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‘Interim’ only in name, an Election Budget in offing; may leave a massive burden for next govt

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6 years ago

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‘Interim’ only in name, an Election Budget in offing; may leave a massive burden for next govt

[vc_row][vc_column][vc_column_text]What many have been speculating has been given added credence by Finance Minister Arun Jaitley: that the interim budget – an outgoing government presents only a vote on account rather than a full-fledged budget – would be much more than that.

It would be an Election Budget and it may make the previous budgets under Narendra Modi government look like interim budgets. The measures planned by the government are likely to leave the successor government with a bill of over Rs 1 lakh crore, according to a report in The Economic Times (ET).

Speaking at CNBC-TV18’s Indian Business Leader Awards on Thursday, Jan 17, Jaitley, via video conference, said the government could break with convention and make the February 1 exercise more significant than a vote on account.

There is speculation that the government is studying various options, including a cash handout for farmers, to ease their distress and to shore up popular support before the national election that’s due by May. The government has already exceeded its budget deficit targets in October.

Jaitley, while dismissing fears that he is under pressure to present a populist budget after the recent election debacle in three states and ahead of general elections in April-May, ended up confirming the government’s worry and nervousness.

Jaitley said: “The NDA (National Democratic Alliance) government had been in this game for far too long to have nervousness about the budget. We are confident and proud of our performance over the last five years. The NDA government has succeeded in restoring the credibility of the economy and its decision making process over last few years”

In a regime that tends to equate ‘nation’ and ‘nationalism’ with itself, Jaitley said, “Convention has always been that election year Budget is an interim Budget. The larger interest of the nation dictates what will be a part of the interim Budget.”

“If we look at the big picture there have been successes that we have seen in the last few years. There have also been challenges. Therefore, without getting into the specifics, because that would really be disclosing the mind with which we are working, some of those challenges cannot afford to wait,” Jaitley said.

The government has recently announced a series of measures to try to win over farmers, small business owners and the less well-off, after the BJP suffered setbacks in state elections and with a general election due in months.

The measures are likely to be a drain on finances when Modi government is trying to stick to a decade-low fiscal deficit target of 3.3 per cent of the gross domestic product (GDP).

It has, however, promised even more perks ahead of the general election due by May.

“They will be for development, they will be for transformation,” Union Law Minister Ravi Shankar Prasad had said in Parliament, saying people should more “sixes during the slog overs”. Translated, it means more inducements for the electorate when elections are near.

Media reports suggest that the Centre is considering various options to address the agricultural distress in the country, one of them is cash handout for farmers. The deliberation over this began after the BJP was voted out in three key state elections in December.

If the government is planning to extend any relief to the farmers, it will impact India’s fiscal deficit which has already reached 114.8 percent of the budgeted target in November. Experts say that the government may not be able to stick to its deficit target this year.

In recent weeks, there has also been buzz of tax cuts for the middle class and other measures in the government’s economic statement ahead of Lok Sabha polls.

The FM said that the government will try to stick to its path of fiscal prudence, but he also added that in “unusual situations”, a deviation from the fiscal consolidation path might be required, which was understood by the markets and analysts.

Talking about the urgent need to uplift the farm sector, Jaitley said, “Whether it is a situation like a natural calamity or a drought or stress in a particular sector — these are all areas which cannot be considered any kind of populist expenditure. Markets will never understand if you act for the sake of populism,” he said. “But if it is in the larger interest because of a compelling situation that develops, I think then it is a rational, logical thing, which markets will also understand,” he added.

Asked on a reduction in interest rates amid slowing inflation, Jaitley suggested there was need for RBI to pare policy rates without making an explicit comment. “We can’t have real interest rates (after budgeting for inflation) higher than anywhere in the world,” he said, adding that the central bank has begun consultations with stakeholders.

What Jaitley said needs to be seen in context of statements of Ravi Shankar Prasad and some others, and the Modi government may make a short-term gain politically but may be disastrous for the economy.

A report in the ET said the vote-catching measures planned by Modi as he braces for a difficult general election may cost more than Rs 1 lakh crore which would have to be borne by the government that will take charge after the election due by May.

