Painting the Rainbow

IN THE 2014 LOK SABHA POLLS, NARENDRA MODI LED the Bharatiya Janata Party (BJP) to a clear majority with 282 seats, receiving a record 17 crore votes adding up to 31 per cent of votes polled. Some commentators wrote that this was just one-third of the vote, suggesting the rest did not endorse BJP. For one, India’s first-past-the-post system is intended to deliver stable governments, and for another it was not as if all the rest had combined against BJP. And, of course, BJP received near or more than 50 per cent votes in many states. In 2019, Modi and BJP did one better. The party got 22 crore and 37.3 per cent of the vote share and 303 seats. Since then, the prime minister has worked assiduously to expand BJP’s tent of supporters, paying particular attention to sections of the electorate that had not been the party’s voters even as he backed initiatives to accelerate development and expand the economy.

On February 1, Union Finance Minister Nirmala Sitharaman’s Budget trod this line carefully, balancing targeted interventions to support artisans, small farmers, women’s self-help groups (SHGs), tribal and fishing communities, and senior citizens, with bold steps to broaden and deepen growth by making public and corporate governance more transparent, improve urban infrastructure, modernise municipalities, simplify taxation, discourage tax exemptions, and promote startups. The Budget does not attempt to reinvent the wheel—it recognises that only a bigger pie will help satisfy rising aspirations. This is already happening as India’s per capita income nears ₹2 lakh, up from ₹89,796 in 2014, What the Budget does is to try and quicken the process and make it more inclusive.

The one lesson the Modi government has not forgotten is the Vajpayee government’s meltdown in the 2004 General Election despite a creditable economic record. The role of the misplaced ‘India Shining’ campaign in the National Democratic Alliance’s (NDA) defeat might be overstated (Vajpayee ignored his instincts in breaking with key allies in Tamil Nadu, Haryana and Assam), but Prime Minister Modi has fully internalised the need to support those at the bottom of the socio-economic pyramid.

In doing so, he has steadily built a rainbow coalition that includes most social groups even if polarisation of the political discourse means certain faultlines persist. His success in retaining and nurturing the support of the poor has frustrated his opponents unable or unwilling to understand either the cultural pull of Hindutva or the tangible benefits of the government’s welfare policies. Seen through this lens, the Budget provides a clear vision of NDA’s election strategy for 2024 where it will look to consolidate key social blocks and also work on the dictum that a rising tide lifts all boats.

In November 2021, Modi announced a rollback of the three farm laws that aimed to reform the agriculture sector in the face of persistent opposition from farm unions, mainly from Punjab, that had laid siege to roads leading to Delhi for more than a year. He said the government had been unable to explain the benefits to protesting farmers and had decided to scrap the laws passed by Parliament. He timed his remarks to the occasion of Guru Nanak Jayanti, looking to tap the symbolism of the day in the light of reports that Khalistani elements had sought to infiltrate the anti-farm laws stir. The 2023-24 Budget holds out the promise of sweeping reforms in the farm sector, proposing a Digital Public Infrastructure (DPI) for agriculture as an “interoperable” public good to enable inclusive, farmer-centric solutions that provide information on crop planning, farm inputs, credit, insurance, market intelligence and boost agri-tech and startups. The Budget seeks to leverage the success of the startup culture, which has evolved into a new and relevant ecosystem, in agriculture through an accelerator fund. The objective is to bring in modern technology and encourage innovation and entrepreneurship.

In other words, the agriculture reforms envisaged go much beyond the scrapped farm laws that had sought to encourage contract farming, allow farmers to sell produce to buyers of their choice, and do away with stock limits for foodgrain. The farm laws sank under the suspicion—fuelled by farm unions and political parties—that they would spell the end of the Minimum Support Price (MSP, floor price) for crops. The 2023 Budget promotes Public Private Partnerships (PPP) for market linkages and encourages measures to improve productivity of horticulture and cash crops like cotton and popularise millets as “Shree Anna”.

In an allied initiative, the government is looking at reforms in the cooperative sector as well, an area that has seen the capture of institutions by powerful politicians with the predictable result—scams and financial misgovernance. Computerisation of primary agricultural credit societies is underway and cooperative bylaws are being reformed through model laws. Cooperatives welcomed the initiatives with Prakash Naiknavare, managing director, National Federation of Cooperative Sugar Factories, saying that the relief to the cooperative sugar sector will help unleash the true potential of cooperatives. “The proposal to provide an opportunity to sugar cooperatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 is expected to provide a relief of about ₹10,000 crore to small and marginal farmers of the country,” he said. In her speech, Sitharaman said “[W]e will implement a plan to set up massive decentralised storage capacity. This will help farmers store their produce and realise remunerative prices through sale at appropriate times.” The Budget proposes multipurpose cooperatives with an enhanced focus on fisheries and dairies. Fruits, vegetables, horticulture, animal husbandry and coarse grains are seen as growth sectors where modernisation has lagged despite strong gains in the past couple of decades.

A capital outlay of ₹2.4 lakh crore, the highest ever, has been provided for the Railways. This is nine times the 2013-14 allocations. The goal is to complete 100 critical transport infrastructure projects, for “last and first mile” connectivity to ports, coal, steel, fertiliser, and foodgrains with investment billed at ₹75,000 crore, including ₹15,000 crore from private sources. In keeping with developing regional hubs—the swelling crowds at airports are partly due to smaller places being brought onto the air grid and increased frequency of flights—50 additional airports, heliports, water aerodromes and advance landing grounds will be revived. Linking borrowings by states to improved urban governance and power sector reforms are another push to developing future-ready cities though the effort requires much more work.

