Partap Singh Bajwa
Rajya Sabha MP
THE world of reality has its limits; the world of imagination is boundless.” Jean-Jacques Rousseau’s words sum up everything that the Narendra Modi government will be remembered for. On February 1, the government fell back on its most characteristic trait — to imagine new goals by shifting the goalposts entirely. It presented a ‘10-point Vision for 2030’! One must commend their sheer chutzpah.
I believe Indian citizens have learnt to ignore the Prime Minister’s ridiculous rhetoric. So, it is not necessary to even consider this ‘10-point Vision’; it is nothing but fantasy. The Budget, on the other hand, will affect people for years to come. Let us put aside the brazen violation of constitutional propriety and parliamentary norms in presenting massive changes in an interim Budget. Such lack of respect is part and parcel of this government.
There are three key issues in the Budget that I would like to address — defence expenditure, the pension scheme for the unorganised sector and the PM-Kisan Scheme.
One must understand that no Budget figures should be looked at in absolute terms. In an almost $3 trillion economy, any Budget number tends to be massive; so, measuring numbers as a percentage of the GDP provides a better reference point. Much has been made about the defence budget being raised to Rs 3 lakh crore — a huge number certainly. However, it is just 1.51 per cent of the GDP, the lowest in decades. In comparison, China spends over 2 per cent of its GDP on defence and its GDP is about 5 times the size of ours. A government that claims to care about the military and national security has reduced defence spending from 2.05 per cent of the GDP in 2013-14 to 1.51 per cent. Even more importantly, the spending on capital expenditure — to buy weaponry and modernise the military — has dropped. Under the UPA, as a share of the total defence budget, capital expenditure stood at 39 per cent in 2012-13; today, this figure is just 21 per cent. We all know the procurement issues that have cropped up during the tenure of the Modi government. So, claiming an increase in defence spending while neglecting the military’s modernisation concerns is, at best, disingenuous; at worst, it is tantamount to treason.
The pension scheme for the unorganised sector, another flagship announcement, is full of problems too. Firstly, where is the data? There is no public data or analysis that this scheme claims to be based on. A government that is celebrating the imagined victory of demonetisation as having ‘formalised the economy’ is now expecting workers to remain in the unorganised sector till the age of 60. What happens to the premium already paid if a worker shifts to the organised sector at the age of 45, for instance? How is this remaining money taxed? There are several unanswered questions. The data that does exist shows unemployment at a 45-year high, so the government has hastily put together a policy to placate a sector wrecked by demonetisation.
Finally, there is the much-touted PM-Kisan Scheme, which will provide Rs 6,000 a year as income support for each farm household. A government that wanted to double farmers’ income by 2022 is handing out Rs 6,000 per year in 2019. The scheme is a testament to the failure of government schemes — from crop insurance to drip irrigation and the Minimum Support Price (MSP). Moreover, the scheme only covers farmers who own land, excluding landless labourers and tenants.
The crisis in agriculture is acute. Growth is at a paltry 2.5 per cent, as compared to an average of 4 per cent during the UPA rule. Heavy indebtedness has hamstrung Indian farmers. In Punjab, the bread basket of the country, the total outstanding farm credit is an unsustainable Rs 1 lakh crore. Procurement has been weak, with farmers not receiving the promised MSP. Demonetisation caused market prices to crash even further, leading to fire sales. Crop insurance schemes have become a cruel joke —there have been cases of payouts of less than Rs 50, while big banks enrolled for the scheme have made around Rs 10,000 crore in profits. The government has failed to address key issues of land ownership, irrigation, technology and productivity. On top of all this, climate change has made the situation worse. Rising temperatures and inconsistent precipitation have damaged yield and cropping cycles, alongside the added impact of ozone depletion that has gripped North India. Structural reforms are the need of the hour. For example, rationalising the export-import policy, investing in high-yield seeds and technology, strengthening procurement at the MSP and breaking the middleman cartels are some of the options available to policy-makers. Instead, after nearly five years of the NDA rule, farmers will get just Rs 6,000.
It is clear that this is the government’s last-ditch attempt to stay in power. The grandiose promises of 2014 are a far cry from the ‘Jumla’ Budget of 2019. As Rousseau said, “People who know little are usually great talkers, while men who know much say little”. It might be an aphorism, but it was as true during the Enlightenment as it is in today’s India. The Modi government has talked a lot in the past few years. Come May, it will be time to face the music.