The mountain labored and gave a mouse.
Expectations from the BJP government’s previous budget were sky-high. Notwithstanding its interim nature — a tradition usually warrants only a vote-on-account, a modest rollover of expenditures to see the government through for the few months until a new one is selected and presents its own budget — the media build-up was high. Knowing PM Narendra Modi’s ability for the dramatic, journalists and commentators expected some unexpected announcement that would take the nation’s breath away, grab banner headlines and send the stock market rising.
One report even recommended that halfway through the interim finance minister’s speech, Piyush Goyal would give way to Narendra Modi himself, who would rise and announce some unimaginable “major” announcement that would achieve just that. Given Mr. Modi’s fondness for the spectacular and the joy with which he announced demonetization over two years ago, it did not seem difficult.
In the case, it all turned out to be a damp parody.
The finance minister gave the longest interim budget speech on record, although it was remarkably void of rhetorical flourishes, witty wisecracks or even that hardy perennial: a sprinkling of Urdu couplets. He did not submit to Mr. Modi.
Certainly, there were the usual empty boasts of governmental achievements more illusory than real, peppered with numbers apparently made up by the screenwriter of the movie he mentioned 2 times in his speech, Uri: The Surgical Strike. There was the “vision thing”, in the order of 10 long-term goals for the future of India, mercifully unsupported by either fantastic figures or ordinary facts. But after 1 hour and 45 minutes of somewhat hoarse performance, we were left with – what? Precisely 3 major announcements, and one conspicuous omission.
The 3 acts of commission
The most notable of Mr. Goyal’s announcements was surely the much-anticipated basic income support for farmers, prophesied by pretty much every pre-budget analyst. But it rolled out to offer a grand total of Rs 6,000 a year – one Rs 500 note a month, in fact – to a community whose members have been performing suicide in record numbers. Would a farmer in the throes of existential depression find relief in a Rs 500 note? Would satisfaction come to him or her in the form of Rs 16.5 a day?
The Modi government avoided an occasion to rise to the challenge posed by Congress president, Rahul Gandhi, to devise a serious minimum income guarantee that would actually provide a living wage to the poorest of India’s poor, including by subsuming some of the current subsidies into such a scheme.
Worse still, its aid would only go to landholding farmers with two hectares of fields or less, not to the landless peasantry or farm laborers, and not at all to the urban poor. It would make certain no difference to the lives of its recipients.
But – and here’s the doubt of it – it would be rendered in 3 equal installments starting immediately, in other words allowing Modi government to transfer Rs 2,000 of our (taxpayers’) money into 17 crore bank accounts just in time to reach them before the 2019 Lok Sabha elections. One may as properly name it the Pradhan Mantri Re-Election Yojana.
The 2nd significant announcement, also widely predicted, was the doubling of the tax exemption limit from Rs 2.5 lakh to Rs 5 lakh. This belated gesture to the middle-class is indeed welcome – all the more so since it comes from a government that has been constantly dipping its hands into the middle-class’ pockets with an array of swingeing taxes, ranging from about Rs 20 excise duty on every liter of petrol to irrationally high GST charges on items of regular consumption. But accurately because it was expected, this news failed to send pulses racing.
The entirely other announcements of substance that seemed to signal any bold thinking were the proposed social security scheme for unorganized workers. While this section of our society carelessly deserves a social safety net, the numbers Mr. Goyal mentioned hardly inspire much hope. A 29-year-old would require to pay Rs 100 a month to be able to receive Rs 3,000 a month 31 years later. I don’t know what the actuarial calculations are, but it wouldn’t surprise me if almost any investment of Rs 1,200 a year over 30 yrs delivered better returns than that.
The one omission
So much for the 3 acts of commission. What about the 1 omission? Jobs. Put it in block letters: JOBS. The elephant in the room that the manager of the menagerie ignored to see.
The BJP has fallen India into a jobs crisis. The reckless and ill-considered demonetization, the botched and quick rollout of GST, and 5 years of macro-economic ineptitude have all stripped India of either 11 million jobs last year or more conservatively, 3.5 million jobs in 2 years. Both way, it is the reverse of the 10 million jobs a year promised by Narendra Modi in his absurd 2014 campaign speech. The NSSO figures the Modi government tried to suppress reveal a 6.1% unemployment rate, the highest in 45 years. Worse still, youth unemployment among males aged 15 to 23 is 18.7% and for females, it stands at a tremendous 27.8%.
“Where’s the josh?” the PM and his education minister both asked distinctive audiences recently. One must instead ask: Where are the jobs, Mr. Prime Minister?
The 1 saving grace, government sympathizers defensively say, is that the finance minister has been accountable and prudent, projecting a fiscal deficit of just 3.4% and promising to reach the 3% target next year. Sadly, we have heard this song before from this government. If you look back at the last 5 budget speeches, you will find that every year, the government has passed its own fiscal deficit projections, and every year it has promised to pull things back to 3%. Those of us who remember Mr. Jaitley’s promises will tell you that we ought to have been at 3% two budgets ago.
But Mr. Goyal won’t have to worry about a broken promise coming back to haunt him – because given the destructive shape of the economy, by the time the next budget has to be performed, there won’t be a BJP finance minister to do it.