Budget 2023: BJP's poll-centric calculations are clear

Voters would have enjoyed the benefit of lower taxes by 2024

61-Prime-Minister-Narendra-Modi New horizons: Prime Minister Narendra Modi with Union minister Jyotiraditya Scindia, Goa Chief Minister Pramod Sawant and Goa Governor P.S. Sreedharan Pillai | PIB

Everybody loves a good budget. Finance Minister Nirmala Sitharaman kept her fifth and the government’s last full Union budget before the 2024 Lok Sabha polls short and simple. Those looking for big reliefs may have been disappointed, but the government made sure that its key ‘constituencies’―especially the middle class and women―benefitted or can look forward to the fruits of development. The two headline-making announcements―income tax sops for the salaried class and the increase in capital expenditure to rev up economic growth―will keep voters happy, for now.

Promises like 50 additional airports and malls to promote and sell state-specific products, will keep the middle class moving and the aspirational class happy.

The last time the government announced sops for the salaried class was during the interim budget presented on February 1, 2019, two months before Lok Sabha polls. Then, the tax exemption limit was raised to Rs5 lakh. Now, with little over a year to go for Lok Sabha polls, the government has revised the tax exemption limit upwards to Rs7 lakh. Unlike in 2019, the salaried class would have enjoyed the benefit of lower taxes before casting its vote in 2024. The government will forgo Rs35,000 crore in revenue.

Prime Minister Narendra Modi had initiated the freebies versus development debate, so it was only prudent for the budget to focus on the latter. With government revenues booming, Sitharaman announced a 33 per cent increase in capital expenditure to Rs10 lakh crore―3.3 per cent of the GDP. The aim is the multiplier impact that investing in infrastructure would have on growth and employment. And, the aspirational class would be happy with new roads, ports and airports coming up near them. This is the third year in a row that the government has increased capex. This signals not just continuity, but also an intent that jobs be linked with development, instead of giving freebies. Similarly, promises like building 50 tourism spots, 157 nursing colleges, 50 additional airports and malls to promote and sell state-specific products, will keep the middle class moving and the aspirational class happy.

The Modi government has evidently realised that development makes for good electoral politics. It may have stopped short of using the much-maligned India Shining slogan, but it aggressively showcases new highways, metros, waterways and airports as symbols of a new India. Sitharaman announced a record outlay of Rs2.40 lakh crore for railways. The government has announced new Vande Bharat trains in many states and the increased outlay for railways will come in handy for announcing more new projects and sprucing up infrastructure, especially in the Hindi heartland, where railways projects have been used as political tools in the past.

The assembly elections in 2023 have also been kept in mind. An outlay of 05,300 crore was announced for the Upper Bhadra irrigation project, which would benefit drought-prone areas of Central Karnataka. For Telangana, the Indian Institute of Millets Research in Hyderabad will be supported as a centre of excellence.

In the last nine years, the government has created a beneficiary network which is then aggressively wooed during election campaigns. Sitharaman announced the numbers of these beneficiaries during her speech: “11.7 crore household toilets under Swachh Bharat Mission; 9.6 crore LPG connections under Ujjwala; 220 crore Covid vaccinations for 102 crore persons; 47.8 crore PM Jan Dhan bank accounts; insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana, and cash transfer of Rs2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.” We envision a prosperous and inclusive India, said Sitharaman, in which the fruits of development reach all regions and citizens.

Women have shown different preferences and poll percentages compared with men. Sitharaman, who wore a red sari, proposed the Mahila Samman Savings Certificate with a fixed interest rate of 7.5 per cent for two years. The deposit can be made in the name of a woman or a girl. The limit is Rs2 lakh and the scheme will have a partial withdrawal facility. Elaborating on women-centric initiatives, the finance minister said that as part of the Deendayal Antyodaya Yojana-National Rural Livelihood Mission, 81 lakh self-help groups have been established by enrolling rural women. “By establishing huge producer firms or collectives with each having several thousand members, we will enable these groups to achieve the next stage of economic empowerment,” she said. The prime minister said in praise of the budget that miracles could be performed if women self-help groups were further strengthened.

In a relief to senior citizens, who are also a supportive, middle-class constituency for the BJP, Sitharaman announced raising the limit for the Senior Citizen Savings Scheme from Rs15 lakh to Rs30 lakh.

The budget also caters to new constituencies. This includes tribals―who can be decisive in election-bound states in the northeast, and in Chhattisgarh, Madhya Pradesh and Rajasthan. “The Pradhan Mantri Particularly Vulnerable Tribal Groups Development Mission will saturate families and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities,” said Sitharaman, adding that Rs15,000 crore will be made available to implement the mission over the next three years. There is also the announcement that 38,800 teachers and support staff will be recruited for 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students. A scheme for makers of handmade goods was also announced; Vishwakarma is a broad category of artisans where most of the people belong to backward and marginalised castes.

Before the Delhi municipal elections, the BJP took hordes of people to showcase houses built for slum-dwellers. Though the party did not do well in the elections, it revealed a crucial tool in its poll outreach. Sitharaman announced that the outlay for the PM Awas Yojana has been increased by 66 per cent to over Rs79,000 crore.

Similarly, in view of the increased penetration of mobile phones and smart TVs, the government cut taxes on them. A national digital library for children and adolescents will make available quality books across geographies and languages―another way to connect to the rural population.

The government has already announced that it will continue to supply free food grains to over 80 crore people. Sitharaman said the expenditure of about Rs2 lakh crore will be borne by the Centre.

The budget proposes to spend Rs2,200 crore on high-value horticulture and set up an agriculture accelerator fund to finance farm startups. However, the overall allocation for the agricultural sector has been reduced from 3.84 per cent of the total budget last year to 3.20 per cent this year. The Samyukt Kisan Morcha (SKM), the umbrella body of farm unions, has decried the cut and also the reduction in allocation on rural development (5.81 per cent to 5.29 per cent) and in MNREGA funds (Rs90,000 crore to Rs60,000 crore).

A statement from the SKM said: “Since the general economy and especially the rural economy is still in deep crisis, it is unbelievable that the government has hacked down the allocation for MNREGA to Rs60,000 crore, a dramatic cut of Rs30,000 crore. The government should stop fooling farmers and seriously focus on resolving the critical issues of farmers like legal guarantee of MSP, crop insurance, reduction of input costs and steady availability of inputs.”

The opposition was quick to deride the budget as election-centric. “This budget is big on announcements and short on delivery,” said Congress president Mallikarjun Kharge. “The budget makes no effort to find a solution to massive unemployment. Inflation is hurting every household and the common man is in trouble. There is nothing in the budget that would reduce prices of items of daily use.”

Whether the critical voices reach the common man or not, the highlights of the budget are highly likely to do so. Because the BJP’s massive cadre will soon be on the ground, hard-selling this budget as a manifesto.