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BJP Manifesto Vs Budget: The More You Talk, The Less You Deliver

Shouldn’t the BJP government’s first Budget reflect the wild promises made just a few months ago in the Lok Sabha elections?
budget 2019

Image Courtesy: NDTV

In the recently held Lok Sabha elections, the BJP led by Prime Minister Narendra Modi carried out a high decibel campaign extolling the achievements of their first term and promising even better achche din in the ensuing five years if elected. The voters – at least 40-odd percent of them – accepted all this and voted them back to power. So, it would be natural and logical to expect that the new Modi government will present a Budget which will be like a thank you note – giving concrete shape to all the promises they made to the people.

However, a quick analysis of the Budget presented on 5 July by the new finance minister Nirmala Sitharaman appears to have brushed all the promises under the carpet. She applauded the huge mandate and then proceeded to wipe out the basis of that very mandate. Here’s a bird’s eye view of this turning away:

Agriculture

Manifesto Promise: “an investment of Rs. 25 lakh crore to improve the productivity of the farm sector”

This is a promise for five years, presumably. So, at least Rs.5 lakh crore should be invested every year. The total allocation for the ‘Farmer’s Welfare’ ministry is Rs. 1,30,485 crore. It appears to have increased substantially from the revised estimate for last year which is Rs. 67,800. But this jump is primarily because of the PM-KISAN scheme launched just before the elections under which Rs.6000 would be given to all small and marginal farmers as income support. That’s not increasing farm productivity, its just a dole to paper over its failure to resolve the deep agrarian crisis which has forced over half of the country’s farmers to become indebted and impoverished because of falling returns.

Manifesto Promise: “expand Pradhan Mantri Krishi Sinchai Yojana to realize 100% irrigation potential of the country within a defined time-frame”

This was a crucial promise because even today, over 55% of the country’s agricultural output emerges from rain-fed areas. Providing irrigation would change the fortunes of millions of farmers. In 2018-19, Rs.4000 crore was allocated to this scheme for increasing the irrigated areas. The Modi govt. could spend only Rs.2955 crore of this. This year, they have allocated Rs.3500 crore, down by over 12% compared to last year’s allocation. Is that how realisation of 100% potential will be achieved?

Manifesto Promise: “We remain committed to the promise of doubling farmer incomes by 2022 and more resources will be made available if necessary”.

The manifesto reiterated this promise made earlier during its term, though it didn’t see much progress. But there is no Budgetary measure that seems to work towards this ambitious goal. As we saw above, allocations for some of their own promises are insufficient. Its just another jumla.

Highways & Roads

Manifesto Promise: “we plan to build 60,000 km of National Highways”

Budget allocation for National Highway Authority of India (NHAI) has actually declined from what was spent last year! According to revised estimates for NHAI, the ministry of road transport and highways spent Rs.37,321 crore on highway building, getting much applause in the process. This year, the allocation has dipped to Rs.36,691. How they are planning to build those promised highways is anybody’s guess.

Manifesto Promise: “connect 100% of villages with rural roads” and a massive ‘Rural Road Upgradation Programme’

The BJP manifesto had promised to connect 100% villages with roads. Budget allocation last year for Pradhan Mantri Gram Sadak Yojana (PMGSY) was Rs.15,995 crore but the ministry of road transport managed to spend only Rs.11,129 crore. This year they have allocated Rs.14,223 crore, that is, nearly Rs.1700 less than last year. How will all villages be connected to roads? In fact, the BJP manifesto had promised that they would “launch a massive ‘Rural Road Upgradation Programme’ to connect centres of education, healthcare centres, and markets with hinterlands to promote rural growth”. This was a laudable objective because better all-weather connectivity would definitely help improve quality of life and provide much needed marketing connectivity. But with limited allocation nothing of the sort is going to happen.

Water for All

Manifesto Promise: “piped water connection to every household by 2024”

It has been estimated that to provide safe piped drinking water to all households would need an expenditure of Rs.60,000 crore at least, not counting maintenance and manpower costs. All told, the National Drinking Water Mission has been allocated Rs.10,000 crore this year. Even if every year a similar amount is spent, it will fall short of the required amount by 2024. Notably, last year, the Modi govt. couldn’t even spend the full allocation for this programme. It was allocated Rs.7000 crore but managed to spend Rs.5500 crore only. If this is the way they are going to go about it this time too, then another wild promise is going to fall on its face.

Infrastructure

Manifesto Promise: “By 2024, capital investment of Rs.100 lakh crore in the infrastructure sector”

While it is difficult to separate out capital investment/expenditure on “infrastructure”, have a look at the total capital expenditure of the government. The current Budget says that in 2019-20, it will spend a total of Rs. 8,76,209 under capital expenditure. This of course includes all kinds of capital spending and infrastructure spending is just a part of it. But at this rate, by 2024, they would have spent about Rs.44 lakh crore, less than half of the promised Rs.100 lakh crore. Moreover, this Rs.8.76 lakh crore capital expenditure for this year is boosted by about Rs.5.38 lakh crore of what are known as Internal and Extra Budgetary Resources (IEBR). These are resources raised by the PSUs through profits, loans and equity. It is normally used by the govt. to finance big expenditures but in recent years, the use of IEBR has grown phenomenally as the govt. tries to raise resources in the face of falling tax revenues. This means hollowing out of PSUs or use of National Small Savings Fund (NSSF) – which has its own repercussions. But that is another story

In sum, the Budget, presented by a government basking in the glory of a decisive mandate in the general elections, is in reality a slap in the face of those who gave that mandate. It won votes on the basis of promises that are brazenly abandoned within months of the elections. The people are bound to see through this deception sooner or later.

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