Fifty years after the then prime minister Indira Gandhi, who also held the finance portfolio, presented the budget, Nirmala Sitharaman became the first full-time woman finance minister to present the budget. Her budget presentation was replete with political messages—a thanksgiving exercise for those who helped BJP win a second term. The finance minister also appeared to balance the political message by proposing corporate reforms like easing FDI norms, setting disinvestment targets of Rs 1 lakh crore, while at same time taxing the super rich.
Sitharaman broke another tradition as she held the budget papers in a stitched red cloth bahi khata (ledger), instead of a leather briefcase that former finance ministers carried, signifying the seriousness of the financial papers it carried. “It was a good time to break from the colonial practise,” she said. The symbolic gesture was also aimed at the business community which has been BJP's core constituency, for whom she also announced a pension scheme—Pradhanmantri Karm Yogi Maandhan Yojna.
But, the far bigger political message came in the way she structured her budget speech. Instead of talking about different sectors as has been the precedent in most budgets, she humanised the two-hour eight minute speech by categorising financial benefits and schemes for different social groups—youth, women, urban India, and rural India. In fact, these were the prime social groups which stood behind Narendra Modi, giving him a second tenure with overwhelming numbers.
Dressed in a pink sari, Sitharaman began her speech with a folded hands, as her journalist daughter and parents watched intently from the visitors gallery inside the Lok Sabha. “Every section—young, old, first time voters, voters since the first general election, and women—all turned up to stamp their approval on a performing government. Through their unambiguous and firm mandate, they have reaffirmed putting the nation first,” Nirmala said, revealing the political intent of the financial exercise. Prime Minister Narendra led his party men as they thumped their desks in approval of the minister's statements. Opposition benches were attentive and they did not interrupt.
Instead of announcing new schemes or big ticket infrastructure programmes, the finance minister stressed on increasing allocation for existing schemes to bring change. She also did not disappoint those who craved for poetry in an otherwise drab exercise. She punctuated her speech with quotes from Chanakya, Swami Vivekananda, Mahatma Gandhi, Lord Basaveshwara, Sangam literature, and Urdu poet Manzoor Hashmi.
For the middle class, Nirmala Sitharaman announced an additional deduction of up to Rs 1.5 lakhs for interest paid on loans borrowed for purchase of an affordable house valued up to 45 lakh, which translates into enhanced interest deduction up to 3.5 lakh. To give boost to purchase of electric vehicles, she gave another tax deduction of Rs 1.5 lakhs on loans. She also announced allowing Aadhaar card to file tax returns if one does not have a Pan Card. Though she did not announce any change in the tax slabs, she addressed another enthusiastic Modi constituency of NRIs by relaxing Aadhaar card norms for them.
For the youth, she clubbed all the initiatives in education, job creation through startups, by announcing multiple sops for them including a TV channel. Among key initiatives include Rs 400 crore for developing world class institutions with a new scheme of study in India to attract foreign students here, who will also bring foriegn exchange. To establish regulatory systems of higher education, Sitharaman, an alumnus of JNU, said a draft legislation for setting up Higher Education Commission of India (HECI), would be presented in the year ahead. She also announced National Research Foundation (NRF) to fund, coordinate and promote research in the country. Modi government is trying to address job growth through self-employment and private sector.
In fact, treasury benches welcomed the initiatives Sitharaman announced for urban and rural India. She announced that the third phase of Pradhan Mantri Gram Sadak Yojna will upgrade 1,25,000kms of rural road length over the next five years, with an estimated cost of 80,250 crore. Setting up of 100 new clusters for artisans will be done. Sitharaman said the government would support a zero budget farming concept to help the agriculturalists. For urban India, she announced modernisation of railway stations and promised higher investments in rapid transit systems.
Sitharaman drew cheers as she announced sops for the women. The current Lok Sabha has the highest number of women—78 MPs. She proposed to set up a broad-based committee with government and private stakeholders to evaluate and suggest action for moving forward on the issue of gender budgeting.
However, the finance minister's announcement of increasing custom duty on gold and other precious metals from 10 per cent to 12.5 per cent was not the most welcomed declaration.
Highlighting the potential benefits of the budget, PM Modi said that the budget will accelerate the pace of development in the country and will greatly benefit the middle class. “The budget will simplify the tax process and help in modernising the infrastructure in the country,” PM added.
The second focus of the budget has been the financial sector as Sitharaman announced disinvestment targets, relaxation of FDI norms, recapitalisation of the public sector banks, rescue package for the NBFCs, removal of angel tax from startups, reduction of promoter holdings in listed companies.
The Opposition parties hit out at the budget, calling it listless and opaque. Former finance minister P. Chidambaram said it was the most opaque budget and made no mention of the agriculture system. CPI(M)'s Sitaram Yechury called the budget a payback to corporates.
