Jaitley’s 'Robinhood' election budget: Take from the rich, give to the poor
The opposition parties were up in arms after Finance Minister Arun Jaitley announced a cut in corporate tax in the previous budget. Congress minced no words in calling the Modi-led government pro-capitalist and ratcheted up "suit boot ki sarkar" jibe all over again.
What does Congress have to say now after Jaitley's budget speech in which the word farmer was used 22 times, and agriculture 15 times. It clearly cannot continue attacking the government using the same old 'anti-poor' and 'anti-farmer' pitch after yesterday's budget.
The Modi government has pitched in a pro-farmer and pro-poor budget keeping in mind the crucial Assembly elections in Karnataka, Madhya Pradesh, Chhattisgarh and Rajasthan this year, and the big battle - the General Election - scheduled in 2019.
Poor and rural voters are both more numerous and in some cases angrier than rich and urban voters, and therefore the last full Budget before 2019 Lok Sabha elections took from wealthy and urban consumers and promised better healthcare, housing, credit and farm incomes for poor and rural Indians.
So from where will funds for Modicare, said to be the largest scheme in the world come from?
The additional revenue from the long-term capital gains tax will help fund Modicare - the Rs 5 lakh per family government-subsidised health insurance scheme for 10 crore poor families.
Top-of-the range phones, pricey items of personal care and entertainment, all these will cost more as import duties go up. This additional revenue will also be used by the govenment to fund the schemes announce din the budget.
After the budget was presented, BJP chief Amit Shah said, "The record allocation to the rural sector and agriculture will lead to unprecedented rural development and agricultural growth. Consistent focus on rural development and agriculture has been a hallmark of our government."
There are no prizes for guessing why the BJP government had to do something big for farmers. In Gujarat, disillusioned farmers had reminded BJP leaders about Prime Minister Narendra Modi's promise of minimum support price (MSP) that would cover production cost plus 50 per cent. The poll-bound Madhya Pradesh also experienced violent farmers' agitation for procurement and higher MSP for farm produces.
But there is one thing the government should be wary of. Higher MSPs may put pressure on food prices and therefore stoke inflation: a possible political risk for BJP.