FM Nirmala Sitharaman seen here ahead of the Interim Budget which was presented before the 2024 Lok Sabha elections
Credit: Reuters File Photo
The diminished political capital of the Bharatiya Janta Party (BJP), after the Lok Sabha elections has forced it to tone down its rhetoric on the ‘freebie culture’ aka revdi, as infamously christened by Prime Minister Narendra Modi. Will the forthcoming Union Budget 2024-2025 reflect that policy change, just like it was visible in the recent announcements by its coalition government in Maharashtra, or will the National Democratic Alliance (NDA) government resist the temptation to splurge? Will it bite the welfare bullet, or will the government at the Centre open the floodgates to keep its allies — the Telugu Desam Party (TDP) and the Janata Dal (United) (JD(U)) — happy?
Both 2024 and 2025 are crucial election years. There are four Assembly elections in 2024 — Maharashtra, Haryana, Jharkhand and Jammu and Kashmir, and all are critical for the Bharatiya Janata Party (BJP). Then there are elections in Bihar and Delhi, in which the BJP fancies its chances to have a serious claim to power.
The Lok Sabha election results have forced the BJP to adopt an attitude towards welfare spending which is more akin to that of the Congress. Given that the five NYAY-25 guarantee agenda of the Congress gained some traction among certain sections like the youth, farmers, and women, the BJP-ruled states have unveiled a series of welfare measures aimed at wooing the voters ahead of the crucial Assembly polls.
The Maharashtra government announced a monthly allowance of ₹1,500 for women and three free cooking gas cylinders for poor households, among other benefits. Madhya Pradesh introduced a Budget that promises increased spending on agriculture, free hearse services for poor families, and increased funding for cow sheds. Similarly, Rajasthan's BJP government increased the annual PM-KISAN disbursement to ₹8,000, benefiting nearly 7 million farmers. Haryana's BJP government announced free bus rides for the poor, plots for backward communities, and special recruitment drives. This is in direct contravention to Modi’s repeated opposition to the ‘Revdi’ culture!
The July 23 Budget speech will be a litmus test on whether the BJP will change its policy at the Centre as well or will it take the requisite road to reform and fiscal consolidation. A snapshot of the spending on central schemes pegs spending that could be termed as ‘revdi’ at ₹5.8 lakh-crore or 12% of the total spending. This includes — ₹2 lakh-crore on food subsidy and free food grains transfer to 800 million beneficiaries, ₹ 60,000 crore on PM Kisan Samman Nidhi, ₹1,64,000 crore on fertiliser subsidy, and ₹ 75,021 crore on the newly announced PM Surya Ghar Muft Bijli Yojana, among other smaller schemes such as LED bulb distribution, income support scheme to farmers through cash transfers, and LPG subsidy (reduced price of domestic LPG cylinder few months before the elections).
The fact remains that the June 4 results were a resounding rebuke to the BJP policies which deepened economic inequality. It was a clear rejection of the manner of governance that sought to centralise, control, bulldoze, and even impinge upon the ethos of the Constitution.
Economics and politics cannot be seen in isolation. When the Congress promised 'guarantees' such as cash assistance, free LPG cylinders, and free bus rides for women ahead during the Karnataka elections, Modi said, “A country cannot be run like this…revdi culture is essentially eating away the resources of future generations. The BJP thinks for the next 25 years and doesn’t take shortcuts.”
Even before the Karnataka elections got over, in March, the Congress announced Rs 1,500 cash transfer for poor women in Madhya Pradesh. Following this the BJP government in the state also announced the same in June. But since the BJP was in power, its Ladli Behna Yojana could be implemented, which resulted in the BJP retaining power in the state, and the scheme being credited for its return. Similarly, in the Chhattisgarh and Rajasthan elections, the BJP was forced to announce LPG cylinders for Rs 500, and financial assistance to married women and landless agricultural labourers. Now the announcements in Maharashtra and Haryana, and the adoption of this ‘Congress model’ have dented Modi’s claims of not taking shortcuts.
For the Union Budget, Modi will try to project that his government, albeit now a coalition, is following ‘business as usual’; that it is reform-oriented and works on fiscal prudence. The only window of opportunity for large-scale spending would be the augmented dividends of ₹2.11 lakh-crore provided by the Reserve Bank of India (RBI). But the demands for special status and targeted packages by the TDP and the JD(U), along with the electoral pressure to provide aid to farmers, may puncture BJP’s economic conservatism.
The fact is, no government in India, can indulge in ignoring welfare programmes enshrined in the Constitution, as part of the Direct Principles of State Policy. The BJP has started a course correction in following the path of welfarism as seen in several BJP-ruled states. The Union Budget will show if the party has adopted the same stance at the national level.
(Rachit Seth is the founder, Policy Briefcase, and works with the Congress. The views expressed are personal.)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.
Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.