Budget 2017: Jaitley’s gift-wrapped ‘jumla’ for poll-bound states

A veteran and wise politician would say there was no way a Union Budget could keep both the poor and the rich happy. If the budget tried to please the poor, it had to hit the rich hard; while if it was designed to keep the rich happy, the poor and the farmers were certain to be the losers.

But Finance Minister Arun Jaitley appears to have done the impossible. He has, by some accounts, presented a pro-poor budget which has made the rich very happy!

It is amusing to see Budget 2017 being described as pro-poor, pro-farmer and pro-corporate at the same time. The share market reacted favourably to the ‘pro-poor’ budget and rallied. And industry bodies and chambers of commerce fell over each other to hail the budget. Would they have done so if the budget had indeed been directed against the rich and corporate bodies?

What is far more likely is that Prime Minister Narendra Modi has again missed a chance to punish the ‘rich’ with black money and bank accounts in tax havens.

The FM and the BJP are making much of the relaxation in Income Tax granted to people earning up to nearly ₹50,000 a month and who pay income tax—who constitute less than 1% of the country’s population.

In Uttar Pradesh, however, officially (as reported by the erstwhile Planning Commission), 29.4% people live under the poverty line. So at least these 30% of the population would not have been impressed by the relaxation in Income Tax offered by Mr Jaitley.

Yes, UP and Punjab have a large number of MSMEs, which also got some tax relief, but they are so badly hit by demonetisation at the moment that they are in no position to calculate how much money they would save under new budgetary provisions. At the moment, they are only concerned with the losses and trying to find a way to regain some momentum.

One may argue that in Punjab and Goa, the poverty levels are not so high, but the issues of concern to voters are also quite different in these two states. In Punjab, farmers are looking to get a better price for their crops. The budget talks about doubling farmer’s income by 2020, but doesn’t say how this goal can or will be achieved. With most experts pronouncing this a pipe dream, would farmers trust the BJP government and fall for a carrot that looks out of their reach?

But then the experts hailing the budget as pro-poor, pro-farmer and pro-small business could well be right. Because the budget has been designed and wrapped carefully with the aim of looking like a gift. After all, it’s a pre-poll budget. And if presenting an impressive looking budget was the sole purpose, then Prime Minister Narendra Modi can certainly give full marks to Arun Jaitley for accomplishing the mission.

But will this budget enthuse voters who were left frustrated after the abrupt demonetisation of high denomination currency notes on November 8, 2016? The poor, the farmers, migrant labour and small-scale industry workers and owners are the worst hit by the demonetisation drive. Some of them may have believed the PM when he claimed that it was rich people with black money who would suffer most. But the government is silent about how much of the demonetised currency notes—leave alone the black portion—have been deposited. There is a growing suspicion that most black money held in cash has been successfully laundered post-November 8, meaning it is the common man who has in fact suffered the most.

Even more importantly, in 2014 voters trusted someone who was selling dreams of ‘achche din’, promising to put ₹15 lakh in each Indian’s account after bringing back black money stashed abroad, and holding out the promise that all the corrupt would go to jail. But now, two and a half years later, voters know better. That someone’s lieutenant Amit Shah has helped them to understand that there is a difference between a promise to be taken at its word, and a ‘jumla’. Perhaps they will see that the ‘pro-poor’, ‘pro-farmer’ budget is also just another nicely gift-wrapped ‘jumla’!