Budget 2016: Modi's new economics can ruin Congress's remaining political assets

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The Union Budget this year was a break from the past for it stressed the mantra of 'Back to the Basics'. There were expressions of displeasure about Union Finance Minister Arun Jaitley not raising the income tax exemption limits or imposition of partial tax on provident funds, but yet the Narendra Modi government did not hesitate to give primacy to the rural sector, which is in a vulnerable state and could collapse any time.

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The Budget, through its pro-rural and pro-agriculture message, also hinted at the politics of reaching out to the grassroots by Prime Minister Modi, a strategy which can't be overlooked at any point of time in the Indian set-up.

Farmer


Modi's grassroots experience came handy in reading the situation

Particularly ahead of elections in a number of states where rural votes have a substantial say, Modi, a grassroot politician who has worked closely in the agricultural sector as the chief minister of Gujarat in the past, could sense in the focus on the rural sector, the opportunity to check the Opposition's routine attack on his government as pro-rich and pro-corporate.

His finance minister, hence, went on for an image makeover, bothering little about the temporary affect on the stock market. The change in strategy was also evident in the go-slow mantra on the promised cut in corporate taxes.

Jaitley did not take a populist route to cater to the rural sector's needs

Jaitley, however, did not dish out freebies even while focusing on the rural sector. Investment in the countryside infrastructure, doubling the farmers' income and raising allocation in the rural job scheme were pillars of Jaitley's pro-rural approach in this Budget and they are expected to boost the bottom-up demand and help the economy overall. It was one of those rare occasions when both the politics and economics found themselves on the same side of the spectrum.

Modi will not hesitate to beat the Congress where it still has some hope: The rural sector

Whether these would really help the rural sector is for time to tell but by going back to the basics, Modi also made it clear that he would not hesitate to take the wind out of the Congress's sail. 

Modi's experience as a grassroot politician helped him find an opportunity

 

The latter has been a party with a strong rural base and even today when its support base is eroding fast across the country, it caters to the rural sentiments through ideas like the MGNREGA. Modi and his BJP, are seen more as an urban-centric leader and a party, and had a lot to gain in the non-urban sectors of the nation to emerge as a true national party.

Through this Budget, Modi made his intentions known and if the NDA succeeds in delivering on its pro-rural financial plans, the Congress will have a serious challenge to whatever political capital it still has. The regional parties will not be at peace either.

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