Wednesday, 2 March 2016

Outed comrade and cow question

New Delhi, March 1: Arun Shourie had famously described the Narendra Modi government as "Congress plus a cow".

After yesterday's general budget, a subtle modification may not be out of order: comrade plus cow.
The symptoms were always there.

A now-mothballed proposal to build a Rs 18,000-crore steel plant in the public sector, reminiscent of the commanding-heights dream.

 Reluctance to resurrect the divestment ministry that was sired by the Atal Bihari Vajpayee government and buried by the UPA.

The Prime Minister equating farm subsidies with industry incentives at The Economic Times summit in front of a host of industrialists.

Taking over troubled tea gardens in Bengal.

If anyone missed the symptoms, yesterday's general budget proclaimed the diagnosis loud and clear: being Left is in the DNA of the Narendra Modi government.

The big question is now that the Modi government has come out of the closet, whether it will pursue the political-economic agenda or allow the bovine brigade to continue to run amok.

Some analysts have described the new budget as "soak-the-rich budget" - an appellation that found some legitimacy from the fact that the government failed to lower corporate tax as promised in the last budget but did not desist from taxing the rich more.

Last year, Jaitley had said he would cut corporate tax from 30 to 25 per cent in the next four years - and said this would be linked to a sharp cutback in tax exemptions that industry receives.

Even while justifying the reformist but unpopular tax on provident fund withdrawals, the government today said it would mostly affect "highly paid" employees of the private sector, making it clear where its sympathies lay.

Some leading lights of the erstwhile UPA are said to be describing the budget as "UPA 3" in private but BJP leaders insist Modi has always been "pro-poor" and then sheepishly refer to what must rank as the last word on the subject.

These leaders point to the Left-leaning Economic and Political Weekly that has consistently traduced the RSS and the BJP for their ideological persuasion.

The February 6 issue carries a piece titled " Har Khet ko Pani? (Water for every field?) Madhya Pradesh's Irrigation Reform as a Model".

It commends the governments of Madhya Pradesh (headed by BJP leader Shivraj Chouhan) and Gujarat (used to be headed for several years by Modi) for their policy of pursuing agricultural growth through irrigation development as a political strategy for "capturing agrarian vote-banks rather than rent-seeking" without being accused of irrigation scams.

The EPW article says: "Modi's agrarian success in Gujarat was unparalleled. But Chouhan, who took over as chief minister after Modi in Gujarat, has outdone even Modi in accelerating irrigation benefits."

The article advised Prime Minister Modi to emulate his and Chouhan's irrigation templates.
The reference to the EPW was one of the BJP's ways of contextualising the social and political significance of the new budget presented by Arun Jaitley yesterday.

BJP ministers and officials claimed that unlike the last two budgets, Modi micro-managed yesterday's exercise to the same degree as Jaitley.

"Even the EPW has praised our governments. Rural development was always on top of the PM's agenda," said BJP general secretary and Rajya Sabha MP Bhupendra Yadav but remonstrated about the Left link.

"What is Left about the BJP and its leaders? Our fundamental philosophy is based on Deendayal Upadhyaya's (Jana Sangh ideologue) concept of 'antodaya' (serving the last person waiting in the queue) and the budget is within that framework. We are Antodayaists," Yadav said.

BJP spokesperson Sudhanshu Trivedi explained: "Yes, the Congress tried to label our government pro-corporate. But if you see from day one, from the PM's first Independence Day speech in Red Fort, the issues he raised were poor-centric, whether it was the Clean India Campaign, the Jan Dhan Yojana or Beti Bachao, Beti Padao. Who needs to be encouraged to make their daughters study? Not a rich person but the poor."

But a BJP minister conceded in private that the need to highlight the government's "pro-poor" thrust acquired greater urgency after the Delhi and Bihar election routs.

"Unfortunately, Modiji came with the tag of 'friend of industry'. Maybe the aspect of Gujarat Shining, projected in the grand Vibrant Gujarat summits he hosted, added to the perception. His publicised foreign visits, the diaspora shows and the monogrammed suit he wore (during President Barack Obama's visit to India, which triggered the "suit-boot ki sarkar" jibe from Rahul Gandhi) damaged him even more.

"Nobody writes about it but the damage correction began when he discarded his suits when he travelled abroad, except when they were absolutely required. He kept industrialists at arm's length and refused to meet them except strictly on a professional agenda," the minister claimed.
For instance, a business magnate, considered close to Modi, got habituated to checking into the very hotels the Prime Minister stayed in on his overseas trips. After Modi's aides took note, the businessman was told off.

However, when Modi's supposed "correctives" went unnoticed, he did what he thought he does best: speak to the people directly.

On January 29, the Prime Minister had declared at The Economic Times summit: "When a benefit is given to farmers or to the poor, experts and government officers normally call it a subsidy. However, I find that if a benefit is given to industry or commerce, it is usually called an 'incentive' or 'subvention'. We must ask ourselves whether this difference in language also reflects a difference in our attitude? Why is it that subsidies going to the well-off are portrayed in a positive manner?"

Modi went on to quantify the "subsidy" for industry at a little more than Rs 62,000 crore in 2014-15 - which is an estimate of the revenue that the government had to forego because of a range of incentives and tax breaks that it extends to nurture productive investments in the private sector.

In the latest budget, the government has announced that it plans to cap accelerated depreciation at a maximum of 40 per cent from April 1, 2017. Accelerated depreciation has spurred investments in renewable energy projects like solar and wind power which have been allowed to depreciate machinery by as much as 80 per cent and, as a result, pay lower taxes. By halving the rate of depreciation, the government has delivered a blow to these businesses.
The government has not come out with its usual "statement on revenue foregone" along with its budget documents this time. So, there is no way of knowing how the change in the tax exemptions will impact revenue earnings of the government.

A day before the budget, speaking to farmers in Uttar Pradesh, Modi had hammered away on this point more emphatically. "What is my dream? My dream is that by 2022, when the country celebrates its 75th Independence Day, farmers' income should double."

The Centre's nightmarish experience with unsuccessfully pushing through the amendments in the Land Acquisition Act, blocked by the Opposition for being "industry friendly", left Modi "rattled" - possibly why the "Garibi Hatao" theme (originally associated with Indira Gandhi) is being replayed.

Will the Centre's effort to get the BJP back on the "development and governance" track take off, especially when in the past such attempts were quickly deflected by the motor mouths and hotheads?

"The PM and the BJP are clear that everyone needs to speak on the government's policies only and not air all kinds of opinions that polarise society," said Union minister Prakash Javadekar.
Till now, there is little evidence that the message had been delivered sternly and it had percolated down the ranks.

On the JNU controversy, too, the Centre has been steadily hardening its stand. Post-budget, a clue to any change may come when the government shows its hand on how it deals with the privilege motion against HRD minister Smriti Irani.

This New is Originally Posted on THE TELEGRAPH

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