Modi is slated to present a new budget 4 months before the general elections are held. Unlike other budgets this is not supposed to be a monumental affair. Governments are typically discouraged from unwanted spending sprees that are bound to leave their successors in a lurch. Interim budgets as these budgets are called are meant to keep the government funded till the next financial year which begins in April.
But Mr.Modi seems hellbent on breaking with this precedent in order to boost his chances of victory before the next general election. Fresh from his electoral drubbing in the latest state wide polls in the northern states, the prime minister will seek to cement his position by presenting an extravagant, populist budget filled with goodies for his electoral coalition that propelled him to victory in the 2014 polls in a phenomena that became known as the Modi wave. This coalition comprises of small business owners, a middle class living from paycheck to paycheck and last but not the least farmers.
Small business owners have typically been in Modi’s corner but they are still seething over the ill timed note ban that wrecked havoc on their business enterprises. Then came the governments new tax regime, the GST which suffered from both poor timing and implementation. Still recovering from the note ban small business owners all over the country were blindsided with the new tax law, causing their compliance costs to go through the roof.
The middle class isn’t too happy with Modi either, the note ban left many of them standing in long queues to get their currency notes exchanged. Job growth has also been stagnant for the past few years. An income tax cut seems imminent to placate the middle class.
Now we come to farmers, India is still an agrarian society with two thirds of our countrymen still relying on farming Indian as as their primary source of income. They too were badly hurt by the note ban. Agricultural prices haven’t risen in the past few years. We also saw a lot of farmer agitation in various Indian states calling for a general cancellation of loans to farmers. Farmers will want even more public access to direct credit at cheaper rates.
Somehow the prime minister has managed to alienate all factions of the very electorate that propelled him to victory. No wonder he is clinging as hard as he is to the Ram mandir issue to rile up his Hindu base. But there is no substitute for progress. The jobs that Modi promised haven’t materialized yet. His very public spat with the RBI for more funding left investors nervous as they feared for its autonomy. This latest spending bonanza by the prime minister is unlikely to soothe an agitated country starving for good jobs and progress.
At least ten lakh Indians join the workforce ever year and they will look to the prime minister to provide meaningful employment. Its not all doom and gloom for the prime minister however, he still remains the most popular politician in our country and his government isn’t burdened by corruption scandals that so plagued his predecessors and led to their eventual downfall. The Indian public gives high marks to the Modi government for honesty. In order to win back the public’s support Modi should outline his vision for the future and not make extravagant overtures to the public through the budget. The public is very likely to see such attempts for what they are, an unnecessary bout of spending just before an election. Really the prime minister ought to give the Indian public more credit.