Budget 2013: More politics than economics

Presenting the last budget of UPA, Chidambaram did not seem his real self; political priorities of his bosses dominated the two-hour speech


Ajay Singh | February 28, 2013

Finance minister P Chidambaram
File photo: PIB

The pre-election budgets used to have a familiar script which finance ministers rarely violated. P Chidambaram was no exception. In his nearly two-hour presentation, he seemed to be juggling with figures to suit political priorities of his bosses – Congress president Sonia Gandhi and prime minister Manmohan Singh.

He talked about enhancing the social spending to fulfil the promises made under several rights guaranteed by the government, of late. For instance, the increase in the education and the rural development sectors was too critical to be missed. But there is little doubt that it is too meagre to fulfil even a fraction of these assurances.

Apparently, the minimum employment rights and the right to education – guaranteed by enactment of the laws – still remain a mirage in view of the fact that the resources of the government fall too short to make even a cosmetic attempt to fulfil these promises. Yet his speech was high on rhetoric and low on substance. This was evident when he announced to earmark Rs 10,000 crore in addition to other subsidies for the right to food. Perhaps the amount is too little for the upkeep of even granaries maintained by the Food Corporation of India (FCI) which incurs heavy losses on account of wastage of foodgrains.

By all accounts, the entire exercise appears to be a case of overt tokenism tailored to address political concerns. The manner in which Chidambaram talked at length about the increase in the allocation for the SC/ST is only aimed at perpetuating the Congress’s pro-dalit image on the eve of elections and duck the anti-incumbency. Unsettled by a spate of corruption cases that beset the UPA government and the rising anger of the middle class in urban areas, the winning-over of the dalits into its fold is a good strategy.

But would it work? The answer would obviously determine the future political contours of the country.  However, there is a determined attempt to neutralise the anger of the middle class – by offering them sops like enhancing the exemption limits for house loans, tax credits and sundry benefits. Perhaps the anti-government mood reflected in a series of demonstrations in urban India ranging from Anna Hazare to the Delhi gangrape case would have prompted the FM to handle this constituency with care. This is the precise reason for him to set up the Nirbhaya fund with Rs 1,000 crore allocation for ensuring security and safety of women. How this would be utilised still remains in the realm of ambiguity.

Chidambaram seems to have realised the critical importance women played in the assembly elections of Bihar and Gujarat. Nitish Kumar won the attraction of the fair sex by giving them 50 per cent reservation in the local bodies. Similarly, Gujarat chief minister Narendra Modi won over the women by initiating empowerment programmes. Following in their footsteps, Chidambaram decided to set up an exclusive PSU bank run by women for the welfare of women. Personally he may have won their support but it is too early to surmise if it would translate into their support of his party too.

Rarely had a budget outlined its political priorities so obviously as this budget has. Chidambaram's three-way categorisation of people (women, youth and poor) was quite instructive in this regard. Having attended to women and youth, he turned towards the poor by saying "Aapka paisa aapke haath (your money in your hand)" – a phrase with a potential of turning into a political slogan in the coming elections. With this slogan in mind, he declared augmenting farmers' loans, extending health cover to the poor in urban areas and covering a large section of workers of the unorganised sector in the insurance scheme. Obviously, with the direct benefit transfer in place, Chidambaram seems to be kowtowing the line of his political boss, Sonia Gandhi, that the slogan "Aapka paise aapke haath" will be a game-changer in 2013 elections.

However, the most critical part of his budget began in the second part which assiduously tried to project him in the Robin Hood image of “taxing the rich to subsidise the poor”. He identified 49,800-odd taxpayers with over Rs 1 crore income to levy surcharges. Similarly, he enhanced the customs for those buying SUVs but allowed an escape route by exempting vehicles bought for the taxi services. Similarly, the enhancing of the service charges more for cigarettes and air-conditioned restaurants is clearly intended to give a socialist thrust to the budget. As he summed up the budget, Chiamaram appears more like a man possessed by “garabi hatao or aam aadmi” spirit of his party than his real-self. But such is the exigency of politics.



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