Despite a small uptick in the rates of women’s participation in the work force, as per periodic labour force surveys, the low level of female employment is what public policy scholars describe as a “wicked problem”. Several factors prevent fuller female participation in the work force. Many are related to domestic situations with qualified women opting out of regular employment for child-rearing. Often enough, a return to employment is not easy and office environments remain disadvantageous for women who are expected to shoulder a greater share of domestic burdens. Further, much of labour done by women in rural homes is not duly acknowledged. A situation where half the population is not able to realise its potential is bound to impact national growth. China’s significant success in poverty alleviation and education is matched by a women labour force participation rate of over 60 per cent compared to around 25 per cent in India.

Seeking to change this discouraging situation, the government wants to build on the success of a National Rural Livelihood Mission (NRLM) that has mobilised 81 rural women SHGs. Larger cooperatives will receive end-to-end assistance by way of design, quality, branding and marketing of their products. The quality control and market integration are key challenges for SHGs and small farmers and digital pathways promise to open opportunities and overcome hurdles that have defied governments. A savings scheme with a limit of ₹2 lakh deposit fixed for two years will help small-income earners and follows other initiatives like LPG connections and Jan Dhan account transfers during the Covid pandemic. Women voters have rooted for Modi and are seen to be a reason why BJP was able to escape incumbency in Uttarakhand last year despite the state’s reputation for alternating verdicts. Female voters endorsed BJP in Uttar Pradesh (UP) where it won a second consecutive majority and were enthusiastic backers of the party in Gujarat, helping it score a record 156 seats for a seventh term.

MODI’S PROMISE OF “NON-DISCRIMINATORY” DEVELOPMENT has cut caste and religious barriers, creating a larger socio-economic constituency. There are beneficiaries who will not back BJP for other reasons but the pool has social groups like backward castes or Dalits and tribals. The party has wooed these sections assiduously and Other Backward Classes (OBCs) in many states, including UP and Bihar, have viewed BJP in a positive light as the grip of Mandal parties loosens. The Budget’s outreach to traditional artisans and craftspeople, under the “Vishwakarma” tent makes economic and political sense. Arts and handicrafts are, as Sitharaman said, the true spirit of Atmanirbhar Bharat. As with women SHGs and small farmers, a package of assistance aims to improve “quality, scale and reach of products, integrating them with the MSME value chain”.

The policy is not piecemeal. It includes financial support along with skilling, modern digital techniques, green technologies, brand promotion, linkages with local and global markets, and social security. “This will greatly benefit Scheduled Castes, Scheduled Tribes, OBCs, women and the weaker sections,” the finance minister said. The plan outlined is ambitious and it remains to be seen how it is implemented given that most measures require the cooperation of states. Yet, it has been seen that, away from the glare of competitive politics, states have willingly adopted policies that help achieve social and economic goals. Of the 1,000-odd Aadhaar-enabled government schemes, two-thirds are run by states.

The finance minister placed the Budget announcements in the context of the Modi government’s political and social vision and its performance. Arguing that the government has worked for a “prosperous and inclusive” India, she said the projected 7 per cent growth this year is the highest among major economies. The success of digital platforms like Aadhaar, CoWin and Unified Payments Interface (UPI) amid the pandemic underscored the resilience in the economy. The recently announced National Hydrogen Mission meant the government is not resting on its laurels and continues to seek energy security. The decision to foot the entire public distribution system (PDS) bill and payments of ₹2.2 lakh crore for 11.4 crore farmers underlines the commitment to the poor.

The Budget outlined the government’s priorities as the “Saptarishi”, or the seven sages (the big dipper constellation is also referred to as Saptarishi), and these stress goals that Modi has iterated with increasing insistence. Development, Sitharaman said, should be inclusive and reach the last mile. The focus on infrastructure and investment remains undiluted, unleashing the growth potential, green growth, youth power, and the financial sector. In recent months, the prime minister has emphasised the centrality of “saturation” in welfare schemes or the need to overcome the last mile. This has been a consistent focus based on his long experience as chief minister of Gujarat. The reference to Particularly Vulnerable Tribal Groups (PVTGs) is significant in this context as these communities have long been outside the pale of national life, alternately threatened by loss of habitat or subject to patronising policies that see them as exotic exhibits. The PVTG policy promises to bring to them basic infrastructure, education and modern connectivity. A part of the last-mile approach is the decision to designate 500 blocks as aspirational following a similar initiative for districts.

The MISHTI scheme announced by the finance minister supports conservation and livelihoods in mangrove areas which are ecologically fragile zones. Coastlines and salt pan areas should benefit with the help of funds allocated under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) set up on the Supreme Court’s orders. Similar attention has been paid to the wetlands ecosystem with Ramsar sites rising to 75. Initiatives for the youth include Artificial Intelligence (AI), coding, and drones. Studded with dozens of initiatives, the Budget reflects a 360-degree vision.

agricultural productionagricultural reformsdigitisationfarmersfinancial creditmarket accessNirmala SitharamanOpenomics 2023Union Budget 2023