Eco-political budgets

Finance Minister Nirmala Sitharaman presented her seventh union budget for the year 2024-25 on July 23 in Parliament, outlining nine priorities aimed at stabilizing the nation’s economic trajectory. This budget, coming on the heels of the recent Lok Sabha election result which was a mandate against the Modi:2 government and so, the budget appears to be an attempt at course-correction. The election outcome sent a clear message to the government about the political cost of denial and necessitated substantial revisions in its approach. Critics have labelled the budget as “lacklustre” and “politically-motivated,” suggesting it aims more at consolidating the government’s alliances than addressing systemic issues. Major proposals include substantial allocations for irrigation projects, with Rs. 11,500 crore earmarked for accelerated initiatives. These projects span several states, including Assam, Himachal Pradesh, Sikkim, and Uttarakhand, focusing on building new barrages and tackling river pollution. Bihar, notably, received a significant portion of funds for flood management, indicating the Modi government’s recognition of the pressing need to address structural issues such as high youth unemployment, persistent inflation, farmer distress, and the struggles of MSMEs and middle-income groups. These long-standing issues have finally caught the government’s attention, prompting critical action. However, the budget’s welfare implications remain under scrutiny. Critics argue that the government’s approach to welfare, characterized by seasonal, temporal entitlements aimed at electoral gains, undermines the credibility and legitimacy of the Indian fiscal state. This approach raises questions about the government’s vision of a ‘developed’ India as part of its Viksit Bharat 2047 plan. To some, this vision appears as another episode of rhetoric by those in power rather than a genuine commitment to long-term development. While the Union Budget 2024-25 aims to promote macro-growth and fiscal stability, it fails to address the welfare needs of the poor adequately. The success of the new schemes hinges on the effective implementation of policies—a notable weak point in the government’s history, given its track record of delayed publicly invested projects. Moreover, the budget does not sufficiently tackle underlying economic issues like inflation or ensure equal access to resources necessary for human capital development.The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, appears to continue favoring large corporate houses that drive stock market performance, projecting an illusion of economic growth. This approach, while boosting market sentiment, neglects the broader, more critical aspects of equitable economic development.It is imperative that the Union Budget is crafted with clear guidelines that prioritize financial assistance based on merit rather than political interests. The current budget’s inclination towards corporate benefits raises concerns about the government’s commitment to addressing the pressing needs of the wider population, including issues such as high youth unemployment, inflation, and the struggles of MSMEs and middle-income groups.To navigate these economic challenges effectively, India needs an independent body that combines the strategic vision of NITI Aayog with the systematic planning approach of the erstwhile Planning Commission. Such a body could provide balanced, merit-based recommendations, ensuring that financial assistance is directed towards genuinely deserving sectors and initiatives.The creation of an independent advisory body would help in formulating budgets that truly reflect the needs of the nation. This body would ensure that economic policies are designed and implemented without undue political influence, fostering a more inclusive and sustainable economic growth model.