In a judicious mix of politics and economy, Arun Jaitley’s budget adopted a middle path with a lot of rural India focus, providing the much-needed support to the farm sector. Opposition parties, of course, true to their dharma, called it a ‘suit-boot budget’ despite the fact that the Narendra Modi government had at last turned its full attention to the ‘Sab ka saath, sab ka vikas’ slogan in delivering the right thrust to enliven the rural economy.
The flagship ModiCare programme announced by the finance minister came as a stunner in fact. The impressive Rs 5 lakh per family health insurance scheme which will cover 10 crore families - this is being touted as a world’s largest healthcare scheme, will test both the Modi government and the Opposition.
Because this scheme, if implemented properly and fully, will take away a lot of socialist ground from under the feet of the opposition parties. Will the bureaucracy cooperate with Modi in delivering this world’s largest scheme impeccably? There would always be questions on whether the money should not go into strengthening government medicare systems, instead of benefiting private hospitals.
This scheme has the potential to make or mar the Modi government. How the scheme will be rolled out by the Health Ministry will be closely watched by Modi who will be banking on this social security measure more than any in the next general elections. This government has just 11 months to deliver the promise to the 10 crore families of the poorest of the poor.
Politically, non-BJP opposition faces its nemesis if the scheme is effectively put in place by the Centre. To ensure that the message reaches out to the right audience with general elections next year, the finance minister took to Hindi when talking about agriculture/farm sector.
In addition, the budget allocated Rs 14.5 lakh crore towards job creation in rural India and promised to set the minimum support prices for crops at 1.5 times of the cost of production, with an exceptional cost-plus-50 per cent pricing for all monsoon crops that are at the mercy of the nature and its vagaries.
Again, as promised the Modi government went the extra mile in favouring the small and medium businesses in terms of corporate tax rate reduction to 25 per cent. Large corporates would surely be feeling high and dry in terms of promised tax rate reduction. The emphasis laid on research and development is also significant.
Some even called this an election manifesto as several elections are ahead. But, then demonetisation was announced just ahead of the Uttar Pradesh elections and the GST before the Gujarat elections. So, there is always a certain amount of risk taking by Modi government. The FM has ensured that the Centre’s rural focus is back in place by parking sufficient funds where they matter.
The structural reforms are expected to propel India among the fastest growing economies. This quintessential rural budget sounds good, but a lot depends on its reflection on the ground as it aims at throwing a firewall of protection against criticism.