The Modi government performed a magic of sorts by announcing massive schemes for welfare of the poor, the farmers and the middle class. They together form the bulk of the population which is crucial in electoral terms. But the problem is that the budget lacked conviction. This government has a life of no more than four months, before the next Lok Sabha polls are held and a new government takes charge. It could be Modi again, or someone else.
The introduction of a Rs 3000 per month pension scheme for the large army of poor labourers in the unorganised sector, or a dole of Rs 6,000 per year to farmers, is both largely populist. The huge burden the government thus bears could seriously affect fund-raising for developmental projects and infrastructure schemes. Progress could virtually stop in its tracks. Those with a vision for the future would think twice before enlarging the scope of doles and subsidies – for which huge funds were already set apart. The subsidised rice scheme cost the nation a bomb, yet it appreciably aimed at poverty elimination. Now, what the poor could expect is also pocket money. Instead, governments would do well to spend judiciously on developmental efforts and thus create job opportunities for the poor in urban and rural sectors. In electoral terms, this might be less advantageous, though.
The budget has a lot of fancy schemes, but whether they will materialise or are set to be ignored or scrapped by the next government with a different mindset after May is a big question. The decision to raise the income tax ceiling from Rs 2.5lakh to Rs 5lakh will be of immense satisfaction to large sections of the salaried class based mainly out of cities. This is also done with a view to earning their goodwill even as the exchequer stands to lose heavily. The attempt, in specifics, all through the budget proposals was to win the support of various interest groups to enable the BJP to return to power this year. To that extent, this can be safely termed as a populist budget; one that does not address the urgent need for economic growth.
Question also is why the government slow-pedaled so far on all these packages for the poor and the middle class, and gave a surprise now, unless its aim was nothing other than to win the next polls or to outwit the Congress’ loan waiver for farmers.