Budget 2019: Ram Mandir, Not Economics, Will Win You Election, Says Subramanian Swamy
While Piyush Goyal’s interim budget was aimed at shoring up support among voters for the BJP, the ruling party’s lawmaker Subramanian Swamy thinks that’s futile.
Economic announcements and welfare schemes do not ensure electoral win, according to Swamy. Building the Ram temple on the disputed site in Ayodhya will guarantee Prime Minister Narendra Modi a victory in 2019, he said.
I am sure we will get the Ram temple in the next 30 days and therefore public will vote for us in a big way.Subramanian Swamy, BJP MP, Rajya Sabha
No government is voted to or out of power because of bad economics, he told BloombergQuint in an interview. If the BJP government doesn't construct the temple, the party will be voted out of power because it doesn't keep its word, he said.
Swamy said there wasn't much in Goyal’s budget to fix structural problems in the economy but there was just enough to keep the people happy. Swamy was also not impressed with the tax relief offered by the government to small taxpayers, saying constant tinkering with the system doesn't work. Piyush Goyal announced tax breaks for the salaried middle class in the form of a full rebate on taxable income of upto Rs 5 lakh per year. According to him, the government should work on abolishing income tax altogether.
It could be then a straight message that we are working on abolishing income tax in future. If we form the government, we will do it. That would have carried a huge message.Subramanian Swamy, BJP MP, Rajya Sabha
Swamy also criticised the government of its handling of the economy, saying that the people in power did not even know the difference between macro and micro economy. The government was spending too much time on the fiscal deficit when it should, in fact, be spending money on infrastructure to improve operational efficiency in the economy, he said.
Watch the entire interview here:
Edited transcripts from the interview:
What are your first comments on the budget? Will all the promises will be implemented in time to see any kind of electoral gain? There are couple of months left in government’s tenure.
Swamy: I don’t think electoral gains are decided by economic successes. If it was so, then Narasimha Rao and Atal Bihari Vajpayee would have won hands down, but they lost miserably. The strength of their party gone to half of what it was. This country moves by emotions and most countries moves by emotions. The issues which affect them are those which immediately and instantly affect them.
These proposals are good proposals, but they are just a series of proposals and not bound together in terms of objectives, priority and strategies and a clear presentation of resource mobilisation. So, it is unstructured collection of making people happy sort of announcements. I welcome it because we are on the verge of election and it does matter if the mood changes. This budget is lot more acceptable to public than the previous four by Mr. Jaitley which raised alarm in terms of increase in taxes and raising of interest rates. As far as addressing the structural problems of the economy is concerned, there isn’t any such proposal in this budget.
What about the fact that lot of income tax cuts and sops have been promised for next budget? Do you think it is appropriate? Do you think it is correct to preempt the next government whichever it may be, for the July budget?
Swamy: We are confident that we will be the next government. So, there is no question of preempting ourselves. We have that confidence. If you are going to say that something is going to happen in next budget, then you are saying to abolish income tax. That’s easier to do than all the book works of who has got more or less than Rs 5 lakh.
It is now clear that Rs 5 lakh limit is for a rebate only. It may not make too much difference. Do you think more could have been done for this class of Indian citizens and people who are believed to be core BJP voters which is middle-class taxpayers? Do you think there has been disappointment for this section?
Swamy: I agree there is disappointment but there is no such thing as more can be done. There is one thing which can be done which is either abolish income tax or keep it. People are not bothered how much they have to pay justifiably. They feel the harassment which goes with it, the treatment by income tax officers as if we are criminals and you have to prove innocence as you are presumed to be guilty. That kind of harassment is choking people. This has increased, unfortunately, during the four years of Mr Jaitley’s budget.
What needed to have been done today was to announce that we are working towards the complete abolition of income tax and not say about Rs 5 lakh which is like a googly ball coming to you. It does not mean Rs 5 lakh but means something else, all this guessing would not have been there. It could have been the straight message that we are working on abolishing income tax in future. If we form it, we will do it. That would have carried a huge message.
Abolishing income tax was something you were proposing for a while, but BJP has never been on board with it. It is unlikely to be announced in any budget.
Swamy: It is not question of being fair or unfair but question of being an economist and not one. That is what it is. This kind of tinkering with the system will not work. People will soon find out that Rs 5 lakhs limit is not quite what you or we think is the limit. Then the reaction could be that we have been taken for a ride which shouldn’t happen. To be smart, say something that people can understand.
The question is are you going to do something which the people really want. Today, the people want relief from income tax system and not so much from income tax.
There has been an announcement of income support scheme which is Rs 6,000 a year. Rs 2,000 will hit beneficiary accounts before the next elections. Do you think it is enough? It has been called pittance as it works out as Rs 17 a day.
