DNA Edit: Break from past – FinMin has shown we need economics, not lyrics

Those wondering how finance minister, Nirmala Sitharaman, would fare with the Union Budget, have probably got their reply by now. She certainly represents a break from the past. Union Budgets have a set ritual. The customary photo-op with the red, leather briefcase, with finance ministry officials in tow, manufactured expectations ‘leaked’ generously to the media and the thumping of tables by MPs each time the finance minister announces an increase in outlay. The protests too are customary; no Opposition leader worth his or her salt has a good word to say about the Budget and the reactions are predictable to the last groan. If Nirmala had not announced the tax hikes on diesel and petrol, the 2019 Budget exercise would have broken entirely from the past. 

Abandoning the briefcase for a red, cloth-bound ‘bahikhata’, Nirmala has tried to prove that a Budget speech is not an accountant’s charter. Having received a resounding mandate, the Narendra Modi government attempted to use the Budget speech to underline policy orientation and the broad allocation of resources to meet the objectives. If there was nothing terribly dramatic about them, it was because the broad contours of this approach had already been underlined during the arduous election campaign. Housing for all, drinking water, electricity and sanitation for all and a proud, resurgent and globally relevant India—these have been the Prime Minister’s pet themes — themes that have swept him back into power. To Nirmala’s credit, she repeated these vision statements without the traditional flourishes. 

Understandably, therefore, there were no significant tax increases, tax cuts or new flagship projects. What came from the low-profile finance minister were a set of clarifications and elaborations of the existing policy. But then, that is what her boss wanted. Modi has been in the office for a little more than five years now and right since he took over, he has treated his term like a 10-year project — notwithstanding sniggers from the chattering classes. The flight path was charted in 2014 and barring mid-course adjustments, he has had no real reason to move away from the route. Therefore, it would be fair to say that the policy approach is not just in the continuum, but also essentially incremental. Disinvestment may have been initiated by the Atal Bihari Vajpayee government, but it was also shored up by the Manmohan Singh regime. 

As for welfare programmes, they were begun in a big way by Indira Gandhi and since then, have been persisted with in varying degrees by successive regimes. Nirmala, has demonstrated that her style is understated. On India achieving the $5-trillion economy status, she candidly told journalists that “Unrealistic expectations can never be built on, and revenue generation has only been at a very decent level of 9% and 7.9% in both direct and indirect taxes respectively.” It is typically this approach that finds its way into her Budget speech. She has demonstrated that economics, and not lyrics, is needed for the country’s most important economic document.