Budget 2018 Versus Rajasthan Polls: A Virat Stand-OffBloombergQuintOpinion
The first of February had been a knuckle-duster news day so far. The Modi government’s last budget had ended in a stock market loss. And, the Bharatiya Janata Party had been routed in its Rajputana citadel. The editors trooped into the newsroom with an urgent spring in their steps.
The business editor, Mr. B, had always looked forward to this evening ritual on Budget Day. He loved the sense of power it gave him. Virtually the entire white turf of Page One was his fiefdom. In fact, his rival-cum-peer, the political editor Mr P. often skipped this meeting, especially if someone was kind enough to offer him a couple of gin-and-tonics at the Press Club.
Mr B. was, therefore, a bit surprised to see Mr. P stride purposefully into the editorial meeting, notebook in hand.
Mr. B: What gets you in here, my friend? Today’s all business.
Mr. P (leaning forward aggressively): Are you kidding me? Have you seen how Congress has taken BJP down in Rajasthan? Honestly, your budget is one damp, predictable squib. But what’s happened in Rajasthan is an incipient political earthquake. I need this story to be in the top drawer on Page One.
The two editors tried to stare down each other, but neither blinked. This was going down to the wire. Inspired by the over-dramatised controversial film they had seen together over the weekend, their two deputies suggested a duel, Khilji-Raval style, on which event was more newsworthy. Each editor would trot out three arguments, and his adversary would try to shoot those down. The winner would get front page play.
Mr. B: This budget has launched Modicare, arguably the most daring and ambitious healthcare plan on this earth. Half a billion beneficiaries covered up to half a million rupees in hospitalisation expenses every year. That’s nearly a trillion dollars of health coverage in a two trillion dollar economy. It takes courage just to conceive of such a plan, forget about the enormous state energy and capacity that will be required to implement it.
Mr. P: “Launched” did you say? Whoa, this one is the grand dame of ‘jumlas’. All they are doing is setting up a committee to design the plan.
In fact, the targeted date of commencing this scheme is April 1, 2019 — which, besides being All Fools Day, is also when the Modi government will be in the thick of re-election. Just forget it.
The chatter among the editorial staff made it clear that Mr P. had won this one.
Mr. P (going in for the kill): But in Rajasthan, something unprecedented happened after three decades. An incumbent government lost a Lok Sabha by-poll in the state for the first time. Not from one but two constituencies. Real history was made in Ajmer and Alwar, while only a rhetorical plan was offered in the budget. This one you’ve got to give to me.
Mr. B (uncomfortably): Ok, but what about the bold Minimum Support Price announcement? After Rabi, now even the Kharif crop will attract a 50 percent profit margin over the cost of production. Surely that’s revolutionary!
Mr. P (gleefully pouncing on the last word): Aah, surely that’s inflationary, my friend! And by the way, did the government spell out the mechanics of this “revolutionary” measure? Will the 50 percent be over C2 or comprehensive cost of production including imputed rent and interest on owned land and capital, or A2+FL, which includes input costs plus the imputed value of family labour. It would be “revolutionary” only if computed over C2, but then, where’s the huge budgetary provision for that? Have you heard what experts are saying? One says “this is a farce. They’ve not been able to do it for the Rabi crop too”. Another says “I have yet to see one crop whose MSP has been raised 1.5 times”.
Worse, only 6 percent of farm produce is bought under MSP, so even if this highly contentious effort is successful, it will do nothing for the 94 percent.
This is another dud, my friend.
Mr. P (relishing this now): Against this blank, see the significance of Ajmer and Alwar. Both were massive 2014 BJP victories over Congress heavy hitters. Sachin Pilot was whipped by 1.72 lakh in Ajmer, and Bhanwar Jitendra Singh was walloped by 2.84 lakh votes in Alwar. Now see what a violent turnaround has happened in just four years — Ajmer lost by 84,000 and Alwar by 1.96 lakh votes! Do I really need to say more...
A suppressed “no” from the collective behind said it all. The score stood at 2-0.
Mr. B (disheartened, but without giving up): But see the big sweep of the budget. New taxes on long-term equity gains, cut in corporate taxes, government stepping in to pay the provident fund for new hires, no reduction in defence spending, increase in customs duties to...
Mr. P (cutting in abruptly): Hah, increase in customs duties on fifty items, doubling of the peak duty to nearly 20 percent — how does that sit with the Prime Minister’s aggressive pitch at Davos against protectionism?
This is easily the most protectionist government in the last 25 years, even as we go strutting on the world stage to keep trade lines frictionless.
Also Read: India’s Protectionist Turn
What a credibility mess. And do you know the oil subsidy provision has not been revised despite prices rising nearly 50 percent over the last year? Is that sensible book-keeping? I can go on and on, but there’s no reason to do that. I am only asking for a few prominent column centimetres on Page One, no more.
Mr. B was clearly on the back foot, hesitant and defensive. Mr. P moved in with his KO punch.
Mr. P (softening his tone, mimicking a benevolent victor): Finally, my friend, have you seen some of the psephological projections? If this negative 20 percent swing were to persist, Congress would win 140/200 seats in the Rajasthan Assembly. Compare that to BJP’s unassailable 163/200 today, and you will feel the tremor of the impending political earthquake...
Mr. B was ready to give in. But before he could say “yes, let’s keep the top right-hand lead for Rajasthan”, Mr. S, the sports editor, burst into the room.
Mr. S (excitedly): Guys, Virat Kohli has just slammed a century, and India is set to break their Durban Duck jinx. We will win our first one-day match there. Yoohooo! I will need a quarter of the front page tomorrow, with pictures, graphics and Anushka’s Instagram posts...
Neither Mr. P nor Mr. B nor Mr. S was now in any doubt about which was the most significant bit of news in tomorrow morning’s headlines.
The ‘virat stand-off’ had ended.
Raghav Bahl is the co-founder and chairman of Quintillion Media, including BloombergQuint. He is the author of two books, viz ‘Superpower?: The Amazing Race Between China’s Hare and India’s Tortoise’, and ‘Super Economies: America, India, China & The Future Of The World’.
Corrects an earlier version that misstated the number of times Sensex declined on the day of the Budget.