Impact of Budget 2018 on Indian Politics

Is it true that every final Budget of a government has always targeted what voters want? As budget speech always an indication of a political message by the ruling party, the Finance Minister appeared to have pleased the rural masses and the farmers in particular. The political impact of the Budget 2018 is discussed here.


The Budget 2018-19 presented by the Indian Finance Minister on 1st February 2018 in the Lok Sabha has pleased some but disappointed many. The salaried class was waiting for the announcement of better Income Tax concessions but unhappy with the little share of the reintroduction of Standard deduction component while assessing the IT as it was a replacement cost of the Transport allowance and Medical allowance rebates.

The Gujarat assembly elections held recently were an eye-opener for the BJP and other political parties. Everyone expected a massive victory for the ruling BJP led NDA but their failure to cross the three digit mark was a clear reflex of farmer angst and the anti-directional wave of the rural masses that catapulted the ride of victory of the BJP by making up the rural vote deficit in urban areas. Perhaps, the slight edged victory might have made the Government to take a note of the rural thrust in the last full Budget presented by the Finance Minster on 1st Feb'18. The claim of the opposition that acceptance of rural distress made the ruling front to take immediate damage control measures.

Key elements of the budget

A fair analysis of the Union budget would reveal the political strategy of the Government with whispers in the corridor that the next general elections would be rescheduled before the due date. Few measurements on agriculture, rural economy, education and healthcare were taken care in this budget giving more emphasis in these sectors. The absence of any relief for the salaried and middle-class which is considered as one of this government's staunch support base made them more unhappier by slapping with an additional 1% cess.

The union budget prioritized issues and schemes related to women, farmers, youth, poor, and disadvantaged communities. Perhaps the polls in three North-East states—Tripura, Meghalaya and Nagaland and also in the major states Karnataka, Rajasthan, Madhya Pradesh and Chhattisgarh forced the Government to focus on problems related to rural sector.

National Health Protection Scheme that aims to cover 100 million poor and vulnerable families and reach out to approximately 500 million beneficiaries, providing Rs.5 lakh per family per year would be the world's largest government-funded healthcare programme".

The proposal to establish one medical college within the periphery of every three parliamentary constituencies would be welcomed by everyone to have better health facilities.

The allocation of Rs.14.34 trillion in the budget for the rural part aiming at provision of better livelihood and infrastructure for rural areas is another move to catch hold of the Rural masses and banking on their vote share in the upcoming elections.

Salient features of the Budget which could help Rural India

  • The rural and marginalized sections were given priority by the government with a hope to boost the economy.
  • Special mention about building better infrastructure and a hike in minimum support price (MSP) and to sort out the problems related to irrigation facilities.
  • The increase of the minimum support price of all kharif crops by one-and-a-half times
  • Operation Green would be a new project being launched with a fund of Rs.500 crore to boost production of tomatoes, potatoes and onions which would help the farmers to safeguard from any losses due to natural calamities and increase in the production of the commodities.
  • A proposal to introduce schemes for the welfare of the poor and middle class interalia increasing the outreach of the other schemes like Ujjwala to 80 million more women, Saubhagya to 40 million families and building 20 million more toilets under the Swachh Bharat Mission.

Political dimensions

There is a rural distress among the masses and displeasure of the farmers about the incentives they were expecting from the Government. The impact of GST has not left even the fertilisers and the essential commodities required for agriculture. Small-scale industries and the agri-products slowly appear to be losing their ground and they are no more productive for smaller agri-business people. This was visible during Gujarat elections and the Government at the centre has anticipated the likely damage it may cause in the elections 2019. That's why a proper care was taken to help such class of people and this budget is surely pro-poor and well balanced strategic approach to include them in the band-wagon of development under the slogan - "Sab ke saath, Sab ka vikaas".

The alliance between BJP and TDP on a verge of collapse?

Surprisingly there was no mention about allocation of funds for the state of Telugu speaking Andhra Pradesh for whom a special package was promised during the bifurcation of the United Andhra Pradesh in 2014. The TDP-BJP combine won the state assembly elections in 2014 both of them are now partners in the Government at the centre and the state as well. The formulation of NITI Ayog and the decision of the 15th Finance Commission to dispense with the announcement of Special category status to various states made the BJP to move back from its promise of SCS to AP and announce a Special Package in its lieu. Accordingly, the state should have been its due but the Budget allocation for 2018-19 misses the state in its priority except a meager amount allocated for the central funded institutes like IIT Tirupati, NIT Andhra Pradesh and IIM Vizag. This created political tremors in AP and the adjoining state of Telangana and the stage is all set for withdrawal of TDP from NDA.

Political experts think that BJP is trying to make its hold in the South and their association with TDP may not be helpful to gain strength in the next coming General Elections. The MPs from Andhra are already on war path by disrupting the proceedings of the Parliament. If the Union Minister doesn't make any relaxation for AP and announce some incentives, the relations may be more strain some and the alliance is almost on a brink of collapse. While the opposition party in AP is trying to associate with NDA with a condition that they should give SCS for the state which is now in financial doldrums.

Sum up

The intentions may be clear but it would be a wonder if the proposed things get materialised in a short span of time ahead of the next General elections. This budget addresses popular problems but I do not think it is a populist budget. With the AP deadlock yet to be resolved, it appears the Government is spearheaded to face any political challenges without any compromise on its stand. we can see new political affiliations in the coming days, particularly in the states of Tamilnadu and Andhra.

Article by Jagdish Patro
Jagdish Patro is a freelance writer and a regular contributor to ISC and other websites. Fond of reading books, novels and spends his leisure time by listening to music. He did his B.Sc in Applied Chemistry and his M.Sc in Resource Development Technology. He edited and published an in-house monthly journal by name ‘Srujana’ during 2009-2011 which was totally a private circulation.

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