An “Account for Vote” Budget

The Union Government’s interim budget was placed by the acting Finance Minister Piyush Goel in Parliament on Friday. The most remarkable feature of this budget is that a series of tax exemptions and other sops have been announced, especially for the salaried middle class and farmers. These will reduce the revenue of the Government. But Goel has not – he could not have – indicated the sources from which these revenue losses will be made up for. He could not do it because that would have meant making tax proposals which he could not do. But the net result of this is that he has passed on a huge liability for the next government which may not be headed by Narendra Modi and his team.
There is a conscious effort, in an election year, to keep the educated, salaried and articulate urban middle class in good humour. There will be no tax on an annual income of Rs. 5 lakh. This, Goel claimed, will benefit about three crore people. Assuming India’s population to be 130 crore, three crore is just 2.3 per cent of the population. The thunderous cheers that greeted the Finance Minister’s declaration to this effect shows the dominance of the middle class in our politics. But to figure out the actual benefit of Rs. 5 lakh exemption, one has to depress it by the net depreciation of the rupee due to inflation during the five years of the Modi rule. This figure, like many other figures, is just not available.
The other notable sop is a direct cash benefit of Rs. 6000 per year, for the marginal farmer owning less than two acres of land. This works out at Rs. 17 per day. Congress President Rahul Gandhi has called it an ‘insult’ to the farmers. Few will disagree with him. The defence budget has been raised substantially at over Rs. 3 lakh crore but there are no details as to what percentage of this will go to meet the pay and pension bill and how much money will be available for building and acquiring military hardware and for technological upgradation.  The round figure of defence allocation does not indicate the military preparedness of the country to meet the twin threats it faces from the west and the north. This budget, as Congress leader Mallikarjun Kharge has said is, indeed, not a “vote on account” budget but an “account for vote” budget or, in ex-Finance Minister P. Chidambaram’s words, “a poll manifesto budget.” Indeed.

Friday, 1 February, 2019