Aside from what it had on offer on the taxation rejig, much attention of the Budget presented on Tuesday was directed on its promises for two critical allies — Janata Dal (United) and Telugu Desam Party (TDP), which are in power in Bihar and Andhra Pradesh respectively. This is because the Bharatiya Janata Party (BJP) government is in a coalition this time, and the two parties have been seeking special category status for their states for a while.
A day prior to the Budget was unveiled, the finance ministry ruled out a special status for Bihar. On its part, the TDP, which had walked out of the BJP-led National Democratic Alliance in 2018 over denial of the status, refrained from reiterating the demand this time. In this context, the government’s decision to announce a special package for the entire eastern region including three other states — Jharkhand, West Bengal, and Odisha — sends a positive signal of addressing wider stakeholders and not being persuaded by coalition compulsions alone.
Going by purely geographic definitions, among the five states, Andhra Pradesh is an outlier as it is a part of the southern region. Nevertheless, these states have been promised all-round development under the scheme termed as Purvodaya. It would be formulated to encompass human resource development, infrastructure, and generation of economic opportunities, according to finance minister Nirmala Sitharaman. For Bihar, the minister announced to sanction `58,000 crore in the Budget, of which a sizeable allocation is for road projects, including a bridge over the Ganga, apart from flood control structures, and a new power plant. On the other hand, in Andhra Pradesh, the government has promised financial support of `15,000 crore for the capital, Amaravati, and funds for promoting industrial development and projects and assisting industrial corridors linking with neighbouring Karnataka and Tamil Nadu.
Modi had spoken about the idea of “Purvodaya” way back in 2015 while dedicating a refinery in Odisha. And in January 2020, Union minister Dharmendra Pradhan inaugurated the Purvodaya: Accelerated Development of Eastern Region in Kolkata, which was centred around the creation of an integrated steel hub covering northern Andhra Pradesh and the other four states in question. The concept, therefore, is not new. Pradhan has earlier identified petroleum, apart from steel, as a critical sector to drive the mission. As Sitharaman mentioned in her Budget speech on Tuesday, the region is rich in natural resources. It also includes a majority of the states, particularly long neglected tribal heartlands, hit by left-wing extremism. So it is vital to design and implement plans that can drive socioeconomic development of a backward belt.
Taken together, the projects planned earlier for Purvodaya and the promises for Bihar and Andhra Pradesh in this Budget represent a larger region and the potential benefits would accrue to beneficiaries beyond the five states. Modi, whose vision of development is influenced to a great extent by the East Asian miracle economies such as Japan and South Korea, has focused on infrastructure creation and this has been reflected in the policies of the government in the past decade. It is also true for the special package announced for the eastern states. The government should now map out a plan that caters to the specific needs of every state. The states, in turn, must see to their implementation to ensure the promises do not remain on paper or get reduced to sops.