Powered by Modi’s Guarantee

THE MODI GOVERNMENT'S INTERIM BUDGET PRESENTED on February 1 is an expression of confidence that it will be back in of­fice in May on the back of prudent economic management and socially inclusive policies seen to have delivered the fruits of development to people at scale. The Budget boldly proclaims that the empowerment model works better than the United Progressive Alliance's (UPA) entitle­ment approach. In other words, enabling the non-privileged rather than seeing them merely as recipients of dole—and, therefore, dependent vote banks. The Budget also makes a sharp political point—ensuring welfare benefits reach every eligible individual is "secularism in action"—and benefits all citizens irrespective of social standing or demographic affiliation. The Budget then is a precise articulation of economic goals anchored in a political and social vision that is steadfastly optimistic.

With less than three months to go for the Lok Sabha polls, Union Finance Minister Nirmala Sitharaman avoided populist pitches and while she did not hesitate to claim improvements as compared to the UPA years, there was not much triumphalism on display. In her sixth Budget speech, Sitharaman said the government infused a new sense of hope and purpose after it assumed office in 2014. In its second term, now drawing to a close, the government doubled down on its re­sponsibilities, guided by the mantra of social and geographical inclusivity, an attestation intended to counter the charge that some sections have been disadvantaged. It is in this respect, the reference to the "saturation approach" of covering all beneficiaries as true and comprehensive social justice is significant. "There is transparency and assurance that benefits are delivered to all… [and] resources distributed fairly," she said.

The Bharatiya Janata Party's (BJP) advocacy of the Ram tem­ple at Ayodhya in the 1990s was marked by trenchant attacks on the 'pseudo-secularism' of its opponents that it said privileged the appeasement of some over the rights of others. A compre­hensive social justice model, said Sitharaman, stood for true non-discriminatory secularism. This is a riposte to criticism that BJP's policies are politically and socially polarising and a counter-contention that it is pseudo-secular politics, driven by vote-bank considerations, that is inherently divisive. "We are addressing systemic inequalities that plagued our society. We focus on outcomes and not outlays so that socio-economic transformation is achieved… We believe in empowering the poor. The earlier approach of tackling poverty through entitle­ments resulted in very modest outcomes," the finance minister said, spelling out a belief that growth is a prerequisite for devel­opment as also equitable distribution of resources. The size of the cake must grow if the interests of the underprivileged are to be meaningfully protected.

The political mantra is not just a theoretical framework. The Budget speech based its expectations on development programmes that addressed the failures of successive govern­ments to provide people with the basic necessities of life. "In the last 10 years we have targeted each and every household and individual through 'housing for all', 'har ghar jal', 'electricity for all', 'cooking gas for all', and 'bank accounts and financial services for all' in record time," the finance minister said. She said food security had been provided through free rations to 80 crore people and minimum support prices (MSP) for crops revised regularly. "These and the provision of basic services have enhanced real income in rural areas," Sitharaman said. This is the bedrock of the Modi government's assertion that it has made a difference by working in mission mode to make good deficits that have lingered since Independence and which detract from India's claims to being a democracy that empow­ers and provides for citizens. As proof of the government's achievements, the minister pointed to 25 crore people rising above multi-dimensional poverty in nine years till 2022-23 (NITI Aayog report) and its positive implications for produc­tivity and growth. "Our government's efforts are now getting synergised with the energy and passion of such empowered people," she said.

THE BUDGET IS an articulation of Prime Minister Narendra Modi's approach to presenting an alternative to the caste-based identity politics of some of BJP's opponents. The Modi doctrine aims to be non-denominational but does not lose sight of the need to do more for the disadvantaged. The efforts to create a Mandal 2.0 platform based on demands like a caste survey are answered through the identification of "four major castes"—poor, women, youth and farmers. "Their needs, aspirations, and their welfare are our highest priority. The country progresses, when they progress. All four require and receive government support in their quest to better their lives," the finance minister said. Success on this score is under­lined by the achievements of direct benefit transfer (DBT) pro­grammes through the PM-Jan Dhan scheme that led to savings of ₹2.7 lakh crore. The funds saved have helped support wel­fare programmes. The scheme to assist street vendors has seen 2.3 lakh people receive credit for the third time (tranche). The PM-Vishwakarma Yojana provides assistance to artisans and craftspersons engaged in 18 trades. Many of these artisans also belong to the Other Backward Classes (OBCs) and Extremely Backward Classes (EBCs) that BJP's rivals hope to woo in an effort to disrupt a broader Hindutva consolidation.

