With just a day left for the Railway Budget, Finance Minister Arun Jaitley targetted the Congress for the inflation that has been plaguing the nation, and for putting the government in a tight fix as numerous 'bitter pills' of price rise from the Modi government make the common masses fume with anger.
Jaitley blamed the UPA government and its policies for the tattered condition of economy and the dilapidated condition of the Indian railways. This can arguably be blamed on the Congress, which looked at a more 'populist policy watch' and hence refrained from price hike from an elections point of view. While this can be agreed upon, it was the BJP that brought in the decision of price hike eventually to cover the losses mounted on the railways and to generate funds for other plans (bullet trains, smart cities, etc).
What does he mean?
If we understand his context, Jaitley is clearly displacing all the blame from Narendra Modi and the BJP to the UPA's tattered tenure, where the party tried feasible politics to please voter groups. In economics, it's clearly simple math. If we do not plan and generate funds, development is a long run dream. The overall break-down of the price hike could have been much better had the Congress tried breaking even and not attempting to please everyone.
In this instance, Jaitley held the previous Congress-led UPA government solely responsible for the price rise, saying the party which brought the economy to this state now wanted to put the blame on someone else today. "Even we are concerned about price rise, and hence, we had no hesitation in discussing the issue in Parliament. What surprises me is that the party which brought the economy to this state, wants to put the blame on someone else today," said Jaitley in the Rajya Sabha meeting.
However, as a bone of contention, it can easily be recalled that the BJP, in the position of Opposition, had always attacked the Congress when there was a price rise. The constant 'dharnas' and attacks were highly sensational, and the BJP sold itself as the one-stop solution for everything that was wrong with the Congress.
"I promise that I will leave no stone unturned to accomplish what is being promised, I promise I will never do anything for myself, I will never be vindictive," Narendra Modi had said while promising fulfillment of the said promises.
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The hidden context:
While blaming the Congress, Jaitley managed to take the entire blame away from the BJP for price rise as something that would have eventually happened. With statements like, "The BJP has no honeymoon period," by Narendra Modi, it is clear that the Modi government has been trying hard to work out a methodology to streamline cabinet and decision making processes.
The budget is a litmus test for the BJP to achieve a perfect symbiosis between public appeasement and rewriting India's growth story. If and when the government is able to achieve this is still a debatable topic, but the developments will be interesting to watch. Various rating agencies and experts have been pegging the budget to have hardly anything different from the previous ones as the time allotted to Jaitley for preparing the budget was minimal post Lok Sabha elections.
Also, even if Jaitley blames the Congress, the BJP needs to take a realistic approach to the budget. With railways facing a cash crunch up to Rs 26,000 crore, projects such as bullet trains, which were part of Narendra Modi's manifesto, need funds that will have to come from the masses. Besides, India's Current Account Deficit (CAD) is not showing any great signs of growth nor is inflation subsiding. Add to it, the El Nino predictions and the economy is set for a difficult phase.
Other aspects of Jaitley's statement:
"What is the basis to say that we are responsible for price rise. Our policies have not yet been implemented," Jaitley had further added while defending his party.
Asserting that inflation has risen to unprecedented levels under the stewardship of the BJP-led Government, Congress leader Ghulam Nabi Azad had earlier in the day said prices were never so high when the UPA regime was in office between 2004 and 2014. "If the UPA raised prices, it was done gradually. But, in the last one-and-a-half months, prices have skyrocketed," said Azad during a Budget Session intervention in the Rajya Sabha. "Prices are rising all over India. The prices of diesel, cooking gas have gone up. Diesel affects other commodities. Food inflation has gone from 8% to 9.5% in just a month and half. Rice, eggs, tomatoes, milk, dals, coconut everything is costing more," he added.
The 42-day-long Budget Session of Parliament began on Monday and will have 28 sittings. During this period, Railway Minister Sadanand Gowda and Finance Minister Arun Jaitley will present the Narendra Modi-led NDA government's first Railway and General Budgets on July 8 and July 10 respectively.
The Economic Survey will be released on July 9. The session will end on August 14.
Does market performance indicate a positive budget?
The benchmark Sensex created history on Monday by closing above the 26,000 mark for the first time on hopes of growth-oriented policy announcements in the maiden Budget of the Narendra Modi government. Besides, a rally in technology stocks, led by Infosys, which will kick-start the earnings season for the April-June quarter later this week, also buoyed the sentiments, traders said. The 30-share BSE index after commencing the session above the historic 26,000 mark, climbed to touch a new intra-day record high high of 26,123.55. It finally settled 138.02 points, or 0.53% higher, at a new closing peak of 26,100.08.
So, the question that arises is whether the rallying stocks mean positive budget? For the economy, this may be a green signal, but for the social services sector and projects such as MNREGA, we cannot say the same. The final verdict of the budget is tomorrow.