This budget errs by neglecting the PM’s most dedicated supporters

There are only two things you can take for granted in the world we live in.

The first is that the sun will rise in the East and set in the West. The second is that each year, when the budget is presented in parliament, businessmen will rush forward in joyous ecstasy, like super-fans at a Taylor Swift concert.

 

“This is a fantastic budget’, they will gush. “The Finance Minister is a genius”. Or this: “But of course, we should not forget the role of the Prime Minister whose vision guides India.”

 

   This fan boy (and now, increasingly, fan girl) nonsense tells us nothing. If the Finance Minister were to rise to announce the end of the world, the captains of industry would give her a standing ovation and praise her brilliance anyway.

 

   The truth is that most honest reactions to the budget have been much less fan-like. There have been valid criticisms of the route the government has chosen to take the economy forward. And there are also those who have appreciated some of the budget’s proposals. But three things have stood out in the aftermath of the budget.

 

   The first is the growing dissatisfaction and anger within the urban middle class. While the middle class is not particularly significant in terms of total electoral numbers, it is the class that pays income tax. It is also the class that first bought into the cult of Narendra Modi and more recently, accepted the BJP’s caricature of the Congress as a dangerous left-wing party .(Remember the BJP’s claims about the confiscation of buffaloes and the snatching of  Mangalsutras?) It nodded along when the BJP suggested that Rahul Gandhi was a dullard who could not be trusted to lead the country.

 

   Even before Budget Day there were signs that this class was re-assessing its assumptions and priorities. Much of the disgruntlement was expressed in terms of complaints about excessive taxation but behind that there was also a deeper resentment. Salaried Indians felt that while rich businessmen (not just the oligarchs) had got much richer in the Modi years, hardworking people like them had never got the rewards they deserved. The Prime Minister dined and celebrated with his rich friends even though he knew that they would support any party that was likely to help them. (Remember Modi’s famous election speech about how the super-rich, including his own pals, were sending tempos full of money to the Congress?)And yet, he gave these fair-weather friends a disproportionate amount of attention while neglecting his devoted salaried supporters.

 

   The salaried middle class was the class that expected something special from the budget, perhaps as a reward for a decade of loyal support. But, in real terms, it got damn all. There was marginal tweak of income tax rates but not enough to make much difference to many middle class taxpayers.

 

   Worse still, the government then targeted the few means left to the middle class to save some money. The revision of the rates of Capital Gains taxes was widely unpopular. And the removal of the indexation principle while calculating Capital Gains tax meant that houses (where middle class people had invested a substantial chunk of their savings) now fetched less of a real return after taxes, if they were to be sold.

 

   As is always the case these days with Narandra Modi and his government’s decisions – the same big question remained. Why?

 

   Why was the Prime Minister not sensitive to the views of a significant core of his supporters? Why did his advisors allow a budget that basically told the salaried middle class that it did not matter to be sent to Parliament? And did nobody think this through? Were there no discussions about the message this bill sent out?

 

"If you look at the massive budget allocations to Andhra, it is clear that Chandrababu has got at least some of what he wanted."

   Throughout the election campaign Rahul Gandhi portrayed Narendra Modi as a patron of the oligarchs, as the enabler of those who made fortunes by exploiting India’s natural resources and from the goodwill of the government. The Prime Minister did not work too hard to dispel this unflattering caricature. Instead first, his behaviour after the election and then, the measures in his budget have all added more weight to that charge.

 

   There is a second point to be noted. In the early days when Narendra Modi emerged as a national leader, his strongest supporters were young Indians. The evidence suggests that over the last decade or so, the generation that supported Modi has grown up and no longer counts as youth. But the evidence also suggests that the generation that followed does not necessarily see Modi as a harbinger of hope. Faced with unemployment and corruption, and unable to remember, after a decade of Modi’s governance, a time when he was not in charge, they have real concerns and grievances.

 

   The Congress targeted this segment at the last election. And even the BJP now concedes that its flippant approach to the subject (“Jobs? Why can’t they just make pakoras instead?”) was misconceived. The budget attempted to address the issue (perhaps by stealing from the Congress manifesto as Jairam Ramesh has alleged) but the measures announced do not seem to be enough to re-assure youth.

 

   Besides the strongest memory many young people will carry away will be of the mess the government has made of the NEET exams. When Rahul Gandhi suggested in parliament that the government was destroying the future of talented young Indians by corrupting the NEET process, the Education Minister fumbled and was unable to provide a satisfactory response. Nor could anyone else from the government.

 

   And third, there is the matter of the Prime Minister’s image as the all-powerful, benevolent leader. Once upon a time you would have expected the government to hurl goodies at Maharashtra where the BJP will soon face a crucial assembly election. But, in fact, Maharashtra has been mostly ignored in this budget. This may well be because the government no longer has the money to afford such benevolence.

 

   It has always been clear that the BJP regime will have to pay through its nose (well, more correctly: our noses, given that it is taxpayer’s money) to keep Chandrababu Naidu and Nitesh Kumar happy enough to support the government.

 

   If you look at the massive budget allocations to Andhra, it is clear that Chandrababu has got at least some of what he wanted. (There will be more demands, I am sure).

 

   It would be crass and unfair to refer to these allocations as protection money or ransom payments. But it is clear that when it comes to handing out allocations, the government is far from all-powerful. It stays in office only because it sends money to its allies.

 

   All Finance Ministers have multiple compulsions when they make a budget. No Finance Minister can satisfy everyone. And in any case, the direction of the budget usually comes from above, from the Prime Minister. Most of us understand this.

 

   And yet it is hard to escape the feeling that this budget too, like many of the decisions taken recently by this government, lacks the sure, shrewd touch previously displayed by the Modi regime. It errs grievously by neglecting the faithful and alienating the Prime Minister’s most dedicated supporters.

 

   If Narendra Modi wants to regain his old popularity he can only do so by putting money in people’s pockets and making their lives better. He can’t do it by letting his Chief Ministers encourage prejudice by forcing Muslim restaurant-owners to put their names on their doors so that Kunwarias know not to eat there. Those days are ending.

 

   Hate only gets you so far. Eventually, reality takes over.