It almost happened by chance. In the days following the presentation of the Union Budget, Prime Minister Narendra Modi was meeting with BJP MPs from various states. It was then that he met this particular MP from Rajasthan, who overcame his fear, made it apparent to him that whatever has been done in the last four years would not be enough to romp home in 2019. Modi, not accustomed to being challenged or advised, shot back that now there’s only one option left for him i.e. to change the Prime Minister himself. That was enough. Many MPs who were preparing themselves to confront the PM with the ground reality, decided to go back to their shells. However, it sent the alarm bells ringing among other senior leaders inside the party.
Such was the panic that RSS immediately jumped into action and included this issue in their agenda that was discussed in the meeting of their general representatives. They have come up with a roadmap as well. This roadmap believes that the work done by NDA would not be enough to win 2019 polls and that the party and its machinery will have to resort back to what they know the best: to polarise the nation. This will put the party at the pole position in as many as 200 seats in the Cow Belt. They also believe that for this strategy to be effective, Ram Mandir issue needs to be at the centre of this. And this is what they are going to do.
This strategy that has been formed puts Uttar Pradesh at its top-most priority. After all the state accounts for the highest number of LokSabha seats. It would be crucial to retaining this state. The BJP roadmap says that the party will need to change at least a quarter of the 80 sitting MPs. However, RSS has opposed this move as it considers it counterproductive. RSS believes that victory can only be achieved when the developmental agenda is merged with Hindutva political agenda. The stress is to make voters believe that stabilisation and improving law and order has led to the improvement of the investment scenario in the state. The second stage, when the first one does not cut teeth among the voters, would be to bring back the issues of Ayodhya, Kashmir, Uniform Civil Code etc at the fore. Religion and politics will run parallel, as was done in the previous elections. But efforts shall be made to hoodwink the electorates to believe that twine shall not meet.
The first part has been achieved by the close collaboration of central and state leadership of BJP in Uttar Pradesh. While Chief Minister Yogi Adityanath is being given the credit for the “success” of the Investors’ Summit, sources say that it was Prime Minister Modi who indicated big industrial houses in the country to not only attend this summit but also promised to make an investment in the state. Tata, Reliance and Mahindra have all announced projects in PM’s home seat of Varanasi. How much of these promises will actually turn into reality is anyone’s guess, but by the time this will be revealed, elections will be over.
Such was the panic that RSS immediately jumped into action and included this issue in their agenda that was discussed in the meeting of their general representatives
Sources say that following the summit, a team has been constituted under the leadership of chief secretary Rajeev Kumar comprising half a dozen of smart and efficient officers that will try and expedite the process of bringing promises to the ground. This team will assure single-window clearance for new industries like what was achieved in Noida. The team will assure that all the facility is awarded to those industrialists who are keen on investing in the state. An officer linked with this project told TSI that the state will achieve the target of five lakh direct and indirect jobs by the end of this year. The government has, according to him, taken the decision to create a basic infrastructure within six months for the setting up of industries.
Says actor Raja Bundela, “Bundelkhand has always been ignored. The announcement of the setting up of Defence Corridor worth Rs 20,000 crore in this region will go a long way to bring the region into the developmental mainstream.”
It is also being arranged that top seven ministries of the central government give priority in their ministerial projects to Uttar Pradesh. These include agriculture, railways, heavy industry, civil aviation, road and waterways transportation, small-scale industry and health and family welfare. The government wants these ministries to give something on the ground to show for all the brouhaha. So that electorate at least gets a feeling that something is being achieved on the ground, prompting them to vote for BJP.
The most effective among them all appears to be NHAI. Says Nitin Gadkari, “As faras developing basic infrastructure is concerned, our ministry has shown exemplary results on the ground. This has increased the options for transportation. From freight to road transportation, everything is on the upswing bringing the prices down.”
Even his detractors seem to agree. Samajwadi Party leader Naresh Agarwal says, “While the government is a failure, the only minister who will be known for his work shall be Nitin Gadkari, who has done good work through his ministry.”
The railway ministry has approved the roadmap for the construction of freight corridor for the promotion of trade. MoS railways, Manoj Sinha, insists that as soon as the corridor and other projects become operational, the situation on the ground will change dramatically. Industrialists in the state will benefit both while transporting freight as well as while exporting their products.
As far as the Smart City project is concerned, as many as 24 districts from Bundelkhand, Ruhelkhand and eastern Uttar Pradesh have been put on apriority list
As far as the Smart City project is concerned, as many as 24 districts from Bundelkhand, Ruhelkhand and eastern Uttar Pradesh have been put on apriority list. Nodal agencies have also been finalised. UP Jal Board has been asked to step up its role, and it is trying to do so.
