Finance Minister P Chidambaram on his way to present the Union Budget 2013. Photo: Shailendra Pandey
Yet another budget, yet another highly predictable tamasha. Even as Chidambaram was speaking, TV Channels had already taken off with their captioned mourning dotted with quotes from the “middle class aam aadmi”. I will leave the merits of the budgets to better experts, but what I saw of the people was less than graceful.
My first impression of the media cacophony was that it seemed highly organised. Almost all channels were saying almost the same thing. Mainly:
- No relief for the middle class (other than a piddly little two thousand or so for incomes under 5 lakhs)
- Taxes gone up on things the middle class needs – AC restaurants, mobile phones imported cars and what not.
In other words, this was a disappointing budget.
My default suspicious nature meant that when a conclusion was pushed this early on into the situation and so comprehensively, the urgent question was what else is there.
I found myself vaguely disappointed that very little was said about the significance of the budget for the lower classes – which actually form the vast majority of India’s population. There was less than nothing said about the super rich as in the really super rich. Not the 1 crore guys, but as Shekhar Kapur put it, the 1000 crore guys. This is one cat we never touch. Let alone bell.
There seemed to be vague noises about “pandering” to populist sentiments, an “election budget” etc, but frankly, the amounts did not seem unreasonably inflated considering inflation. The budget presented amounts that got trimmed down quite drastically, I think.
For example, these values are highly unlikely to be “pandering to the masses”
- Agriculture and Allied Activities got 16,194 crores in previous budget, but 15,971 in this one.
- Irrigation and Flood Control got 506 crores in previous budget, and 428 in this one
- Rural Development got 47,471 crores in previous budget, but 43,704 in this one.
- Ministry of Tribal Affairs came down from 1562 crores to 1427 crores
- Ministry of Rural Development came down from 66,638 crores to 55,000 crores.
In each of these cases, the budgeted amounts were more than the previous year’s amounts, but the revised amounts were less. Some of these areas can be considered to be crisis situations. We have drought like conditions and issues with water in many parts of the country. Agriculture and manufacturing sectors have not been able to add any jobs since 1995… so this is most certainly not an election budget in the sense of depriving the middle classes to spend on the vote banks, but I’ll leave it to the opposition to find a way to interpret this to taste.
What was shocking was the idea that people earning over 5 lakh rupees a year are middle class (and thus middle class is not helped by this budget). An income over 5 lakh a year is over 42 thousand rupees a month. This amounts to more than 1366 rupees per day and is about 40 times our poverty line and hardly a symptom of middle class – generally understood to be living with modest means and barely covering essentials. To imagine this bracket as somehow harmed by this budget is beyond bizarre and it was quite astonishing to see the debates fixate on it.
I lack the understanding to analyze a budget with any authority, but it seems to me that the larger problem is one of priorities and implementation. With the amount of money wasted, lost, badly used, what the budget says is hardly going to matter more than which department or ministry gets to misuse it. What is more necessary is using it wisely, which is something today gives me no idea about.
There is also a need for a national level dialogue that establishes the needs of the nation correctly and is transparent and unapologetic about putting needs assessed as more grave as priorities, so that the “expectations” of what a budget must do for people are more rational and there is a sense of India rather than seeking advantages for “people like us”.
There is also a need to be absolutely clear that paying tax is not the same as paying a bribe and that a citizen being a tax payer does not mean that his needs are more important than those not paying tax. There is also a need to see that income tax is not the only tax people pay, and everyone from the richest to the poorest end up paying tax when they purchase goods or property or travel and so on.
Without this sense of the budget being about how India’s money gets spent to India’s holistic growth, the conversations around the budget are sounding very like a lottery, or at best a class that is deeply suspicious of a teacher playing favorites.
