Full Budget 2024 | Why one can expect the most populist Union Budget this time

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As the Modi 3.0 government unveils its budget, the air is thick with anticipation, and the political corridors are abuzz with speculation. This budget is not just a financial statement but a litmus test for the newly formed NDA coalition’s commitment to its diverse electorate.

The common man, the farmer, the young job seeker, and the entrepreneur are all looking towards the centre with hope for populistic announcements that will ease their burdens and pave the way for prosperity. In this crucible of expectations, the government is also expected to make strategic manoeuvres to strengthen its coalition ties, especially with States that have been pivotal in its formation.

Special financial packages for these states are not just anticipated; they are almost a given. These gestures are crucial for maintaining the delicate balance of power within the coalition and ensuring the stability of the government.

Moreover, the budget is likely to reflect a populist bent, with economic reforms designed to resonate with the masses. Initiatives that promise immediate job creation, infrastructure development, and economic stimulation will likely be at the forefront, aiming to address the pressing issues of unemployment and economic slowdown.

The agrarian sector, which has been a traditional stronghold for the NDA, is also expected to receive significant attention. With rural distress being a hot-button issue, the government might introduce enhanced support for farmers, aiming to alleviate their hardships and secure their loyalty.

Furthermore, with the youth demographic emerging as a decisive factor, employment generation initiatives are anticipated to be a central theme. The government’s approach to education and healthcare is also expected to be populist, with announcements that could include new institutions and increased funding for accessible services.

This budget is more than just numbers; it’s a statement of intent, a roadmap for governance, and a reflection of the political and economic vision of the Modi 3.0 government. It’s a narrative of inclusivity, development, and growth, woven with the threads of populism and political pragmatism. The nation watches with bated breath as the government prepares to chart its course through the complex waters of coalition politics and public expectations.

Strengthening Coalition Ties

The Budget, likely to be announced by mid July, is poised to be a masterful blend of fiscal responsibility and political acumen. It has the potential to strengthen the alliance between the Bharatiya Janata Party (BJP) and its key partners, including the Janata Dal (United), Telugu Desam Party, and Lok Janshakti Party (Ram Vilas).

The allies, particularly from Bihar and Andhra Pradesh, have been vocal in their pursuit of 'Special Category Status'. The Modi government is likely to acknowledge these demands through tailored financial packages aimed at catalysing development and industrial growth in these regions.

The coalition dynamics necessitate active collaboration, and policy concessions may be unveiled, granting these states the flexibility to implement central schemes in a manner that aligns with their unique developmental needs. This will solidify the NDA's internal cohesion and signal the Modi government's commitment to federalism and inclusive growth.

The Modi 3.0 government aims to craft a budget that strengthens the nation's economic fabric and fortifies the political alliance. This approach is emblematic of a government attuned to the imperatives of coalition politics, determined to navigate its term with a vision that is broad, inclusive, and development-oriented.

Economic Reforms with a Populist Bent

The Modi 3.0 government is set to strike a balance between economic reforms and populist measures in its fiscal policies. This approach aims to address the immediate needs of the people while building long-term economic resilience.

Increased spending on welfare schemes is expected, targeting the most vulnerable sections of society, including direct cash transfers and subsidies on essential commodities. This will ensure that the benefits of economic reforms reach the grassroots level and serve as a cushion against short-term disruptions.

Infrastructure projects will receive a significant boost, stimulating economic growth and creating job opportunities. Investment in transportation, energy, and digital connectivity will have a multiplier effect, leading to the development of ancillary industries and services.

In coalition-ruled states, populist measures will be more pronounced, ensuring that economic reforms do not alienate the government's support base. By aligning populist measures with economic reforms, the Modi 3.0 government aims to create a win-win scenario where public welfare and long-term economic goals are addressed in tandem. This approach will shape India's economic trajectory and political landscape in the coming years.

Employment Generation Initiatives

The Union government is also expected to prioritise employment generation initiatives to address the pressing issue of unemployment. This approach serves both economic and political purposes, as it responds to the needs of the economy and counters the opposition's criticism of the BJP's alleged failure to generate employment.

To achieve this, the government may announce new initiatives or expand existing programs like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), focusing on creating job opportunities for the youth. The expansion of MGNREGA could include increasing the number of guaranteed workdays or raising wage rates, boosting rural economies and consumption.

The government may also introduce skill development programs to make the youth employable in sectors like technology and manufacturing, driving economic growth. These initiatives would provide immediate relief to job seekers and prepare the workforce for the demands of a modern economy.

By addressing unemployment, the government aims to demonstrate its commitment to the welfare of the people and its capability to fulfil election promises. This approach is expected to be a key feature of the Modi government's budget announcements.

Agricultural and Rural Focus

The Modi government's budget is expected to prioritise agriculture and rural development, a direct response to the electoral feedback from key agrarian states like Haryana, Rajasthan, and Uttar Pradesh. Enhanced Minimum Support Prices, comprehensive loan waivers, and effective Direct Benefit Transfers are likely to be announced to placate farmers and regain their trust.

The Jat community's anger, stemming from issues like OBC reservation and handling of farmers' protests, has been a significant factor in the BJP's poor performance in these states. The government's budget proposals are expected to address these grievances, aiming to mend ties and restore the BJP's standing among these pivotal voter segments.

— The author, Prof. Sayantan Ghosh (@sayantan_gh), is a political observer and columnist who teaches journalism at St. Xavier's College,  Kolkata. The views expressed are personal.

Read his previous articles here