While Finance Minister Arun Jaitley’s third budget took a few unexpected course corrections, it continued with the past trajectories. Budget 2016 is largely supported by four policy and strategic pillars. First, the focus henceforth will be on development, with the hope that growth will follow because of spending in key areas. Second, it continued with the creation of ‘economic vote banks’, which are based on socio-economic classes, not social hierarchies. Third, it attempted to replicate the Gujarat Model on the national stage. Finally, he sought to ‘economically’ manage the controversies that this government was embroiled in over the past few months.
As Jaitley said in his speech, “The priority of our Government is clearly to provide additional resources for vulnerable sections, rural areas and social and physical infrastructure creation.” Five of the nine ‘distinct’ agendas that he spelt out as a part of “Transform India” vision focussed on development – agriculture and farmers’ welfare; rural sector; social sector including healthcare; education, skill and jobs creation; and infrastructure and investment. The idea behind this idea is that if the government can spend its money on crucial development sector, and ring in ‘Development for All’, growth will automatically follow. In fact, just before Jaitley delivered his speech, his key officials claimed that this Budget will be oriented on ‘Vikas’.
Ever since Prime Minister Narendra Modi assumed power, he and his team have tried to create vote banks, which are not based on castes and communities, but on socio-economic classes. For example, the opening up of bank accounts, and allied cheap insurance cover, was to woo the lower classes in urban and rural areas. Similarly, the ambitious toilets-building plan was to woo younger and older women. This objective has continued this year – farmers’ income to be doubled in five years, huge grant-in-aid of Rs 287,000 crore to panchayats and municipalities, provident fund contribution from the government to woo unorganized labor, and subsidised LPG in chullah-homes to woo women.
Several measures aim to superimpose Modi’s Gujarat Model across India. These include the initiatives for irrigation, rural electrification, improved quality in schools, and connectivity. One of Modi’s biggest achievement in Gujarat was road and railway connectivity. This was also the dream of former PM, Atal Bihari Vajpayee. Thus, the country will spend a total of over Rs 97,000 crore on roads and highways, and including the expenses announced by the Railways minister a few days, the total budget for the transport sector will be Rs 218,000 crore in 2016-17.
For the first time in recent history, a finance minister used the Budget document to counter the political and social criticism against the government. So, people said that this regime was pro-Big Business, and anti-small business and farmers. Jaitley came up with a vision which was skewed towards small and medium businesses, farmers, poor and rural population. People said that this government didn’t allow dissent. The finance minister announced the Ek Bharat Shreshtha Bharat, which will “connect people through exchanges in areas of language, trade, culture, travel and tourism.” Critics said that NDA-2 was against higher education institutions; Jaitley announced that he would fund 10 private and 10 public institutions to make them world class.