Metamorphosis

Soon after Finance Minister Arun Jaitley presented the Union Budget for the financial year 2016-2017, both captains of industry and ministers of Prime Minister Narendra Modi cabinet started hailing the budget as pro-poor and for the welfare of farmers. Comparing the earlier two budgets of Narendra Modi government, does it mean that the NDA government, which was branded as corporate friendly, is in course correction mode?

“Definitely, the Modi government is in image makeover. Though, the budget is not as poor-friendly as it was expected, but one thing is very clear that it’s anti-rich,” opines Nikhil Dey, a noted social activist, who works for Mazdoor Kishan Shakti Sangthan (MKSS).

There are many initiatives in this budget that indicate a conscious attempt by the government to project a pro-rural tilt and counter barbs of it being, in Congress vice-president Rahul Gandhi’s words, a suit-boot ki sarkar.

But why there is a ‘sudden’ shift? On this Dey said, “The ruthless defeat in Delhi legislative assembly poll followed by crucial Bihar assembly election might have opened the eyes of Modi sarkar that rural folks are not impressed by hollow commitments of the government.”

“The widespread rural distress might have played a major role in opening the eyes of Modi government, which had proposed to restrict the rural job guarantee scheme – MNREGA – in just 200 districts soon after it came to power in 2014. The same government is talking about revamping the scheme and allocated Rs 38,500, which is an increase of scheme’s budgetary allocation by over Rs 3,800 crore in 2016-2017,” the noted social activist said.

Commenting on the allocations, Dey said, “It’s basically a welcome shift in the rhetoric, but not enough in the allocation. In my view, explaining things and looking at things is not very different from that of Congress. Nothing is substantial in terms of what is needed, but certainly there is a shift in the rhetoric, which is better than last year as in 2015-16 Budget, there was a disastrous cut in the funds of MNREGA.”

Agreeing with Dey, celebrated political commentator Arvind Mohan maintained that there is a course correction. “No doubt, Modi is a very different leader. He attempts to correct himself soon after any of his decisions don’t go in favour of the class or section of society for what his whole exercise was focused on.”

Hailing the move of Modi government to initiate health insurance scheme for elders and below poverty line beneficiaries, Mohan said, “It’s a bold step of Modi government as the scheme is on the lines of health insurance programme started by Rajasthan Chief Minister Ashok Gehlot of the Congress. The BJP, when it was in opposition at the Centre and state, had criticised the scheme in full volume and now they have introduced a part of it for the country. Though the decision is not a major one, but it’s a first step towards addressing healthcare issues. The Modi government should have made health a right for the countrymen. The right to get treatment would had been a remarkable decision if Modi would had taken a stand on it,” Mohan stated, adding that half has been done and half is to be done. 

The government has allocated Rs 1,500 crore for health insurance in the 2016-2017 budget, which is an increase of 152 per cent within one year for the Rashtriya Swasthya Suraksha Yojana, or National Health Protection Scheme (NHPS), a new nomenclature for the Rashtriya Swasthya Bima Yojana (RSBY). Under the NHPS, the finance minister announced a cover of Rs 1 lakh per family, while an additional cover of Rs 30,000 was announced for senior citizens.

Commenting on the focus to build infrastructure, the political commentator said, “It’s too early to say that government’s attempts are loaded with commitments as the government has made it clear that they would privatise the financially sound units and arrange funds for developing infrastructure for unviable units.”

On political compulsions, Mohan said, “It’s very obvious as to how Modi or the BJP can afford to lose another set of assembly elections which are in the line.  The BJP is eyeing victory in Assam, while in case of West Bengal and Kerala the party is aiming to open account and that cannot be accomplished without winning back the rural folks.”

“It’s not that Modi started his image makeover from corporate to pro-poor from this Budget, he had shifted his stand soon after Bihar catastrophe. Launching new crop insurance scheme was a step to give a golden handshake to farmer community. Apart from it, the decision to put contentious Land Acquisition Bill under backseat was also aimed at drawing the attention of poor farmers that Modi government is not corporate friendly,” he said.

“Changes in taxation is just an attempt to build an anti-rich image among real voters. Even though tax on dividends exceeding Rs 10 contradicts finance minister’s statement that there would be no retrospective taxation, the move indicates that rich people are being taxed,” Mohan said.

In reply to a question on how it will help the BJP in polls, Mohan said, “It will not help much, but it will reduce the damage. A perception among common man has evolved that Modi has started taking on corporate, which may help the party.”

Sharing his views to Millennium Post, Ashok Parakh, Chhattisgarh Finance Commission member, said, “Yes, we can say that Modi government has started thinking about development of rural India in a broader perspective. This is the reason that budgetary allocations of ministries of Rural Development, Agriculture have been increased, but it has failed to take any major step in the infrastructure building.”

Flaying the decision to increase FDI in retail upto 100 per cent, Parakh said, “It’s not a welcome step. This is move to give backdoor entry to corporate as 60 per of rural population is dependent on agriculture-based industries. In rural areas people are bound to live their lives on just Rs 50 per day. It’s also that with low quantity of agriculture economy, there are inferior services in countryside.”

Defending the government, Union Agriculture Minister Radha Mohan Singh said, “There is nothing like change in the mindset. The NDA government has always been pro-poor and pro-farmers. Right from Atal Bihari Vajpayee government to present government, all are committed for the welfare of poor only. Antyodaya Anna Yojana was launched in the previous NDA regime, which was later on copied by the Congress.” Adding further, Singh said, “We have launched several plans for farmers such as Soil Health Card, Pradhan Mantri Sinchayee Yojana, Pradhan Mantri Fasal Bima Yojna, etc. We are committed to be pro-poor and will remain the same till every poor man doesn’t get rid of it.”

In contrary to Singh’s statement, Farmers’ leader Sudhir Panwar said, “The incumbent NDA government has made so much hype about the welfare of farmers, but the allocation for it in the Budget is not in that proportion. The allocation in farm sector is just 1.8 per cent of the total allocated budget, which is not enough to meet the needs of 60 per cent of the population.”

Panwar, a member of Uttar Pradesh Planning Commission, said, “Allocation-wise, the Budget looks good, but not good enough to handle the current crisis being faced by farmers. Given that all schemes are futuristic, it won’t help in addressing the rising woes of the agrarian community.”

“Given the drubbing the BJP received in the Bihar elections and before that, in Delhi, the writing was on the wall that despite all the pre-election rhetoric about the Gujarat model and the failed populist policies of the previous government, what will happen is a U turn to a UPA-style Budget,” said Maitreesh Ghatak, who is Professor of Economics at the London School of Economics, and his main area of research is development economics.

The biggest impact of such a change of approach from the prime minister hopefully would be on the nature of the political discourse in the country. As the assembly election in Uttar Pradesh is in 2017, the BJP would pull out all their stops to get their control in the state either by itself or by entering into alliance with any regional satrap, hopefully, Bahujan Samaj Party. 

However, it would be too early to predict on how much the BJP would  gain in the coming future, but one thing is very clear that Modi has read the pulse of the nation and he may not take any such decision which would cost him in elections in terms of vote back share cut.