scheme, however, is crucial.
With Budget 2018 a vote-on-account one, and a projected fiscal deficit of 3.3% of the GDP for the next fiscal, the finance minister has more elbow room this year than traditional economics would care for. So enough of trickle-down economics. On Thursday, we heard the great gush of polls.

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