India’s This Year Budget Shouldn't be Excessively Bold

On February 1, PM Narendra Modi and his government will give their last federal budget before the general elections going to be conducted in few months. Unlike other budget, this typically isn’t a high octane affair; governments are discouraged from locking their successors into any new spending or taxes. In Interim budget as it’s called, tries to avoid committing spending from the entire financial year, which begins from April.

Our Finance Minister seems ready to break it with that requirement. Politicians from BJP insists that there is no legal requirements to present just one account to vote and the reason is, they want to pack any many vote tickets, populists’ announcements as they can before the election campaign formally begins and governments are forbidden to make new promises outside party manifesto.

PM Narendra Modi doesn’t have his back against the wall in the reelection campaign; he won’t be feeling entirely comfortable either. A round of the state election  which you saw last year were they lost in three North Indian states- in the very region that propelled him to his landslide victory in the last parliamentary election in 2014.

The truth is that PM Modi doesn’t have many seats to lose. His majority in the lower house of the parliament is both unprecedented by Indian standards nevertheless, razor or thin. He won 282 seats out of 543 in 2014, and has lost several by election since. If he has to try the coalition, he may wind up being vulnerable to leadership within its party.

That is why these few weeks before the full blown campaign are very crucial. Prime Minister Modi wants to use those times to win over those sections of the Indian Electorate. Those are more disappointment with his underwhelming record - small business owners, salaries of middle class and farmers.

Small business owners are the backbone of the BJP as they are ideological parents of the RSS, but, PM Modi’s decision in 2016 for discontinuing the high currency notes overnight hit such businesses - which in India, often rely on working cash in capital. As a result, businesses that were already coming from demonetization saw their compliance costs increase sharply.

By: Lakshender S Angras

Content:https://economictimes.indiatimes.com/news/economy/policy/why-indias-next-budget-shouldnt-be-excessively-bold/articleshow/67718984.cms