The Modi imprint on the Budget

The stamp of Narendra Modi was imprinted on Arun Jaitley’s first full-fledged Budget, much in the manner that it was on that of Suresh Prabhu’s Railway Budget on Thursday. Modi’s pet projects and his vision for the country’s economic development ran like a leitmotif through the Finance Minister’s 100-minute speech.

Not surprisingly, the Budget placed a great deal of emphasis on the Prime Minister’s ‘Make in India’ drive, which he flagged off last September. Jaitley announced a clutch of measures that were aimed to nudge the country towards becoming a manufacturing hub.

The focus on fostering entrepreneurship was a recurring theme, even as Jaitley noted that a “major challenge is that manufacturing has declined from 18 per cent to 17 per cent of GDP…and manufacturing exports have remained stagnant at about 10 per cent of GDP.”

Saying that the ‘Make in India’ programme is about meeting this challenge and creating new jobs, Jaitley announced a package of incentives to stoke the manufacturing sector. These included a gradual reduction in corporate tax, from 30 per cent to 25 per cent, a slash in basic customs duty on 22 industrial inputs, a reduction in the tax on royalty and the removal of special additional duty on IT products – all aimed at encouraging manufacturing at home.

Like the Railway Budget, this one also had the feel of a vision document, the work of a government that knows it is here to stay for another four years and that it is dealing with an economy that is beginning to show signs of a revival.

Piggybacking on Modi’s reputation for execution, the budget laid down ambitious quantitative targets on housing-for-all, road connectivity and sanitation by 2022 — India’s 75th year of independence.

The support for business was accompanied by a slew of social and welfare measures — a balance that has come to represent Modi’s signature style. The Pradhan Mantri Jan Dhan Yojana got eight mentions in the speech, with the scheme getting credit for ‘bringing 12.5 crore families into the financial mainstream’, within 100 days.

Building on this success, the Budget has now promised to replicate the same model in order to deliver affordable insurance and lifelong pension to the under-privileged.

As one would have expected, Swachh Bharat Abhiyan, the pet project Modi flagged off last Gandhi Jayanti, which Jaitley described as a movement to regenerate India, found more than one mention.

Taking note of the 50 lakh toilets already constructed in 2014-15, Jaitley said that the target of 6 crore toilets would certainly be met. He made sure this initiative didn’t lack in funding either. Corporate contributions to the Swachh Bharat Kosh and the Clean Ganga project were granted a 100 per cent tax exemption. A 2 per cent Swachh Bharat cess has also been proposed on all service tax payments in future.

The budget steered clear of UPA-style populism by pruning fuel subsidies and promised to root out leakages. It made clear its intention of moving to direct transfers through the JAM trinity (Jan Dhan, Aadhaar, mobile numbers).

But Modi’s poll slogan of Sabka Saath, Sabka Vikas was kept in mind, with a slew of special benefits for girl children, the elderly, the under privileged and the disabled.

A social security net was promised for the 10.5 crore senior citizens, a MUDRA bank flagged off to fund micro enterprises run by SC/ST/OBC owners and the Sukanya Samridhhi scheme granted tax breaks.

Finally, as many as six new welfare schemes that made a debut this Budget were prefaced by the term ‘Pradhan Mantri’. So the Pradhan Mantri Jan Dhan Yojana has now been joined by Pradhan Mantri Krishi Sinchai Yojana, Krishi Vikas Yojana, Mudra Yojana, Suraksha Bima Yojana, Vidya Lakshmi Karyakram and Jeevan Jyoti Bima Yojana. How’s that for a brand statement?

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