Class Apart

ALTHOUGH THE TERM ‘middle class’ finds mention only twice in Finance Minister Nirmala Sitharaman’s Budget speech, her proposals cheered this large chunk of the country’s population, a heterogenous group with household annual incomes ranging from ₹5 lakh to ₹30 lakh and which accounts for close to 45 crore Indians. Ahead of the General Election next year and the crucial polls to nine state Assemblies this year, the announcements in the Budget also struck a chord with women, many of whom fall in the middle-class category and form 67 crore of India’s 140 crore people. Together, women and the middle class have emerged as formidable voting blocs.

Even before Sitharaman tabled the Budget in Parliament on February 1, she had said that she felt for this segment because she, too, belonged to the middle class. During her speech, the minister used the adjective “hard-working” when she brought up proposals that she said would be of primary interest to the middle class. The Modi government’s fascination with this demographic is nothing new but has now entered a definitive phase where it is making greater efforts to ease the cost of living by putting more money in consumers’ hands. In 2014, shortly after he presented the first Budget for the NDA government, then Finance Minister Arun Jaitley told Open in an interview, “There is an aspirational India whom I have referred to as the ‘neo-middle-class’. It has to be supported and strengthened.”

Notes economist and author Rajesh Raj SN: “The Budget has made a lot of announcements that will raise the quantity of money in the hands of the middle class and, therefore, will increase overall spending.” He cites the new tax slabs and rebates among the steps that will boost the disposable incomes of the middle class. Avani Kapur, senior fellow at the Centre for Policy Research (CPR), agrees, “There is relief in tax slabs for the middle class in the hope that it spurs consumption, thereby propelling growth.” For his part, economist Partha Mukhopadhyay states, “There has been a reasonably generous readjustment of tax slabs for the middle class. All in all, it’s a good move for them, but also means a loss of ₹35,000 crore for the government annually. The higher exemption limit under the new scheme may make the experience of paying taxes easier for younger taxpayers who are not likely to lose from giving up on deductions.”

Ravi Srivastava, director, Centre for Employment Studies, Institute for Human Development, calls it a welcome move. He adds, “There are tax concessions across the board. The middle class will get some relief and elbow room for higher consumption. Inflation had gone up and some accommodation was needed after several years.” Rathin Roy, managing director of the Overseas Development Institute and former member of the Economic Advisory Council to the Prime Minister (PMEAC), is of the view that “given that we have had 20 per cent inflation over three years, fiscally, it is a good adjustment of tax slabs… It’s a desirable move, but given the small number of people who pay tax, the big picture is irrelevant.”

Incidentally, at a meeting of the Union Council of Ministers two days before the Budget presentation, Prime Minister Narendra Modi had asked his ministers to reach out to all sections, particularly the middle class, to familiarise them with government schemes that benefit them.
The middle class has been BJP’s core support base. A day after last year’s presentation of the Budget, which was criticised for not giving any income-tax relief to the middle class, Modi had said the focus was on providing basic amenities to the poor, middle class, and youth. This year, he said, the Budget would fulfil the dreams of the aspirational society, including the poor, middle class and farmers.

Likewise, the Budget launched a new small savings scheme called Mahila Samman Savings Certificate, to be made available for a two-year period up to March 2025. According to the Budget, it will offer a deposit facility of up to ₹2 lakh in the name of women or girls for two years at a fixed interest rate of 7.5 per cent with a partial withdrawal option. The government has also highlighted the Deendayal Antyodaya Yojana National Rural Livelihood Mission as a huge success: it has mobilised rural women into 81 lakh self-help groups. The Modi government is already known for its women’s outreach schemes that include specific programmes for women farmers. Its earlier schemes, such as offering LPG cylinders and toilets, were targeted at reducing the hardship that women typically face in the countryside when they venture out in search of firewood or to answer the call of nature. The ruling BJP also plans to field more women in the upcoming elections. Moreover, the representation of women in the party has been on the rise over the past decade.

Several initiatives announced in the Budget, especially in the development sector, are customised with benefits for the middle class, those aspiring to be part of that category, and those who were so far left in the lurch amidst the government’s digitalisation push. It also featured endeavours to make education and medical care accessible to those in the hinterland.

Santosh Vyas, principal of New Delhi’s Sadhu Vaswani International School, says that Budget 2022-23 focuses on enhancing the quality and standard of the Indian education system. She says it appears to be a holistic plan for taking the education sector to new heights encompassing all aspects ranging from making the young generation employable and future-ready to creating grounds for turning India into a land of innovation. What impressed her the most is the inclusivity of the plans. “Identifying youth power, inclusive development and unleashing the potential as priority itself presents a broad vision, which will have its own trickle-down effects on the education system,” Vyas posits.

Of the announcements that she thinks are significant, she says, “Hiring of 38,800 teachers and support staff for the 740 Eklavya schools serving 3.5 lakh tribal students will be instrumental in fulfilling the dreams of children in remote areas.” With the states being encouraged to set up physical libraries at panchayat and ward levels, resource availability for children in rural areas will be ensured, she avers.