The spending is also likely to delay plans to reduce the government’s budget deficit, a key indicator of the nation’s economic health.

Jaitley talked of the need for fiscal prudence but kept an escape route open for “unusual situations”. The BJP’s economic affairs spokesman, Gopal Krishna Agarwal, told Reuters this week that the party does not consider the finance ministry’s plan to keep the fiscal deficit to 3.3 percent of gross domestic product in the current April-March fiscal year as “sacrosanct”.

“Addressing farmer distress is the most important thing,” Agarwal told Reuters. “You need an expansionary policy. You chase growth in the economy, you do not chase these parameters like fiscal deficit.”[/vc_column_text][/vc_column][/vc_row]

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BJP says it stands for credibility of promises under PM Modi, Congress for crisis

Trivedi mockingly questioned whether Kharge was truthful in his statements made the previous day, implying that his critiques of the BJP were a reaction driven by pressure to reconcile his earlier remarks.

Published

3 weeks ago

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November 2, 2024

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The BJP said on Saturday that it stood for the credibility of promises made under Prime Minister Narendra Modi’s leadership, while labeling the Congress party as one suffering from a crisis of credibility, intensifying their ongoing rhetorical conflict over unfulfilled electoral pledges.

BJP spokesperson Sudhanshu Trivedi said that the ruling party has expanded its welfare initiatives, including health insurance, free food grains, and cash transfers to farmers, emphasising a strategy focused on wealth creation followed by equitable distribution as the Indian economy has grown over the last decade.

“We believe in the creation of wealth and its distribution. The Congress fosters corruption and depletes wealth,” he stated, referencing numerous unfulfilled promises made by Congress-led governments across various states.

Following Mallikarjun Kharge’s remark labeling “Modi ki guarantee” as a cruel joke after Modi seized Kharge’s guidance on budgetary constraints in state poll announcements, the BJP launched new accusations.

Trivedi mockingly questioned whether Kharge was truthful in his statements made the previous day, implying that his critiques of the BJP were a reaction driven by pressure to reconcile his earlier remarks.

Trivedi highlighted several accomplishments of the Modi government, including the construction of the Ram temple, the abrogation of Article 370, the building of over 14 crore homes for the impoverished, the establishment of more than 51 crore Jan Dhan accounts, and a firm stance against terrorism from Pakistan, to demonstrate the government’s fulfillment of its commitments.

He noted that Kharge, having witnessed notable leaders like PV Narasimha Rao and Pranab Mukherjee manage economic challenges effectively, is now observing the Congress party struggling under the influence of urban Naxals due to Leader of Opposition in the Lok Sabha Rahul Gandhi.

Addressing Kharge’s criticisms on various issues, Trivedi pointed to data from the Employees’ Provident Fund Organisation (EPFO) indicating a rise in account holders from 11 crore to 25 crore over the past decade.

He also referenced significant infrastructure projects, such as the construction of homes for the poor, 74 new airports, and an impressive pace of 37 kilometers of road built per day, claiming that these initiatives have created substantial employment opportunities.

“India is now ranked third in auto manufacturing and second in mobile phone manufacturing; if anyone is unable to recognize the country’s progress, there is a profound deficiency in their perspective,” asserted the BJP spokesperson.

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Maharashtra elections: Congress says Mahayuti understands its exit is certain

Congress leader Sachin Pilot, also an observer of the Congress party for the Maharashtra elections, said that the ruling Mahayuti alliance is aware that its exit is imminent.      

Published

4 weeks ago

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October 30, 2024

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The Congress on Wednesday asserted the ruling Mahayuti government in Maharashtra has understood that its exit is certain as the Maha Vikas Aghadi alliance is strong and that all its candidates are in a strong position for the upcoming Assembly elections in the state.

Congress leader Sachin Pilot, also an observer of the Congress party for the Maharashtra elections, said that the ruling Mahayuti alliance is aware that its exit is imminent.      

The Congress leader stated that the party is fully prepared and that its ally parties in Maharashtra are strong. He mentioned that the seat-sharing negotiations occurred in a positive atmosphere and that the ruling party has recognized that their exit is inevitable.

“All the candidates of the Maha Vikas Aghadi (MVA) are in a strong position. The people here have decided to support Congress and its allies in the upcoming Assembly elections,” he said.