As far as keeping an eye on developmental work is concerned, an officer at the PMO has been deputed just to keep an eye on Uttar Pradesh. It is also rumoured that as many as two officers from the state will be brought to the PMO on deputation. These officers have been selected by PM Modi himself and will act as a bridge between PMO and CMO, expediting the process of implementation while doing so. PMO came into action when the PM was told that projects have little or no impact on the ground and that two of the ministers are expert in show-off, but are worthy of little else.
POLITICAL BUDGET
NDA government’s last full Budget 2018-19 presented by Union finance minister Arun Jaitley on February 1 is shorn of economic sinews to renew growth. The Budget has failed to provide relief to the middle class but it has given some relief to farmers by way of hike in MSP. It’s a political Budget with an eye on General Elections next year, writes G SRINIVASAN
The 2018-19 Budget, unveiled by the NDA government headed by the BJP and its finance minister Arun Jaitley, on February 1, 2018 turned out to be a tame affair as its message was political rather than the economic weal of the nation at its core. With elections to as many as eight state assemblies due this year before the panIndia General Elections in 2019, the facile option to have one foot on the muchtraversed welfare socialist path and another rickety one on minor sops to the tax-paying community, the much-milked partners in progress, palpably highlights a regrettable lack of the requisite pertinacity of purpose to push growth come hell or high water. If only the government gave credence to its own trumpeted manifesto-mantra of minimum government and maximum governance, the budget-makers would have shied away from spoiling the doing business in India efforts easier with an intimidating host of fiscal proposals. Because as this would lead to the already high-cost domestic economy an onerous terrain to operate both for domestic as well as overseas investors. At a time when the Prime Minister himself railed against relapse of protectionism in global economy at the influential World Economic Forum in Davos recently, the Indian authorities had hiked the customs duty on a range of goods without weighing the low-hanging fruits to cut to size of the labyrinthine list of as many as 19 customs duties prevailing in the tax statute today! The gap between articulation and action was never as wide and worrying as in this case which is bound to hurt India’s image to sit on the high table of global institutions sans squirming!
For a high-cost domestic economy struggling against the distinct slowdown that was the byproduct of the twin policy measures of demonetisation of high denomination notes in November 2016 and the ill-prepared roll-out of the one-nation, one-tax – the Goods and Services Tax (GST) from July 1, 2017, the Budget contained, as expected in a pre-election year, a spate of steps for the agricultural and rural sectors, a new unfunded health insurance scheme for the poor and insubstantial reliefs in income tax by way of reintroduction of ‘standard deduction’ (by way of transport allowance & reimbursement of miscellaneous medical expenses) pegged at Rs 40,000 and tax-saving benefits to senior citizens who in any case do not play any dynamic role in the economy now in their post-retirement phase. But the youthful sections manifest in the demographic dividends and the swathe of the middleclass people who carry on albeit all the corking burdens imposed on them do deserve a modicum of relief which the Budget has miserably failed to deliver.
For the manufacturing industrial sector, the extension of corporate tax of 25 per cent made to micro, small and medium enterprises (MSMEs) with turnover of less than Rs 50 crore in 2017 Budget to companies with turnover up to Rs 250 crore now meant to benefit the entire class of MSMEs which account for almost 99 per cent of companies filing their tax returns. Now, only about 7,000 companies out of about seven lakh companies filing returns of incomes with turnover above Rs 250 crore would be in the oppressive 30 per cent slab. The nub is that for the big corporate houses employing an army of workforce and invested heavily over the years by sacrificing many present consumptions, the anticipated relief in high corporate tax has flunked them this time too with a mere sardonic assurance from Mr Jaitley that they would not remain so forever! This has come at a time as rightly observed by former finance minister Palaniappan Chidambaram that the industrial gross value added (GVA) growth has plunged from 9.8 per cent in 2015-16 to 6.8 per cent in 2016-17 to 2.7 per cent in 2017-18, while in the same span manufacturing GVA fell from 12.7 per cent to 7.9 per cent and to 3.1 per cent, all under NDA’s governance!
At a time when the PM railed against relapse of protectionism in global economy at Davos, the Indian authorities had hiked the customs duty on a range of goods
Even as cess and surcharges are superimposed on extant direct and indirect taxes to make the burden onerous over the years, this Budget has done its bit to keep it that way to the dismay of taxpayers, both individuals as also industries. Personal income tax and corporate taxpayers who paid 2 per cent cess for primary education and one per cent cess for secondary and higher education would now pay one per cent more for meeting the health needs of poor, taking the health and education cess to 4 per cent. At a time when mobile phones are widely used in the country, the hike in customs duty on mobile phones from 15 to 20 per cent and on some of their parts and accessories to 15 per cent and on certain parts of televisions to 15 per cent is going to hurt consumers, though the ostentatious objective is to encourage domestic manufacturing. It is also regressive to levy a surcharge at 10 per cent of the aggregate duties of customs by way of a social welfare surcharge which might hurt all importdependent export production units to render their cost prohibitive.