The Budget also dwelt on teachers’ training, which, it said, “will be re-envisioned through innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys, and ICT implementation.” It said that the District Institutes of Education and Training (DIETs) will be developed as vibrant institutes of excellence for this purpose.

Meanwhile, the Pradhan Mantri Kaushal Vikas Yojana 4.0 scheme will train lakhs of youths within three years. Training will be given in a raft of subjects, including coding, AI, robotics, mechatronics, Internet of Things, 3D printing, drones, and soft skills. “To skill youth for international opportunities, 30 Skill India International Centres will be set up across different states,” the Budget states. It adds that the digital ecosystem for skilling will be further expanded through multiple measures focused on MSMEs. Notably, the Budget announced the creation of a National Digital Library for children and teenagers. The Budget added, “Additionally, to build a culture of reading, and to make up for pandemic-time learning loss, the National Book Trust, Children’s Book Trust and other sources will be encouraged to provide and replenish non-curricular titles in regional languages and English to these physical libraries. Collaboration with NGOs that work in literacy will also be a part of this initiative. To inculcate financial literacy, financial sector regulators and organisations will be encouraged to provide age-appropriate reading material to these libraries.”

THERE HAS BEEN NO LOOKING BACK SINCE Prime Minister Modi kickstarted Digital India, the ₹1.13 trillion flagship programme of the Centre, in July 2015 to transform, according to its mission, the country into a “digitally empowered society and knowledge economy”. This Budget is yet another confirmation that, alongside quick fintech adoption, the government is committed to ensuring last-mile connectivity in segments that are seeing a massive rise in digitalisation, especially health and education. At the same time, the Centre wants to leave no stone unturned in offering skills and services offline, too. “The government doesn’t want to leave out those who are typically called unconnected. It is following a two-pronged approach in social sectors, as is evident from Budgetary provisions in enhancing the digital framework as well as in equipping more people to embrace digitalisation,” says a government official.

Sample this Budget announcement: “An ‘Entity DigiLocker’ will be set up for use by MSMEs, large businesses and charitable trusts. This will be used for storing and sharing documents online securely, whenever needed, with various authorities, regulators, banks, and other business entities.”

The government has also set aside funds for setting up 100 labs for developing applications using 5G services in engineering institutions to realise a new range of opportunities, business models, and employment potential, especially in SMEs.

Then, again, digital push as well as connecting digital-dark areas go hand-in-hand. The Budget plans to offer stipend support to 47 lakh youth in three years as part of a Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme. The schemes to digitalise and to take services to interior areas are two sides of the same coin, notes a Delhi-based official involved in the framing of these schemes. A National Education Policy is in the offing focused on skilling to facilitate job creation and business opportunities at the grassroots.

To be sure, measures taken towards digitalisation, especially in financial transactions, have been a huge hit: at least 123 crore people in India now own Aadhaar digital biometric cards. India has the highest fintech adoption rate globally, at 87 per cent, compared with the global average of 64 per cent.

The news on the health front has not been bad either.

The government announced in the Budget that facilities in select Indian Council for Medical Research (ICMR) labs will be made available for research by public and private medical college faculty and private sector R&D teams “for encouraging collaborative research and innovation”.

Sitharaman also launched a new programme to promote research and innovation in pharmaceuticals through centres of excellence. “We shall also encourage industry to invest in research and development in specific priority areas,” she said in her speech.

K Srinath Reddy of the Public Health Foundation of India offers his take: “The Union Budget moves from preoccupation with Covid-19 response to a broader commitment to the delivery of comprehensive health services with an equity focus. Attention to the health needs of the tribal population comes through a mission to eliminate sickle cell anaemia by 2047.”

The Budget had stated that the mission to eliminate the disease “will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 years in affected tribal areas, and counselling through collaborative efforts of Central ministries and state governments.”
It further announced new nursing colleges will be established “in co-location with the existing 157 medical colleges established since 2014”. Sitharaman said that “dedicated multidisciplinary courses for medical devices” will be supported in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing and research.

Reddy believes the opening of these new nursing colleges will partially address the need to create a larger multi-layered, multi-skilled workforce. “The Aspirational Blocks Programme, aiming to ensure scaled-up developmental services to 500 blocks, will have a health component. Increased investment in digital health will improve access to, and quality of, health services,” he states, and adds, “However, the scant increase in the Budget of the National Health Mission does not match its expanded mandate to deliver comprehensive primary healthcare to both rural and urban areas.”

Reddy is however upbeat about the increased investment in pharmaceutical research, the opening up of ICMR laboratories to joint research with the private sector, and so on. “Millet mission and cooperatives in agriculture, fisheries and dairy will improve the quality of nutrition and enhance food security. Increased investments in green-energy technologies, low-pollution transport systems, education, youth skilling and empowerment of women’s self-help groups with income earning opportunities are actions outside the conventional health sector but will serve to promote the health of the population,” he points out.

Any way you look at it, the Budget certainly offers the great Indian middle class much to hope and aspire for.

educationhealth sectorIndian consumersIndian middle classNirmala SitharamanOpenomics 2023Union Budget 2023