Budget 2018: As Arun Jaitley prepares for what is his last hurrah with the Union Budget before 2019 elections, two questions are on everyone's mind - Will the surprise factor return in Budget 2018? And, will it help Narendra Modi?
If one thing the Narendra Modi government may successfully claim credit for in the last four years, it has almost ended elements of surprise, curiosity, shock and awe that used to mark the days preceding Union Budgets in previous governments. Take for instance Union Finance Minister Arun Jaitley’s last Budget presentation in the Parliament. It was dull, on the expected lines and came days after Prime Minister Modi had already delivered his famous New Year’s Eve speech, which was dubbed by many analysts as a “mini-Budget”. The speech became more famous as Modi surprised his admirers by not using the word “Mitron” in the address to the nation. One more issue that restricted the Union government from announcing any surprise sops was the upcoming Assembly elections in five states.
Budgets are not made in a day. It is anyone’s conclusion that what Jaitley delivered through his speech in 2017 was well thought out in advance and synchronized with the so-called “mini-Budget” speech of Modi that was made after the completion of 50 days of Demonetisation.
As Arun Jaitley prepares for what is his last hurrah with the Union Budget before 2019 elections, two questions are on everyone’s mind – Will the surprise factor return in Budget 2018? And, will Budget 2018 help Narendra Modi in General Elections 2019?
The return of surprise factor, for the general public, would mean the announcement of sops, tax rebates etc. However, after the GST rollout last year, much of the “surprise factor” is gone. Jaitley may still spring a surprise with income tax and corporate tax limits.
Secondly, in the last four years, Modi government has given primacy to fiscal prudence. Hence it is highly unlikely that Budget 2018 will have any big bang vote-catching element, especially when the government has already announced some big investment decisions like bank recapitalization, infrastructure spends etc.
Coming to the second question: Will Budget 2018 help Narendra Modi in General Elections 2019? We all know that Budget 2019 will be an interim Budget ahead of the next Lok Sabha elections. So, it will contain essential standard statements of expenditures and revenue. To effectively answer the second question, we need to find an answer to another question – that is: Do people really vote after reading budget announcements? Or, do voters really get influenced by Budget promises?
The general understanding is that people are influenced by the effective implementation of what that has already been announced in previous years. Modi government will be taken to task in 2019 if people are convinced that it has failed in implementing what it announced earlier. So, if the Centre has failed in implementing previous announcements, it is unlikely it can do so by announcing something big in this Budget, just a year before next Lok Sabha elections.
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India is a data-starved country, literally. As Niti Aayog member and Prime Minister’s economic advisor Bibek Debroy said in an article for Financial Express in the wake of Demonetisation, “Many problems with policy-making in India stem from paucity of data, understandable for an economy that is largely self-employed, informal/unorganised and even rural.”
Debroy went on to say, ” Indeed, the present National Statistical Commission is examining ways to revamp India’s statistical system. Sometimes, there are holes in data. Sometimes, there are time-lags.”
The way people will vote in 2019 will be different from previous General Elections. For the first time, most of the voters would in the category of “youth” who would vote after experiencing five-years of a majority government and a “strong” leader in Narendra Modi. In 2019, it is highly likely that people will vote for the “leader” and not just a party or an ideology. It can be said with the benefit of the hindsight of the last few Assembly elections.
Some examples: In Delhi 2015, Arvind Kejriwal was the clear leader. Similarly, in Bihar 2015 and Punjab 2017, Nitish Kumar of JD(U) and Amarinder Singh of Congress were the “only” prominent leaders of their respective states. Interestingly, in states where there was no the presence of strong leaders, or where there were doubts, like in Uttar Pradesh where Akhilesh Yadav was fighting a bitter family feud, people mostly voted in the name of Narendra Modi – the Prime Minister.
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The next Lok Sabha Elections, hence, would be most likely a contest between Narendra Modi and Congress president Rahul Gandhi. People will judge their leadership credentials. No doubt, many other issues will play in the background of voters’ mind, but by then Budget 2018 would be just another annual statement of revenue and expenditure.