Year after year, it is fun for journalists covering budget presentation in Parliament to watch the see-saw of the Sensex as the harassed Finance Minister reads out the financial horoscope of the nation that he has prepared with so meticulous a care. There are at first shouts as the horoscope is unrolled and then the sighs. It could be the reverse also, the sighs first and the hurrahs later. What finally counts is the reaction after the whole picture gets clear.
Last Monday, we saw a lot of the early downtrend in the Sensex and then up and then down and then up again. But comparing what used to happen on Day 2 by which everyone has had time to listen and analyse the full budget speech, most commentators have found that this time, the stock market index rose by 777 points and was, as described by most newspaper reports, “the single day gain for the index in terms of points since 18 May 2009”. It was also the “highest in percentage terms since 20 September 2013.”
Such rise, as the market cheers the current Finance Minister Mr Arun Jaitley, must be seen in the backdrop of what the depressing climate was for the stocks worldwide in the last several years with economies almost everywhere in downward spin. Worst, in the case of Japan where they were even considering printing the currency and dropping it from the sky to revive demand and the economy or in Europe where GDP of the Eurozone nations was creeping but refusing to climb or in the US where a two-point rise would mean opening the cork of the Champaign bottle.
With a 7 to 7.5 per cent GDP forecast in Mr Jaitley’s third and crucially placed budget, every Indian could proudly claim that our country today has the highest growth rate in the world. Also in the context of worldwide stagnation and recent dramatic developments, with China acting as the proverbial beast in the china shop with its devaluation of its currency that brought forth a storm in the financial markets, India’s rupee rose closing on Tuesday at 67.87 per dollar. The analysts earlier were bracing up for a fall to `70 a dollar! Cheers again.
Such backslap for the Finance Minister from the financial circles though welcome, is hardly the stuff he should be looking for in our country where still 50 per cent of the workforce, that is some 600 million, has to labour on the farms to make both ends meet. Two successive years of drought have depressed agriculture and agri-GDP growth is nowhere around the four per cent needed merely for sustenance. With even farm product exports that once reached the 40 billion dollar line per year now falling in response to worldwide stagnation, the farming community has been pushed into distress with some even driven to suicide.
Three cheers for Mr Jaitley and his colleagues in the NDA Government for responding boldly to the grim scenario in the farm sector. Only a self-confident and visionary Government would have declared in Parliament on Monday that in five years, the budget would double the income of the Indian farmer. Remember agricultural sector of the economy was growing at a miserable 1.2 per cent in the context of two successive droughts. No frank analysis of the farm sector would be relevant without looking at the past 60 years when the then ruling Congress kept the rural population tied to farming as the only readily available occupation for the 70 per cent of the country’s population. The bulk of the villages were without electricity and therefore, without small and medium industries dotting the countryside. When the Congress talks of its so called pro-poor policies, it should also accept responsibility for the permanent agrarian depressed state.
The high farmer suicide rates in many parts of Congress-ruled states tell their own story of how the poor were largely kept pinned down to their tiny piece of land that is too uneconomic to support any livelihood by agriculture. The irrigation perspective spelt out in the NDA budget should be read in the context of how water was yet another area of scandal along with other scams in telecom spectrum, coal mine allocation, the Commonwealth Games spending etc during the Congress-led regime. During the Congress rule in Maharashtra, irrigation had been a long-term get rich quick means for its leaders along with their partners in the game, the NCP’s sugar plus irrigation bosses. Most of the irrigation projects especially in Vidarbha area have seen works in progress for as long as 35 years. The game changer now is going to be the NDA government’s determined move to revive and fast-track 23 of the 89 stalled irrigation projects in one year and the promise of adding eight million hectares in four years.
This programme has been described as “remarkable” especially in the same Vidarbha, the cotton belt of India, where the two partners in power, the Congress and the NCP made irrigation a convoluted means of personal enrichment and power grabbing during their time in government.Apart from farm sector, the other area of focus in the budget is the mid-rank entrepreneurs like the SMEs and the start-ups. The offer that the Government will pay the EPF contribution of the employers for three years and the institutional arrangement for start-ups to stand on their feet and fight the battle for new profitable ideas comes against the backdrop of changing economics in the global scene of stress at big corporation level that has seen stressed loans and banks caught in the burden of NPAs. A new India is emerging, an India of young men and women who can turn ideas into enterprises and enterprises into ideal employers forcing the Marxist class conflict ideologues to revise their understanding of history. What the BJP economic policy, so impressively explained in the first few paras of Mr Jaitley’s speech, does is to connect the farming sector and the enterprising sector of people into a synthesis that stands to transform India.
The doubling of farmers’ income will generate the necessary demand push for enterprises to rush for responding by creating or expanding market leaders at every level and the big spending on infrastructure will draw out labour from the farms to construction sites. This should prove the burial ground for the 19th century ideas of class conflict of the Left and the caste conflict platform of the Indian socialists. Equally, it challenges the Rahul Gandhi-led poor feeding, by promoting the poor and the unskilled to learn and earn in the place of waiting for hand outs from the Congress’ scandal-ridden table.
The author is a Rajya Sabha member and political commentator. Email: firstname.lastname@example.org