Election on mind: Amid OPS push, bid to keep govt staff happy

Unimpressed Oppn says Budget has nothing for poor, unemployed

In a year when India would see nine state elections, followed by the general election in May next year, the 2023-24 Budget had something for all. However, the Opposition asserted that the Budget let down low-income and underprivileged families and did not take into account future challenges, including a slowdown in world trade, a global recession in 2023-24, and a deterioration in the security situation after the Russia-Ukraine war, which could affect the Indian economy fundamentally.

Senior citizens and those who are about to retire have reaped a rich harvest in the Budget. Following the electoral setback to the BJP in Himachal Pradesh, to which a big contributor was discontent with the new Pension Scheme, government servants and middle-class employees about to retire have swum back into the consciousness of the government. The doubling of the deposit limit for the popular Senior Citizens Savings Scheme from Rs 15 lakh to Rs 30 lakh would swell the small savings corpus but also ensure a steady and assured stream of money for the elderly.

When this is combined with the rejig in the income tax structure, the new regime means a saving of Rs 15,000 and above per month for pensioners. “What this means is that many, many pensioners will now walk free from any tax liability. It is mass appeasement,” said a former government servant, who had been part of the budget-making exercise in the past.

The government’s move of offering women from low-income families a savings scheme with a two-year tenure is also expected to get traction.

Although the Budget does not spell out the details, employment for youth via the Pradhan Mantri Kaushal Vikas Yojana 4.0 over the next three years is expected to address employment needs. A massive increase in outlays for rural housing under the PM Awas Yojana also promises electoral support.

But the Opposition was not impressed. Congress spokesman and former Finance Minister P Chidambaram said: “The FM has not mentioned the words unemployment, poverty, inequality, or equity anywhere in her speech. Mercifully, she mentioned the word poor twice in her speech. I am sure the people of India will take note of who are in the concerns of the government and who are not.”

Addressing a press conference, Chidambaram said: “No taxes have been reduced except for the small number who have opted for the new tax regime. No indirect taxes have been reduced. There is no cut in the cruel and irrational GST rates. There is no reduction in the prices of petrol, diesel, cement, fertilizers, etc. There is no cut in the numerous surcharges and cesses which are, anyway, not shared with state governments. Who has benefited from this Budget? Certainly, not the poor. Not the youth looking desperately for jobs. Not those who have been laid off. Not the bulk of taxpayers. Not the homemaker. Not the thinking Indians who are shocked by the growing inequality, the rise of the number of billionaires and the wealth being accumulated in the hands of the 1 per cent of the population."

The rest of the Opposition took up the refrain. “The complete collapse of MSMEs because of Covid led to extensive unemployment. The Budget does not have anything for such an important sector in our economy,” said Anil Desai, Rajya Sabha MP from the Shiv Sena. The Congress’ Nasir Hussain, Rajya Sabha MP from Karnataka, said: “I am from Karnataka and I am happy about the Rs 5000-crore grant to the Upper Bhadra project. But what about inflation? What about unemployment? What specific steps is the Budget going to address all the problems ordinary people face to earn a livelihood?

Chidambaram said the government must explain when both capital expenditure of the central government and effective capital expenditure are lower than the Budget Estimates, how India still grew at 7 per cent in the current year. “We know that private investment is down, exports are down and private consumption is stagnant,” he added. He also alleged, quoting budgetary outlays, that the government has not spent funds on existing schemes it claims to have spent.

Former bureaucrats who did not want to be named flagged two main problems with the Budget: One, the capacity of ministries like Railways to absorb such a massive capital allocation, which suggested that the government was running out of ideas for capital spending as road-building had reached a saturation point; and second, the higher cost of living because of the double whammy of high levels of personal taxes and the impact of GST. “The rationalisation of personal income tax was long overdue… and even this is not enough,” said a former bureaucrat. He added that a breather for the markets was that long-term and short-term capital gains tax was not touched. “We have to see how the government addresses that,” he said.