India's unusual election-year budget reveals Modi's extreme confidence

India’s unusual election-year budget reveals Modi’s extreme confidence

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February 5, 2019 (Reuters) – Despite the impending general elections, India’s finance minister unveiled a strict budget last week, demonstrating the administration’s unwavering belief that Prime Minister Narendra Modi will win a third consecutive term in office.
In lieu of the customary election-year populist policies, Nirmala Sitharaman prioritized fiscal restraint and reduced fuel, fertilizer, and food subsidies in her interim budget.

Unusual election year budget in India signals Modi's sky-high confidence | Reuters

A larger-than-expected fiscal deficit resulted from Modi’s government’s announcement of direct cash support of 750 billion rupees (approximately $10.5 billion) for impoverished farmers, an extension of income tax exemptions to more people, and various other benefits in the interim budget before the most recent general election in 2019.
However, Sitharaman left little room for doubt as to who she expected to return to deliver the entire budget following the elections, which are scheduled for May.

“Our government will present a detailed roadmap for our pursuit” of a developed India by 2047, she said, in the July full budget.
Ahead of the election, the ruling Bharatiya Janata Party (BJP) is feeling very confident because Modi has fulfilled a number of nationalist promises meant to appease the nation’s majority Hindu population as well as highlight the remarkable economic progress of the nation.
Vice President of the party Tariq Mansoor stated, “The BJP will do very well because people have confidence in the prime minister and there are so many other factors like the economy.”

Analysis-Unusual election year budget in India signals Modi's sky-high confidence - 2024-02-04 | MarketScreener

From being the tenth largest when Modi entered office ten years ago, India’s GDP is currently the fastest growing among major countries, ranking fifth in the world.
However, rather than in the vast hinterlands where more than 60% of India’s 1.42 billion people reside, growth has been concentrated in urban regions. Critics have pointed out that the party suffered a shocking defeat in the 2004 general election as a result of similarly uneven growth.
However, the majority of analysts believe that there is no prospect of a surprise in this election and that Modi, 73, would easily win a rare third term in government.

They cite several factors, including Modi’s strong popularity, his successful execution of social programs like providing free food to 800 million underprivileged people, and the BJP’s Hindu constituency being energized by the building of a massive temple on the site of a demolished mosque. They went on, “The opposition is in disarray.”
“Unless there is some Black Swan event in the next three months or so, which is very unlikely,” Yashwant Deshmukh, founder of the polling firm CVoter Foundation, stated, “there will be no repeat of the 2004 debacle.”

“It’s not only because of the economy but more importantly that he has delivered on emotive issues for the cadre, the rank and file of the BJP, and at large the Hindutva (Hindu right) vote base.”
While a fresh survey is being conducted by CVoter, Deshmukh stated that “numbers are suggesting that they are going to get a majority on their own very easily at this point in time.”

The BJP-led National Democratic Alliance coalition won more than 350 of the 543 directly elected seats in the decision-making lower house of parliament in the 2019 election.
“We are looking at beyond 400 for the alliance this time,” the BJP’s Mansoor said. That number would give the coalition more than a two-thirds majority in the legislature, which will allow it to bring in changes in the constitution.
Harsh Mander, a human rights worker and political columnist, said the budget was an indication of the government’s thinking.
“Normally a pre-election budget would have a certain kind of last-minute set of promises,” said Mander, who has been critical of many government policies.
“The fact that they don’t feel the need to do that, asserts a high level of confidence that their policies, not economic policies but their social policies of basically Hindu supremacy, will trump whatever discontent is there.”
Modi’s current government has already delivered on two of the BJP’s long-running promises: building a temple on the site of a razed mosque in the northern city of Ayodhya where many Hindus believe the god-king Ram was born, and removing the autonomy of the Muslim-majority region of Jammu and Kashmir.
The consecration of the Ram Temple last month, overseen by Modi, sparked unprecedented nationwide celebrations.
The main opposition Congress party said the government had failed in its promises to double farmers’ incomes by 2022 and create millions of jobs every year. But the party’s INDIA coalition has been badly hurt by the defection of a major regional leader to the BJP alliance last month and it has yet to formulate an effective counter to Modi’s muscular pro-Hindu agenda.
Elara Capital analysts said the budget deliberately steered clear of any major announcements “in a studied step to showcase confidence as regards a re-election encore”.
Modi himself has also not disguised his confidence.
“In my third term …,” he said in a speech to business leaders on Friday before being interrupted by claps and chants of “Modi, Modi”.
“A word to the wise is enough,” he said with a smile when he resumed. “In my third term, our country is bound to become the third-largest economy in the world.”

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