The political context

Clutching at straws

Print edition : March 01, 2019

The police use tear gas to disperse farmers who were pressing for waiver of farm loans, among other demands, at the New Delhi-Uttar Pradesh border in October 2018. Photo: AP

The political context of the announcements in Budget 2019 is the BJP’s defeat in the recent Assembly elections in the Hindi heartland and its urge to recapture lost ground.

Even as stand-in Finance Minister Piyush Goyal was presenting Budget 2019-20 on February 1 in Parliament, commentaries in the media started pointing out its blatant political and electoral orientation: the thrust areas included a new scheme to enhance the income of small and marginal farmers, a mega pension scheme and income tax sops aimed at the middle class. Other indications of the impulse imparted to the Budget preparation exercise by recent political factors were the marginal increase in allocations for rural spending and the interest subvention for crop loans. The potential beneficiaries of these proposals are farmers and other sections in the rural areas, senior citizens (pensioners) and a clutch of communities that matter in elections, especially in north India.

The political context for these measures was evidently the defeat of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) in the recent round of Assembly elections in Madhya Pradesh, Rajasthan and Chattisgarh and the consequent urge to recapture lost ground before the 2019 general election.

Nearly a week after Goyal’s Budget presentation, Prime Minister Narendra Modi, speaking in the Lok Sabha, tried to present a case of good governance for his government and ridiculed the mahagathbandhan of the opposition as Mahamilavat (highly adulterous). Even before the Prime Minister’s turn to speak came, the Reserve Bank of India (RBI) announced another measure that sought to strengthen the farmer-and-rural-sector-oriented proposals in the Budget. The RBI raised the limit of collateral-free agricultural loans from Rs.1 lakh to Rs.1.6 lakh, with the professed aim of helping small and marginal farmers. Clearly, the measures announced in the Budget are expected to get more supplementaries beyond its framework in the days to come.

Early reactions to the Budget proposals were mixed, with the voices of disapproval being more voluble. The most important proposal, according to the BJP-NDA’s own admission, is the farmers’ income enhancement scheme, which involves a transfer of Rs.6,000 a year in three instalments through Jan Dhan accounts. However, the quantum of money that has been allocated has come in for widespread criticism.

Brickbats from farmers

Speaking to Frontline, Mahesh Sahu, a small-scale farmer in Dalli Rajhara in Chhattisgarh, said that what was being doled out was a cruel joke on farmers. “A loan of Rs.65,000 that I took from a moneylender three years ago is yet to be repaid. With accumulated interest, it has become almost Rs.1 lakh. And the government expects me to make do with financial support of Rs.2,000 every four months.”

Colonel (Retd) Subhash Chandra Deswal, a farmer based in Sikandrabad in western Uttar Pradesh, pointed out that the scheme would not bring any relief or enhancement of income to segments of farmers other than the most marginal. “Farmers of western Uttar Pradesh are relatively better off than those in other parts of the country. It is amazing that the Modi government came up with a scheme like this to address agrarian distress. The medium and big farmers are laughing at the scheme,” he said.

Many Sangh Parivar insiders believe that a properly implemented loan waiver scheme, such as the one implemented in early 2009 by the Manmohan Singh-led United Progressive Alliance (UPA) government, would have fetched better political gains than the current scheme. But they also admit that Modi and his team could not have taken recourse to that path because the Congress had taken the lead by launching farmer loan waiver schemes in the three States it came to power.

Moreover, Congress president Rahul Gandhi had taunted the Prime Minister saying that he would not “let the Prime Minister sleep” until Modi announced loan waivers in States ruled by the BJP. Thus, announcing loan waiver schemes would have meant succumbing to Congress pressure. That the BJP’s own loan waiver scheme launched by the Yogi Adityanath government in Uttar Pradesh had come a cropper was also a limiting factor.

A senior Rashtriya Swayamsewak Sangh (RSS) leader based in Meerut in western Uttar Pradesh credited Modi with thinking up the fund transfer scheme. “Modi thinks no end of himself and seems to have these periodic delusions of him being a master economist. His demonetisation drive caused economic havoc all around. I am apprehensive about how this money transfer scheme is going to work out.”

He said that the overall tone and tenor of the Budget was a clear admission of the reality of agrarian distress.“If we can indirectly admit the Congress’ claim and the pressure it is mounting on the issue of agrarian distress, couldn’t we have found a more practical way of assuaging the farmers?” The leader was worried about the scheme causing problems in the BJP’s electoral preparations. “Already, there is the sense that the Budget proposals mean too little too late politically. He pointed out that there were enough signals from the ground since Budget 2018 that things were going awry and a course correction was needed, either in the form of radical policy measures or even going in for an early general election.

These proposals have been discussed at different levels of the Sangh Parivar since January 2018, but they were articulated by Rajesh Jain, an entrepreneur and founder of Niti Digital, an outfit that played a significant role in Modi’s 2014 election campaign. In an article for the portal Nayi Disha, Jain pointed out that the decline in the popularity of the BJP and the Modi government manifested itself in many concrete ways in the years between 2014 and 2018. The article stated that Assembly elections were held in 15 States in the period and their results underscored the drop in the electoral support of the BJP. In these 15 States, the BJP had won 191 Lok Sabha seats in the 2014 general election. Juxtaposing the Assembly election trends with Lok Sabha seats indicated a drop of 45 seats for the BJP. He pointed to a drop in the vote share of 10 percentage points in these 15 States for the BJP, from 39 per cent in 2014 to 29 per cent in the elections held since then. This decline, he felt, would continue in forthcoming Assembly elections too and would only get worse with the passage of time. The Meerut-based RSS leader also added that the discussions within the Sangh Parivar on Jain’s article had specifically referred to the situation in Rajasthan and Madhya Pradesh, classifying them serious. “Of course, there were large sections in the BJP and other organisations in the Sangh Parivar who called for drastic measures, including the possibility of advancing of the general election, but Modi and party president Amit Shah were confident of ‘managing’ the situation.”

Several Sangh Parivar insiders believe that the “management strategy” of the Modi-Shah team for the 2018 round of Assembly elections and the 2019 Lok Sabha election hinged on splitting the opposition parties by using corruption cases against many of them. Bahujan Samaj Party chief Mayawati seemed to going along with this game until the Assembly elections in Madhya Pradesh and Rajasthan. Once the Congress managed to get more seats than the BJP in these States, this sense of accommodation vanished. She not only proactively took steps to be associated with the Akhilesh Yadav-led Samajwadi Party, but also got into parleys with Mamata Banerjee to organise the mega opposition rally in Kolkata.

The Meerut-based RSS leader said: “Clearly, that management plan has come unstuck. Our new moves, including the Budget proposals and the manoeuvres against Congress general secretary Priyanka Gandhi’s husband, Robert Vadra, could well be termed clutching at straws.” Evidently, there is no clarity on the political gains from Budget 2019 even within the Sangh Parivar. This suggests that the development and economic welfare path to electoral gains will be abandoned by the Modi-Shah team, instead the focus will be on the communal polarisation plank that is going apace systematically through the “modernisation-beautification- demolition” drive in Varanasi and the “Build the Ram Mandir” sloganeering in Ayodhya.

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