Swamy: Besides that, the question is who the farmer is. 40 percent farmers are tenant farmers and they don’t come in the list of farmers. Those who have registered among them, 60 percent, are living in the cities working on something else. This is bureaucratic increases. Why should government get into all this work? Government should be doing large-scale infrastructure. They should be dealing with issues which are macro in nature. This kind of micro arrangements with help of bureaucracy will never work. They may find out that Rs 17 might be taken away by bureaucrats as fees for clearing your farms on this regard.
What is your reading of handling of the fiscal deficit? Fiscal targets have not been met for yet another year. Do you think this government’s handling of the economy has been correct?
Swamy: I never thought, from Day 1, that government was handling economy correctly. They didn’t even understand what the economy was and how it can be moved. I don’t blame them as they are not trained for this sophisticated nature the economy has now become. They can’t even make a distinction between macro and micro economy.
I will not look at fiscal deficit. It is inane concept as we have borrowed it from the International Monetary Fund, and it is bunch of bureaucrats who say all kind of things and pass on new idea. I look at it is the budget document which says where has the rupee gone and coming from. Please see it. If you add up the interest payments due which is amortisation which includes the principal amount also, and the amount you are getting as new loans, I don’t think every rupee you are getting as new loans, you are paying away for past amortisation for which the requirement of amortisation is 98 paisa. So, you are getting just 2 paisa. You are heading for a dead trap and that will come in one to two years and you will have first-class crises. Then on top of it non-performing assets of public sector banks are still not being resolved. You have postponed the idea. You have credited some institutions by which this is not immediate problem but ultimately you have to solve the disease. That has not been done.
I would rather look at it. I don’t think about deficits if the money is spent on infrastructure, producing goods, creating new marketers where traffic can travel very fast where you can reach from villages to docks of shipyards, if you can minimise the time instead of taking seven days for your ships to turn around or three days from Pune to docks of Bombay, if you reduce all that, then it will make a difference. So, focus on macro aspect and not on these handouts.
How big an issue will jobs will be in this election? Do you think it was a mistake to not release those figures?
Swamy: Yes, it was a mistake to release what you considered to be a correct figure. If you have a doubt, the bunch of experts who you have hired have made a mistake or they have not taken factors into account. Then you give a dissent or introductory note to say that these things are not acceptable, and this is what the expert say. We once had a debate on how many people are below the poverty line and it was resolved that way. You should have a public debate on it, and I am in favor of it.
The unemployment has been rising since the first four years of NDA rule when Raghuram Rajan kept on increasing the interest rates. Everyday micro small and medium enterprises were collapsing and that’s where the bulk of employment was. The informal sector has the bulk of employment which is 65 percent. Everyday they were getting unemployed. Some of them were taking jobs which was not even equal to their minimal qualifications of skills and they were doing manual work. I am not surprised that unemployment is at all-time high.
You have to lower interest rates. You have to make access of loans to MSMEs in a major way and make it easy. The paperwork on mortgages should be simplified. That is the way to go about it. I am not surprised it is increasing. This is not our policy. We have copied this policy from United Progressive Alliance.
This survey from 2017-18 is showing demonetisation effect. We must talk in context of demonetisation. It is underlying the downside and impact of demonetisation.
Swamy: I am saying this from Day 1 that demonetisation is not going to work. It is a good concept but there is no preparation for it. It caused a huge unemployment problem.
Then why should people vote this government again to power?
Swamy: No government is voted on power or out of power because of bad economics. I have seen Narasimha and Vajpayee being misled. Vajpayee advanced the election by 6 months thinking that India was shining and people will vote.
People are emotional. They voted for us largely because not that we will do good economics but because we will build Ram temple, we will give new identity to Hindus, we will teach Pakistan a lesson, we will unite Hindus and such number of emotional things.
And also, we will fight corruption. The only person who has fought corruption in the last five years is me. The government has done very little to fight corruption. Recently, we have seen some activity on it. But that is after protecting the corrupt for the last four and a half years and slowing down every process.
If there is anything which will get us majority then it is Ram temple. I am sure we will get Ram temple in the next 30 days and therefore public will vote for us in a big way.Subramanian Swamy
What is your opinion on chances of Modi government returning to power?
Swamy: I always give honest opinion. It will be routed if we don’t build the Ram temple this time.
Do you think Modi’s popularity is intact or dipped? Where do you see his popularity level at the end of five-year tenure?
Swamy: You can have a personal popularity. Winston Churchill was hugely popular in 1946. But the British voted him out. They said I don’t think your party is right for peace but salute to you for what you did for us.
In the same way, if they vote us out then it is not because Narendra Modi is disliked but it will be because the party didn’t keep its word. I don’t think there is any erosion in Narendra Modi’s popularity.
Do you think there is risk of Mr. Modi being voted out?
Swamy: If they don’t make Ram temple, we are all voted out and not only Narendra Modi.