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Elections 2017: Foolish to postpone budget; five states don't make up all of India

The Opposition leaders are crying themselves hoarse about the Union Budget being presented on 1 February, just three days before the first phase of polling in Assembly elections across five states.

“It will provide an opportunity to the government to make populist announcements to influence voters,” lamented Congress leader Ghulam Nabi Azad in a letter to Chief Election Commissioner Nasim Zaidi.

On the face of it, Azad has hit the nail bang on its head. And there have been at least two precedents — in 2007 and 2012 — of Union Budgets being presented after the state elections. It’s precisely to stop governments from taking the populist route before elections that we have a "model code of conduct" that kicks in well in time. But there is a problem about the bogey being raised now against the budget’s timing. Neither Prime Minister Narendra Modi nor Finance Minister Arun Jaitley thought up the idea of advancing the budget from end-February to 1 February after the polls were announced to the Assemblies of Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur on Wednesday.

File image of Narendra Modi. PTI

File image of Narendra Modi. PTI

The government has been talking about it from 21 September last year. Economists have been raving about the advantages that the country would reap from an early budget.

Where have the Opposition leaders been all this while? Were they too busy attacking the government’s "surgical strikes" first on Pakistan and then on black money to find that Jaitley’s budget would come up around the time as state elections?

Having woken up late at this juncture, the Opposition leaders must remind themselves that Uttar Pradesh and four other states don’t make up India. They must also remember that this budget is for the whole of India and not for just the five states that will elect Assemblies between 4 February and 8 March.

To satisfy the Opposition, the Election Commission (EC) has no choice other than to ask the government to postpone the budget to 9 March or later. But the real question the EC must ask itself is whether all of India must be denied the immense benefits of an early budget — especially since the government has been harping on it for more than three months and since it’s being done for the first time — because of elections in a few states.

It’s true that the EC bans foundation-stone ceremonies and inaugurations of even previously approved projects once the election schedule is announced. But a Union Budget is not a government maternity home that should be stopped at this juncture. And the EC knows that it has been indeed making exceptions to the model code of conduct whenever the advantages to people outweighed the unfairness of populism.

It was first on 21 September last year that the government decided to advance the budget to "the first week of February".

It was on the very same day that the government "in principle" decided to do away with the old British legacy of having a separate Railway Budget.

Among other things, the government said on 21 September that presenting the budget earlier would help not only government departments but even companies and individuals to plan their spending and taxes better. February-end presentation of budget has so far meant that after the statutory Parliamentary clearance and Presidential notification, government departments begin spending as late as June.

Did anybody object?

Again on 26 October, Modi talked about it.

The prime minister said the Budget would be advanced by "about a month".

Did anybody object?

Then finally on 15 November 15, the government announced that the budget would be presented "on 1 February".

Did anybody object?

In fact, economists and others have been singing praises of the government’s move. To begin with, an early budget will provide ample time to pass the Finance Bill by March, so that expenditure can begin right from day one of the fiscal year. New tax proposals can come into effect earlier than in the past. Equally importantly, it will help states plan their own budgets better, because they will know what’s coming to them and what’s not.

File image of Arun Jaitley. PTI

File image of Arun Jaitley. PTI

Even if the Opposition was ignorant and not doing its job as it should be, there was a wink and a nudge from the government early on. In fact, while announcing the government’s decision on 21 September, Jaitley said that a final date for the budget would be decided keeping in mind the polling days.

And even on 26 October when Modi spoke about it, officials were quoted by the media as saying that the election schedule would be a consideration.

On their part, Modi and Jaitley must stop playing a cat-and-mouse game with the budget, and tell us clearly why they wanted to keep in mind the election dates earlier and why they are going ahead with it now, just three days before the first phase of polling. In the absence of honest communication, good intentions are susceptible to unhealthy interpretations. The famine of information that we faced in the case of demonetisation must not repeat itself.

As for Opposition leaders, the danger of a budget in the thick of elections is at last staring in their faces. It has dawned on them with a slowness that would put a snail to shame.

There is no doubt that the Opposition is pathetically bereft of issues. It gropes for an issue to talk about with the desperation of a sinking man in the sea trying to grab at any straw floating around him.

For the first time after Modi took reins in 2014, demonetisation presented itself as a god-sent opportunity for the anti-Modi brigade to haul him over the coals for all the misery he put the common man through. But the Opposition goofed up on the chance more than Modi botched up the execution of demonetisation. As if to make up for it, the leaders have made a sudden discovery about the timing of the budget.

Look at what CPM leader Sitaram Yechury has to say:

Yechury says a 1 February budget would present a "misleading" GDP growth because it would take into account only two quarters of the outgoing fiscal year. He is right, but he should have known it earlier.

But does Yechury really think that voters will care a fig about GDP statistics in deciding whom to vote? And since Yechury has time and again said that Modi has made a complete mess of India’s economy with demonetisation, what is he afraid of? One would expect Yechury to rest assured that Modi will lose the latest round of Assembly elections. Or does Yechury have indications to the contrary?

You can be reasonably certain now that if the government goes ahead with 1 February budget, the ugly spectre of Opposition derailing Parliament once again looms menacingly ahead.

The author tweets @sprasadindia

For full coverage of Union Budget 2017 click here.


Updated Date: Jan 14, 2017 21:18 PM

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