If one goes by Arun Jaitley's budget speech utterances, it can safely be assumed that “politics makes the finance minister”. Contrary to his suave and urbane image, Jaitley devoted a substantial part of his speech to the government’s attempt to fix rural distress.
And what is the origin of this term “rural distress”? As recently as six months ago, the government had ignored the existence of such a phrase. Buoyed by fantastic success in the 2014 Lok Sabha polls, the government was accused of consistently ignoring disturbing trends emanating from rural India. But the BJP’s humiliating drubbing in the Bihar election seems to have impelled the party to recast its strategy.
With UP elections coming up, the budget speech by Jaitley presents a plethora of promises which will turn rural Indian into a promised land of prosperity. Take for instance his decision to earmark Rs 15,000 crore to bail out farmers trapped by debt. There is incentive for pulse production and procurement. Outlay for MGNREGA, which was described by Prime Minister Narendra Modi as a monument of the UPA government’s failure has been augmented with aplomb. Rs 2.78 lakh crore has been allocated for gram panchayats and municipal corporations to grant them the financial autonomy so they may evolve their own developmental plan.
Similarly there will be an attempt to create 300-odd rurban (rural-urban) centres across the country to win over the neo-middle class, a section that lent its full weight to Modi, propping him up as the most powerful leader of the country. Jaitley declared that as on 23 February, 5,542 of 18,500 villages without power have been provided electricity. Most of these villages are in Bihar and Uttar Pradesh.
There is large allocation of infrastructure development in the transport sector (including railways, and roads in urban and rural areas) to the tune of Rs 2.18 lakh crores to promote growth and easy transport to the poor and middle-class. AS has been the norm, the finance minister talked about demographic advantage and promised to develop skill centres to pave the way for economic prosperity. The government has deliberately avoided committing itself to a target of achieving fiscal deficit in order to have funds with which to play.
It appears there is nothing in the budget to fault. Except politics. Take for example the government’s overt disposition to a socialist agenda, which comes at a time when a famine is lurking in Delhi’s backyard - Bundelkhand. Hundreds of people in the benighted region are reported to have perished because of non-availability of food-grains and basic facilities. In this region, the Centre is seen no less culpable than the Akhilesh Yadav government in UP for allowing such a frightening situation to develop.
Similarly in west UP and east UP where payment of sugarcane prices is still a burning issue, the region is apparently in ferment and turning against the BJP. Though Jaitley came out with an ambitious project of digitising Agricultural Produce Market Committees (APMC) and doing away with rules that prohibit transfer of agriculture produce, it will take long fir these steps to bear fruit. Similarly in eastern UP, which is contiguous to Bihar geographically, with uncanny similarity in social composition, rural distress is quite evident on account of successive monsoon failures. The region is already backward as it lacks industrialisation and urbanisation as compared to west UP.
There is no doubt that that the budget outlines the political priorities of the government. Jaitley cannot be oblivious to the fact that his party’s politics would be adrift if the issue of “rural distress” were not addressed in this document. Given the fact that UP is largely a rural economy, this budget is more focused on addressing the electorate in UP. This was true of the Railway Budget in which nearly 35 per cent of the newly commissioned projects were allocated to UP.
Since UP is the flavor of the political season, can Jaitley be faulted for this? I hope not. If one jogs the memory a bit and recounts the days after the Nirbhaya episode that generated much heat and dust, the then finance minister P Chidamabaram declared that he would set up a Rs 1,000 crore “nirbhaya-fund”. That fund remained largely unused. Now, with the times changing, this is not even mentioned. This proves beyond doubt that “politics maketh the finance minister”.