Taking a leaf from political pitches that ask people to con­sider whether they are better off today than when the last elec­tion was held, Sitharaman asserted, "People are living better and earning better, with even greater aspirations for the future. Inflation is moderate. People are getting empowered, equipped and enabled to pursue their aspirations. There is effective and timely delivery of programmes and large projects." With an eye on opportunities for youth, she said seven IITs, 16 IIITs, seven IIMs, 15 AIIMS, and 380 universities have been set up. "PM MUDRA Yojana has sanctioned 43 crore loans aggregating ₹22.5 lakh crore for the entrepreneurial aspirations of the youth. Be­sides, a fund of funds, Startup India and credit guarantees are turning young entrepreneurs into employment generators. There is promise of more. A fund of ₹1 lakh crore is to be estab­lished with a 50-year interest-free loan." Repeating the sentence for emphasis, Sitharaman said the corpus will provide finance and refinancing with long tenures at nil or zero interest rates to encourage tech-savvy youth. "This will encourage the pri­vate sector to scale up research and innovation significantly in sunrise domains," she said. The minister added that a new scheme will be launched to strengthen deep tech for defence purposes—an area already witnessing considerable government-private partner­ship along with a vigorous startup culture.

RECOGNISING THAT housing is both a basic need and an aspirational goal, the Budget promises construction of two crore houses under the PM Awas Yojana (Grameen) in the next five years as a continu­ation of the current rollout of the scheme that is close to achieving the target of three crore units. Elaborating on Modi's recent announce­ment of enabling one crore households to achieve roof­top solarisation, the Budget says this will allow consum­ers to obtain 300 units of free electricity every month. "The scheme follows the resolve of the prime minister on the his­toric day of consecration of the Ram Mandir in Ayodhya," the minister said in the only reference to the Ayodhya temple in her speech. The government appears keen on expanding the housing programme through a scheme to help eligible sec­tions of the middle class "living in rented homes, or slums, or chawls and unauthorised colonies" to buy or build their own houses. It is possible that the scheme will be implemented by state governments and municipal corporations in keeping with guidelines to be announced later. Government planners believe providing housing has cascading benefits going by the lessons from existing schemes. A house improves social standing and security and reduces the need to sacrifice a substantial part of earnings as rent and opens the door to more earning options. In rural areas, beneficiaries have used a part of an allotted plot to set up cattle, sheep and goat sheds, and start vendor businesses. Some have added to the housing assistance to build additional rooms. Above all, having a house gives people a real stake in development and national life.

IN HIS RECENT public interactions, the prime minister has spoken of his discussions with tribal women in Madhya Pradesh's Shahdol, for long a rural backwater. "In this meet­ing, what stood out is that more than 100 'lakhpati didis' had come… Adivasi sisters. What one of them said… it is an eye opener, it speaks of their capabilities. That Adivasi daughter said I am a lakhpati didi and I earn so much. I asked her what do you do with the money you earn. She said her husband went to work on a bicycle and she got him a Scooty. See the self-confidence. She then said she learnt that a loan could be accessed from the bank. She bought a tractor and told me that her husband now uses it to gain employ­ment and the loan will soon be repaid. It shows what she can do," Modi told a meeting of BJP women leaders at an event at the party office on September 22 last year. At a post-Diwali meeting with journalists, he repeated the story, saying the interac­tions at Shahdol convinced him that change was in the air. "Believe me, I can pick these things up," he said. The Budget incorporates the ex­perience, noting that 83 lakh self-help groups (SHGs) with nine crore women are transforming the rural socio-economic landscape. "Their success has assisted nearly one crore women to become lakhpati didi already… Buoyed by the success, it has been decided to enhance the target for lakhpati didi from two crore to three crore," Sitharaman said. Almost every major programme of the Modi government has an implication for women, whether it is tapped water, electricity connections, cooking gas, housing, MUDRA loans, or the Ayushman Bharat health scheme.

