FROM OUR POLITICAL BUREAU. A Budget that’s not pro-poor enough

Congress president Sonia Gandhi’s characterisation of the Budget as “pro-corporate” has a decidedly pejorative connotation in political parlance. It is used routinely to paint anything concerning business as somehow unworthy of governments to associate with. Additionally, what both the Congress and the Left would like very much at this juncture is to add to the perception that the present government is not just “pro-corporate” but anti-poor as well.

This is, in essence, the big distinction that the Congress and its friends consistently make between the BJP’s laissez-faire, privatising/burning subsidies approach and their own supposedly pronounced commitment to the poor through enhanced focus on social services with public sector reforms, et al.

The government seems to have sensed the danger in the Opposition persisting with this line, given the pains with which the Finance Minister elaborated schemes in the Budget on social safety and poverty. This, according to him, is among the biggest takeaways from the Budget.

“It is time India thought of social safety for all,” he stressed, regaling the crowd with stories about funds meant to promote small businesses — a woman who sells boiled eggs by the wayside, another who markets artificial jewellery door-to-door. These are the “unfunded” that the FM wants to fund through the Micro Units Development Refinance Agency (Mudra) Bank.

And, while he will not admit it publicly, the stupendous political success of Arvind Kejriwal in reminding the urban poor of their lack of opportunities is decidedly the guiding spirit behind such initiatives.

But the number of such initiatives and the imagination to shield the Budget from the Opposition chorus of it being “anti-poor” is limited as compared to the macroeconomic measures taken to steer the economy towards growth. In this context, the PM’s contemptuous depiction of the UPA’s flagship MNREGA as a programme to “dig ditches” has not really come at an opportune time. He promised to “flog it” as an example of the Congress’ ineptitude in addressing rural poverty.

The Finance Minister is, of course, not given to such dramatic outbursts. So he simply told the Lok Sabha on Saturday that his government’s allocation to MNREGA is the “highest ever” since the legislation was enacted.

However, the increase in MNREGA funds, “if he has fiscal flexibility”, will be tested against the pro forma increase in the outlays every fiscal. Farmers have not exactly been rewarded as handsomely as one would have expected at a time when they are already suspicious and agitating over the Centre’s proposed amendments to the Land Acquisition Act. Even the allocations towards microirrigation fall short of the routine yearly increase towards this head.

Combined with the fact that the tax-free income is subjected to individual taxpayers availing of all the deductions and the increase in service tax that would hurt the middle class, the Budget is in danger of disappointing two critical sections of the populace — the middle class and the farmers. Notwithstanding the macroeconomic reforms and positive intent of the Finance Minister, it does not give the ruling party adequate ammunition to the charge being made — that the government is “pro-corporate” and, by implication, “anti-poor”.