The reintroduction of the tax on longterm capital gains (LTCG) over Rs 1 lakh made from the sale of shares at 10 per cent on the ground that the return on investment in equity is already quite attractive without tax exemption is viewed as baloney by markets which spooked the day after the Budget! While the authorities justify this as a small price to be ignored by investors as is the norm elsewhere, it remains an open question as to how this would impact on more business surpluses being invested in financial assets and the players in the bourses for the equity culture to take firm roots?
For the farm sector, there is the munificent move to peg minimum support prices (MSP) for kharif crops at 1.5 times the cost of produce for such crops. How this is going to be funded is not disclosed. It may be noted that the Ashok Dalwai Committee set up to look at the ways of doubling farmers’ income by 2022, a pledge made in Budget 2016-17, reckons that the government would need to spend an additional Rs 6.40 lakh crore to deliver on its promise! By this yardstick, the MSP hike proposed and the enhanced budgetary allocation for agriculture and agricultural credit would in no way be nearer the tall objective. The 100 per cent tax deduction to companies registered as Farmer Producer Companies with annual turnover up to Rs 100 crore in respect of profit derived from such activities for a span of five years from fiscal year 2018-19 would help huge agri businesses than isolated poor farmers or a group of farmers who find the farming undertaking strenuous in the absence of supportive steps to sustain their zest to stay in farming. The high debt burden, the exorbitant cost of inputs such as nutrients and quality seeds and lack of able hands in farming for hire all obstruct even landowners from ably exploiting their lands. It is small wonder tinsel world stars and corporate honchos buy farm lands in bulk to raise farm houses to stay exhilarated even as our kisans toiling against the excruciating elements of Nature bravely remain mired in misery and debt stoically with little support from the authorities.
With the government reneging on its commitment to stick to fiscal consolidation path by a few notches under the alibi that slowdown of the economy does not justify strict fiscal policy when monetary authorities have their own reservations in cutting cost of money because of the fear of inflation, the pre-budget Economic Survey’s wise counsel to exercise “policy vigilance” on the coming year against emerging macro-economic concerns including spikes in crude oil prices is timely for the authorities and to the larger body of the Modi sarkar, policy analysts wryly say.
However, not everyone is impressed. Exfinance minister P Chidambaram says, “The rate of growth has nosedived in the last four years. Even those sectors that are crucial in pushing the development are languishing even after providing stimuli. The figure will still fall short of the already revised one. In such a short period, even the new stimuli won’t work.”
Chidambaram is not alone in his pessimism. Senior Congress leader GhulamNabi Azad maintains that since stimuli won’t work in the short term, the government will resort to its communal agenda, which it is an expert in. “Look how shrewdly they are implementing their agenda. Uma Bharti has in a way abandoned her ministry and is focusing again on Ayodhya. While she feigns bad health while doing her duty as a minister, she becomes a spring chicken when it comes to giving incendiary comments.”
Like Azad, there are others too who believe that the BJP will indeed resort to communal agenda to win 2019 polls. In fact, party’s own internal survey says that it will have to resort to this agenda to win the polls. While Sangh is also in agreement, it does not want to discuss it in public. However, work is underway to implement the same. Mohan Bhagwat feels that successful implementation of the polarisation agenda will be the salient feature of his second term as RSS chief.
Since RSS has brought back the government in its grip, it is RSS that will decide which leader or functionary to depute for which purposes. A synergy needs to be developed between the organisation and the party for optics purposes, and that is why Amit Shah was asked to participate in the RSS meet recently. It will be Shah’s duty to synchronise party’s roadmap with RSS’s agenda. The process has already been set into motion and booth-level workers who can effectively implement this agenda are already being prepared. A division of labour between RSS and the party has also been finalised with RSS functionary being given the primary leadership role in the implementation process.
However, cabinet minister Ananth Kumar dismisses the perception summarily. “BJP does not have any hidden agenda for 2019 polls. We will seek votes from the people by showcasing the work we have done. The government under the leadership of Prime Minister Modi has achieved so much in such a short time frame, and we will ask the electorates to judge us on the basis of this work. This is our political capital and this is what will propel us back to power in 2019. Modiji was and will be our star campaigner, and it is him who will lead us again to victory,” he adds in good measure.
Congress’s Mukul Wasnik negates this. “All the promises that were made remain unfulfilled. No government in the recent history has performed so underwhelmingly after being given such a brute majority. While youth and farmers are still waiting for deliverance, the targets are being conveniently set for the year 2022 in the Union Budget. This is a cruel joke. I am sure the party will resort to communal agenda to hide its under performance,” he said.
Whatever be the opinion, it is evident that the party is not very confident of its own achievements. And this is why it is looking for other factors to help it in the elections. The incendiary comments by its functionaries and projection of Hindutva icon like Adityanath are proof that communal agenda will be in the centre in the run-up to the polls. There is no dichotomy between the party and the RSS as far as the roadmap to achieve victory in 2019 is concerned. And that is what is worrisome.
