The newly elected alliance government recently unveiled its first Union Budget, with Smt. Nirmala Sitharaman presenting her seventh budget as Finance Minister. This occasion set a new record, but despite the plethora of promises made to address pressing issues such as unemployment, inflation, and stagnant wages, there was little indication that the BJP had absorbed lessons from its recent electoral setbacks. Instead of a course correction, the budget seemed to echo past errors, as it appeared to neglect the public’s concerns in favor of delivering a speech reminiscent of the Prime Minister’s ‘Mann Ki Baat’.
The Union Budget, rather than focusing broadly on national needs, might as well be rebranded as the “Pradhan Mantri Sarkar Bachao Yojana.” This budget is heavily skewed towards states governed by alliance partners crucial for the government’s stability. Notably, Bihar, under JDU leadership, has been allocated a substantial Rs 59,000 crore, while Andhra Pradesh, led by the TDP, has received Rs 15,000 crore. These allocations seem designed more to secure essential political support than to address widespread national issues.
Despite the substantial allocations under the so-called Pradhan Mantri Sarkar Bachao Yojana, the demand for special status remains unmet. The targeted financial packages for politically aligned states set a troubling precedent, prioritising political obligations over broader national needs. This approach not only sidelines the genuine needs of other states but also neglects states like Maharashtra, which contributes the highest taxes to the center, and numerous opposition-run states. These allocations appear less about addressing real requirements and more about fulfilling political promises.
It is deeply disappointing that the central government has blatantly disregarded the principle of fairness, opting instead to discriminate between states. Maharashtra’s legitimate demands for new airports, a GIFT city-style business hub, and improved infrastructure were all overlooked, revealing a clear bias against the state. In response, Maharashtra’s opposition-led government has expressed its dissatisfaction by deciding to boycott an upcoming NITI Aayog meeting chaired by the Prime Minister.
In the budget, Finance Minister Nirmala Sitharaman introduced an apprenticeship program for youths aged 20-30, pledging one crore internship opportunities with the top 500 companies in India. This plan requires each company to take on 20,000 interns, with a stipend of Rs 5,000 per month funded through their CSR contributions. However, this initiative fails to address the core issue of creating substantial job opportunities or fostering entrepreneurial ventures for the highly skilled youth, particularly in light of the record 9.2 per cent unemployment rate.
This so-called corporate Agniveer program does little to tackle the real issue of unemployment. Instead, it seems to trivialise the challenges faced by the youth. By focusing on providing internships rather than creating substantial job opportunities or fostering entrepreneurship, the program fails to address the core problem. It is more a gesture than a solution, leaving the pressing issue of high unemployment largely unaddressed.
The Finance Minister’s focus on women-led development fell short of addressing key issues such as the gender pay gap, job creation for women, tax incentives for savings, and relief from inflation’s impact on household budgets. The SAMBAL scheme, an umbrella initiative encompassing various programs like Beti Bachao Beti Padhao, One Stop Centre, Nari Adalat, Mahila Police Volunteer, and Women’s Helpline, appears to have received inadequate support. In the fiscal year 2020-21, the budget for just four of these individual schemes was Rs 640 crores. In comparison, the combined allocation for these programs under SAMBAL for 2024-25 stands at only Rs 629 crores, reflecting a decrease in commitment to women’s issues.
The Finance Minister and the government have been congratulating themselves on their fiscal discipline and keeping the fiscal deficit in check. However, this situation is a classic example of “operation successful but patient dead.” While they boast of their financial management, the reality is that the common people are struggling with dwindling savings, insufficient funds for investment, and historically low consumption growth. The government’s fiscal prudence has not translated into tangible benefits for the Aam Janata.
The disparity between private final consumption growth, which was a mere 4 per cent in 2023-24, and the overall GDP growth rate exceeding 8 per cent, underscores a troubling disconnect. The government has once again ignored the struggles of farmers; despite harsh measures like internet shutdowns and tear gas to quell protests, the Union Budget fails to address crucial issues like a legal guarantee on minimum support price (MSP) or support for farm loans through waivers or reduced interest rates.
Meanwhile, as billionaires host extravagant weddings and jobless youth face grim prospects, the Budget overlooks the pressing issue of wealth inequality. Although there are initiatives for youth employment, there is no effort to bridge the gap between the wealthiest and the poorest. Despite the economic survey revealing that the top 10 per cent of earners control a third of the income, there are no measures to improve conditions for farmers and laborers or to increase wealth taxes. Additionally, the Finance Minister’s reduction in tax on long-term capital gains (LTCG) from 20 per cent to 12.5 per cent is misleading, as it comes with the elimination of indexation benefits.
This change means that profits from the sale of property, gold, and other unlisted assets will no longer be adjusted for inflation, resulting in a higher taxable amount. Consequently, investors will face a greater tax burden, making investments in these areas less profitable. The Pradhan Mantri Sarkar Bachao Yojana, meanwhile, seems primarily designed to benefit the BJP’s key allies.
The government’s disregard for the needs of the public, opposition, and most states remains evident. Despite its track record of neglecting the concerns of the majority, the continued oversight after the BJP’s underwhelming performance in the General Elections is particularly disheartening. However, there is some optimism that the increased presence and vigour of opposition members in Parliament might foster productive discussions and potential enhancements to the Union Budget in this session.
(The writer can be reached at dipakkurmiglpltd@gmail.com)
