Union Finance Minister Nirmala Sitharaman speaks during a post-budget interaction with Confederation of Indian Industry's (CII) National Council, in New Delhi, Saturday, Feb. 5, 2022. (PTI)
There were two unwelcome guests sitting outside finance minister Nirmala Sitharaman’s capacious office in North Block before she presented the Budget. They were the middle class and the poor. Ravaged by the pandemic, falling incomes, and absence of jobs, they were expectantly waiting to get some relief from her. Nirmalaji did not let them into her office. On her way out to Parliament on February 1 she looked through them, and pretended they did not exist.
Nirmala is a friend. She is a cultured person. It is not her habit to be rude. The fact that, in spite of this, she looked disdainfully through her anxious visitors was because she is a disciplined soldier of her party, and compulsively loyal to the philosophy of its supremo, Narendra Modi. That philosophy, quite simply put, is to push for higher economic jobless growth in favour of the very rich, in the hope that someday in the future this may also benefit the vast majority of the indigent and the needy. The future is defined as 2050, the Amrit Kaal, a 25-year period.
In other words, the real suffering of the middle class and the poor has been ignored on the basis of a promise that may or may not fructify two-and-a-half decades later. The house is on fire today but the government is saying that we will in due course perhaps arrange water to douse it. This would still be acceptable if some credence could be put on the tall promises of Modiji. In 2017 he grandiosely announced that farm incomes will double in the next five years, by 2022. We are in 2022, and nothing of the sort has happened. In fact, the farmers have been on a year-long agitation to have their basic demands met.
Is the house really on fire? The finance minister could not but be aware of the stark ground realities. Unemployment is at a 48-year high. Three crore graduates are jobless. Every year five million educated join the labour force, in addition to the millions who are already jobless. Inflation is asphyxiating the poor and hopelessly burdening the besieged middle class. Even something as basic as cooking oil and vegetables have gone through the roof. Petrol and diesel prices have sky rocketed. Incomes are shrinking and jobs are unavailable.
According to Pew Research, March 2021, the number of the poor, with an income of less than $ 2 a day, has risen from 59 million in 2020 to 134 million in 2021. The middle class is shrinking, from 99 million in 2020 to 66 million in 2021.
According to the Global Hunger Index 2021, India stands at 101 out of 116 countries; only 15 countries in the world fare worse than us. At the same time, those at the very top of the pyramid are getting richer. One per cent of the upper most crust accounts for over 73 per cent of national wealth.
This is not a diatribe against the corporate sector, a reflex case of outdated socialism. Our businessmen and industrialists should continue to make money and contribute to the economic cake. But it is a case for some perspective. A Budget is meant to cater to the needs of all Indians. The successful cannot secede to form their own Republic. We all have to live and prosper together. That is why the FM could have been a little more sensitive to the palpable suffering effecting the largest number of Indians. They have been battered by three successive disasters: demonetisation, the botched-up implementation of the GST, and the pandemic. They need relief and succour.
For instance, does the Budget take into consideration the hapless plight of the MSMEs and the unorganized sector? The MSME sector contributes to 45 per cent of the GDP and 85 per cent of employment. It is imperative, therefore, to bail out this sector, but it did not figure in the FM’s priorities. All that the Budget promises the MSMEs is more loans, when it is known that their ability to take more loans is severely limited, and risk-averse banks are averse to lending to them. The FM needed to show some out of the box thinking to revive this sector, through strategic loan waivers, subsidies, incentives, the essential hand holding that would bring them back to par.
The blunt truth is that the BJP government has decided to rub the nose of the middle class and the poor into the ground. Consider these facts. The subsidy on fertilisers has been reduced by 25 per cent. The food subsidy has been decreased by 28 per cent. The LPG subsidy has gone down by 83 per cent over the last three years. The budgetary allocation for MNREGA has been decreased by 26 per cent, from 98,000 crores to 73,000 crores. The outlay for sectors like education and health, that directly impact the poor, is shocking. In the aftermath of the pandemic, one would have thought that basic health would be a priority for the government. Wrong. The allocation for this vital sector shows no increase. Education accounts for 2.8 per cent of the budget, way below the six per cent suggested by the NEP-2020.
To the middle class and the poor waiting expectantly outside her office, the FM could well have said like Marie Antoinette, if you can’t get bread eat cake. We are back to the days of India Shining but worse still. If people ask for jobs, they are told to visit a mandir. If they complain of high prices, they are asked to say Bharat Mata Ki Jai. Their real needs today have been indefinitely deferred to an uncertain promise of tomorrow. But the promise, apart from being sorely insensitive, has seen too many past breaches. As Ghalib said: Tere vaade pe jiyen hum tau ye jaan jhoot jana, ke khushi se mar na jaate ghar aitbaar hota: If you think I live on your promise then consider it a lie, I would have died of happiness if I had faith in what you said.