Largely sticking to policy directions in the agriculture sec­tor rather than dwelling on specific initiatives, the minister said the PM Kisan SAMPADA Yojana that aims to develop cold chains, expand food processing capacities and ensure food safety has benefitted 38 lakh farmers. The formalisation of mi­cro food processing enterprises has helped 2.4 lakh SHGs and 60,000 individuals with credit linkages. There was no enhance­ment of the ₹6,000 a year transfer to farmers under PM Kisan in keeping with the absence of populism and in keeping with the norms of an interim Budget. There were mentions of promot­ing Nano DAP fertiliser and building on strategies to increase oil seed production along with measures for dairy development and fisheries. "A comprehensive programme for supporting dairy farmers will be formulated… India is the world's largest milk producer but with low productivity of milch animals," the minister said. The creation of a separate department of fisheries has helped double both inland and aquaculture production and the government aims to double exports to ₹1 lakh crore in the near future. The Budget has the expected commitment to maintaining government capex spending though there is no dramatic scaling-up of targets. In fact, the minister noted an uptick in private sec­tor activity and said, "Now that private investments are happening at scale, the lower borrowings by the Central government will facilitate larger availability of credit for the private sec­tor." The primacy of the PM Gati Shakti programme in building cohesion and Centre-state coordination in infrastructure projects is evident in the selection of the connectivity corridors that have been prioritised.

THERE IS AN interest­ing reference to plans to form a high-powered committee for "an exten­sive consideration of the challenges arising from fast population growth and demographic changes. The committee will be mandated to make recommendations for addressing these challenges comprehensively in relation to the goal of 'Viksit Bharat'," Sitharaman said. The contours and remit of this committee bear watching. The strategic implication of the population growth curve certainly requires advance plan­ning in all respects, such as the burden of an ageing popula­tion on the health and pension systems as well as the skilling requirements for the productive bulge. There is also the mat­ter of differing rates of population growth among religious groups. Census data shows all communities are recording lower fertility rates but unevenly. In a post-Budget interaction, Sitharaman said the committee is expected to deliberate on how best to utilise India's demography and diversity. Whether strategies to incentivise smaller families and working out ide­al population-resource ratios will be part of the committee's objectives remains to be seen.

WITH THE BUDGET speech being an account of eco­nomic and social performance, Sitharaman sought a renewal of mandate for the Modi government on the basis of performance. "We expect that our government, based on its stupendous work, will be blessed again by the people with a resounding mandate," she said at the start of her address. The advent of the government in 2014 was marked by vaulting ambi­tion as plans for a major transformation of physical and social in­frastructure were drawn up. The achievements of programmes like Swachh Bharat—coupled with economic reforms such as the Goods and Services Tax (GST), overhaul of bankruptcy laws and promotion of digital in­frastructure—have, the gov­ernment believes, substan­tially reduced frictions in the lives of people and, impor­tantly, provided a roadmap for the future. The minister took credit in pointing out that while the Covid-19 pan­demic and wars with global implications led to food, fer­tiliser and fuel shortages and inflation, India negotiated the choppy waters. "India as­sumed the G20 presidency during very difficult times for the world. The global economy was going through high inflation, high interest rates, low growth, very high public debt, low trade growth and climate challenges… The country showed the way for­ward and built consensus on solutions for the global problems," the minister said.

The pandemic and the Ukraine war have indeed plunged many Asian, African and South American nations into fiscal crisis and social unrest. In today's globalised world, the govern­ment believes voters can make the right comparisons and that Modi has earned their trust due to his leadership during trou­bled times. The crucial decisions to make anti-Covid vaccines in India, avoid fiscal solutions like stimulus or direct dole, buying discounted oil from Russia despite Western disapproval, and domestic initiatives to support those in need have earned the prime minister respect at home and abroad. BJP leaders feel his political capital is the cornerstone of the party's popular connect encapsulated in the 'Modi ki Guarantee' slogan. The interim Budget is a potent expression of that guarantee and the credibility it enjoys with voters.