FM sends a post-poll signal

Finance Minister Nirmala Sitharaman on Thursday delivered a crisp interim budget that veered clear of outright populism but appeared designed to exude unshakable confidence that her party would return to power for a third term in just over four months’ time.

The FM’s shortest budget speech yet, at less than an hour long, was sprinkled with promises that the BJP pledged to redeem after – and not if – it won the Lok Sabha elections in April and May.

A Rs 1-lakh-crore fund for low or nil interest rate loans to spur private-sector innovation in hot new areas, a big housing scheme for the middle class and initiatives in green tech, tourism and women’s health, plus a decision to close old tax disputes, offset any disappointment that there were no income tax changes for the salaried classes, and stock markets ended broadly flat.

But the 56 minutes were marked more by attempts to bolster brand recall of Prime Minister Narendra Modi’s welfare schemes, and to redefine the conventional construct of social justice and secularism by underscoring “alternative governance models” used by Modi to achieve last-mile delivery through a so-called “saturation approach”.

“The saturation approach of covering all eligible people is the true and comprehensive achievement of social justice. This is secularism in action, reduces corruption, and prevents nepotism,” Sitharaman said in an apparent bid to counter Opposition charges that her party has deepened caste and religious fault lines.

The minister clearly outlined the target group for the BJP ahead of the polls, even dubbing it the four ‘castes’: Gareeb (poor), Yuva (youth), Anndata (farmers) and Nari (women), which neatly answer to the acronym of GYAN (knowledge).

This was echoed by Modi in a post- budget video message: “It (the budget) will empower all 4 pillars of Viksit Bharat: Yuva, Garib, Mahila and Kisan. This Budget gives the guarantee of making India a developed nation by 2047… the interim budget is inclusive and innovative. It has confidence of continuity.”

“We have also shown…who are we going to aim at when in July we come back to present the budget,” the FM told media later in the day.

Sitharaman stuck to fiscal conservatism, a hallmark of the Modi years, and pegged the fiscal deficit target at 5.1% of nominal GDP for the coming fiscal year (2024-25), lower than a revised 5.8% for the current year.

She also lowered the government’s gross borrowing target by 8% to Rs 14.13 lakh crore, which means that the private sector will finally get room to borrow but will have to pull its weight in investment and infrastructure creation because the government expects to spend 11% higher on infrastructure next year, a lower-than-usual increase.

Ultimately, the interim budget represented a signalling of intent, a tantalising glimpse of what ‘rewards’ India can expect if it votes Modi to power again.

It spoke of a BJP that is almost cocky after its recent Assembly election wins, and one that can afford to boast of its achievements rather
than dole out largesse for votes.