The Parliament hadn’t seen anything like this. At least not in recent decades during the presentation of the Union Budget.
Overwhelmed by new personal tax proposals whereby people earning up to Rs five lakh per annum and those making Rs 1.5 lakh worth of investment don’t have to pay any income tax for income up to Rs 6.5 lakh, a whole lot of other benefits and cash transfer of Rs 6,000 per year to 12 crore farmers — owning less than two hectares of land, MPs from the ruling NDA began chanting “Modi! Modi!” and continued thumping their desk for a few minutes.
It appeared that they all saw a direct benefit transfer (DBT) in electoral terms for themselves. After all, this final Budget of the Narendra Modi government, although technically an “interim” one, comes around 30 days ahead of the announcement of the Lok Sabha polls. The Budget contained elements that gave cheer to all sections of society: The middle class, farmers, traders and so on. It could potentially generate a feel good factor in both urban and rural areas.
The chanting among MPs seemed spontaneous. They were full of josh. The film Uri was mentioned twice of by Finance Minister Piyush Goyal, prompting Rajyavardhan Singh Rathore, ex-colonel of the Indian Army and Minister of State (Independent charge) Information and Broadcasting, and Sports, to shout, “How is the josh?” and allow a large part of the House to respond, “High, Sir!”.
Modi’s josh was very high since the beginning of the day’s proceedings, when Goyal rose to deliver his speech. He thumped his desk with vigour and knew what was to come. His stamp and ownership of this Budget was more than apparent. This was sixth Budget of the Modi government. On previous occasions, he only occasionally thumped desk to show his appreciation and endorsement, but on Friday the thumping was more frequent, coming almost every other minute.
The proposal to give Rs 6,000 per year to 12 crore farmers who have less than two hectares of land (including the landless in rural areas) has a startling date for initiation — 1 December, 2018. This has been made applicable with retrospective effect. The budgetary provisions are normally applicable from a prospective date, generally from the beginning of the next financial year, 1 April. Goyal said the amount, given from the newly-created ‘Pradhan Mantri Kisan Samman Nidhi’ will be given in three equal instalments of Rs 2,000 each. The government has already earmarked Rs 20,000 crore for the purpose.
This means that by 31 March, crores of farmers and landless labourers will have Rs 2,000 directly deposited in their bank accounts. Goyal said as much in his speech: “The first instalment for the period upto 31 March, 2019 will be paid during this year itself”. The Jan Dhan accounts and Aadhaar data will make it possible for the government for make payments to intended beneficiaries within the proposed time frame and without any leakage.
These payments will come to crores of people at a time when electioneering is be in full swing and the first phase of polling only days away. This could have a bearing on voter preferences, which will potentially benefit the BJP.
The move has stumped the Opposition, with former finance minister P Chidambaram, for instance, questioning the retrospective provision of this minimum guarantee payment, but refraining from commenting any further.
Welfare proposals for the poor, socially-backward, farmers, labourers and working classes found mention in paragraph 15 to 38 in the finance minister’s speech.
Modi tried to pamper the urban middle class with the announcement of a series of relief measures in personal taxation — those with a gross income of Rs 6.5 lakh will not have to pay any taxes; for salaried individuals, the standard deduction limit was raised to Rs 50,000 from Rs 40,000; relief in notional rent tax for those who have a second self-occupied house; TDS threshold to be raised on interest from banks; post office deposits raised from the current Rs 10,000 to Rs 40,000 and so on.
Interestingly, the finance minister’s speech, likely at the behest of the prime minister, contained a vision for next decade, till 2030. It comes at a time when nation is going to the polls. By inserting his 2030 vision, Modi has tried to give an impression that he is sure about the outcome of the next parliamentary polls.
“We have resolved many problems that were coming in the way of realising our full potential as a society and an economy. We are poised to become a Five Trillion Dollar Economy in the next five years and aspire to become a Ten Trillion Dollar Economy in the next eight years thereafter. In the Indian ethos, anything that is good is supposed to bestow, cause, create and do good in all 10 directions. I will, therefore, layout our vision for 10 most important dimensions in 2030,” he said.
Then came some punch lines, that could be easily picked up by BJP workers to build a narrative in their party’s favour. Sample some of them: “Inflation is a hidden and unfair tax on the poor and the middle class. The average rate of inflation during 2009-2014 was a backbreaking 10.1 percent…. in December 2018, it was 2.19 percent… “Hamari sarkar ne kamartod mahngayee ki kamar hi tod di. (our government has broken the back of back-breaking expenses)”. He then turned Manmohan Singh’s statement that the “first right over the country’s resources belonged to the Muslims” to say that the “first right over the country’s resources belonged to the poor”.
This Interim Budget was in no way an interim Budget, but few will be complaining.