He also noted that the alliance’s performance in the recent Lok Sabha elections was impressive. “Wherever Congress contested, our candidates won 80 percent of the seats. We expect this trend to continue,” he added.

Pilot acknowledged that there have been some differences among party members regarding specific seats but assured that those issues would be resolved in the next 2-3 days, ensuring there would be only one candidate from the MVA for each seat.

Earlier in the day, Ramesh Chennithala, Congress in charge of Maharashtra, slammed the BJP, claiming that the party is undermining its alliances in the state.

“The BJP is dismantling its alliances. They are forcefully converting alliance partner candidates into their own party candidates. The people will respond to this,” he stated while speaking to reporters.

Earlier on October 26, Chennithala alleged that crores of rupees have been reportedly offered to two of its MLAs to join Maharashtra Deputy Chief Minister Ajit Pawar-led NCP faction, ahead of state Assembly elections.

Chennithala made those allegations while speaking to reporters in the national capital. He also questioned the Maharashtra Chief Minister Eknath Shinde.

Voting for all 288 constituencies for the Maharashtra Assembly elections are set for November 20 and counting on November 23. In the 2019 Assembly elections, the BJP won 105 seats, the Shiv Sena 56, and the Congress 44. In 2014, the BJP secured 122 seats, the Shiv Sena 63, and the Congress 42.

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Rahul Gandhi not upset, Opposition spreading fake news: NCP (SP) leader Anil Deshmukh

“Opposition parties are spreading false information. It is not true that Rahul Gandhi is upset with leaders in the State,” he said.

Published

4 weeks ago

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October 26, 2024

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Asserting that Leader of Opposition in the Lok Sabha and Congress leader Rahul Gandhi was not upset with the Maharashtra unit, NCP (SP) leader Anil Deshmukh on Saturday accused the Mahayuti of spreading fake news over the issue of seat-sharing in the state.

Deshmukh mentioned that meetings between leaders of Congress in Maharashtra, including Balasaheb Thorat, Nana Patole, and Vijay Wadettiwar, and representatives of NCP (SP) and Shiv Sena (UBT), went well.

“Rahul Gandhi is not upset. Leaders like Balasaheb Thorat, Nana Patole and Vijay Wadettiwar all had meetings with leaders of NCP-SCP and Shiv Sena (UBT). We had taken the decision regarding seat sharing based on merit,” the NCP(SP) leader said.

He further clarified that the decision on seat sharing was made based on merit, countering the false information being spread by Opposition parties. Deshmukh also dispelled the notion that Rahul Gandhi was upset with the state leaders.

“Opposition parties are spreading false information. It is not true that Rahul Gandhi is upset with leaders in the State,” he said.

Furthermore, in preparation for the upcoming Assembly polls in Maharashtra, Congress released its second list of 23 candidates on Saturday.

The Maha Vikas Aghadi (MVA) has concluded talks on sharing seats in 255 constituencies, with each party planning to contest 85 Assembly constituencies, as informed by Maharashtra Congress President Nana Patole.

On the same day, the BJP released a list of 40 star campaigners, including prominent party leaders such as Prime Minister Narendra Modi, party chief Jagat Prakash Nadda and Union Home Minister Amit Shah.

The other leaders from the saffron party — Union Minister Nitin Gadkari, Defence Minister Rajnath Singh, Uttar Pradesh Chief Minister Yogi Adityanath, Assam Chief Minister Hemant Biswa Sarma, Madhya Pradesh Chief Minister Shivraj Singh Chouhan, Union Minister Bhupendra Yadav, Smriti Irani, Piyush Goyal, Jyotiraditya Scindia, Pramod Sawant were in the list.

The list also includes names of prominent leaders from the State — Maharashtra deputy CM Devendra Fadnavis, Vinod Tawde, Narayan Rane, Pankaja Munde, Chandrakant (Dada) Patil, Girish Mahajan, Radhakrishna Vikhe Patil, Ashish Shelar, Udayan Raje Bhonsle, Raosaheb Danve Patil, Ashok Chavan, Sudhir Mugantiwar, Navneet Rana, among others.

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