This Budget should have been presented in 2018. But it does look as if the shadow of the electoral humiliation in Bihar looms large over the Modi regime. This was pretty much clear just a few minutes into the Arun Jaitley speech. It was all about farmers, agriculture, irrigation, rural roads, rural housing, digital literacy in Indian villages...Nothing wrong with all this. But finance ministers have been paying homage to rural India since decades. This budget mirrors those pious, political gestures. But sadly, there is neither a breakthrough related to agriculture in this budget, nor a clear road map on how to fix the agriculture crisis. Notice how Modi has been conducting farmer rallies across the country in recent weeks.
Even more worrying is the message being sent out by the Budget about the role of the state.
Take just one example. Jaitley announced that 2,500 "government shops" will provide drugs and medicines at subsidized rates. We all know what will eventually happen. The poor may or may not get the cheap medicines. But corruption will surely increase. Government hospitals have a commitment since the last five decades or so to provide cheap medicines. Almost all of it is siphoned off. How will the government t shops be different? Then there was the innovation of Dr B.R Ambedkar. The ministry of small and medium enterprises will now have a separate cell dedicated to encouraging Dalit entrepreneurs. Each bank branch in India will finance at least two Dalit and women entrepreneurs. Such schemes have existed since Indira Gandhi launched "Garibi Hatao".
We all know what happened to those schemes to encourage "educated" youth to launch their own small businesses. These initiatives do send a political message in the backdrop of the controversy raging over Rohith Vemula. But by no stretch of imagination can they be called transformational.
One positive message amidst this "more of the same" rhetoric has been a clear emphasis on infrastructure. Roads, highways, railways, ports and airports have been allocated substantially larger funds. The real multiplier effect of these massive investments in infrastructure projects will take a few years. But the impact will be dramatic. The only troubling thing even with these welcome initiatives is the reliance on the role of the state. For example, Jaitley proudly announced how there has been a dramatic improvement in the coal and power sectors. But the improvements have been achieved largely through managerial interventions. There is every chance of both coal and power sectors slipping back into crisis because there has been no real effort at "transforming" them.
In the Vajpayee era, three policy initiatives stood out and had a transformational impact. The first was the successful Golden Quadrilateral project that transformed Indian highways. The second was the change in telecom policy that moved from license fee payment to revenue sharing. That India now has more than 1 billion mobile phone subscribers is primarily because if that "bold" policy. The third was a consistent emphasis on disinvestment. One had hoped that the current Budget will unveil at least one such transformational initiative. The sad truth is that, it has not.
During the Lok Sabha election campaign, Modi had tantalized Indians with the power of empowerment over doles and pro poor rhetoric. The third Budget of his government is virtually back to politics as usual.
