Budget 2019: Has the BJP done enough to win 2019?
The NDA has been tottering the edge of comfort zone for the last few months. The Budget was supposed to take it over the edge. When one looks at the Assembly elections closely, it is clear that
– Farmers had defected in large numbers
– Labour had defected in large numbers
– Higher/ Middle Income had defected in large numbers
CrowdWisdom’s own 10 City study carried out daily shows very similar trends across the country
So the brief for Mr Jaitley and Goyal was simple
– Defend Farmer Vote
– Defend Labour Vote
– Defend Middle/Upper Middle Votes
The solution has been simple and straightforward
Farmer Vote – Direct Pay out of Rs 6000 per annum
Labour Vote: Increased accident and Pension Coverage
Middle/Upper Middle – Tax Rebate below 5 lakhs
The question everyone is asking, is it enough?
The answer is complex but bear with me
a. Labour – Very clear, not much has been done. Agriculture and Industrial Labour have been left out and form a large part of the voting population. These make up for about 20-25% of voters (Source: Lok Niti). The BJP’s thinking process is simple, amongst low earning members of this group, the whole host of benefit programs (LPG, Toilets etc) will deliver a lot of voters (Women have backed NDA well in the recent State elections). Still, cash in hand is quite different from material benefits.
b. Middle Class Tax payers: There are approximately some 30 million households or probably about 70 million voters in this segment. They make up for about 12-15% of the voters. This segment should be reasonably happy given that the rebate is almost like a salary increment. Can they be tempted with other allurements, the answer is YES but it is unlikely that the Opposition will spend sparse resources here. They will take what they will get. This is going to be a walk over for BJP
c. Cultivators/Farmers: By Deliberately targetting the below 2 hectare group, the BJP has directly addressed its constituency – MBC and to some extent SC and ST Voters. This group would easily make up for about 20% of the voters. However, at Rs 6000 per annum (while it makes up for as high as 20% (Source: Crisil)), the amount itself is significantly smaller than what Odisha and Telangana have paid out. This segment will certainly be competed. (Earlier version said 2 Acre, corrected to 4 Acres)
The Opposition will need to take big calls. Do they go after Labour who make up for a significant portion of the voters or compete for farmers and their families. The Rahul Gandhi tweet is probably attempting to surmount this conundrum. They will perhaps cut across all these groups and arrive at a higher pay out plan for may be about 25% of the voters. But my view is that this will not be enough. The PM’s approval ratings and satisfaction ratings give him an advantage on dismissing some of these poll promises. The Opposition will therefore have to be far more creative than coming up with similar sounding income plans. Some areas that the budget has ignored include – Education, Healthcare for APL and of course Jobs. The task is tough for the Opposition now. It needs to be seen if voters feel the same way. Our Survey Update on Monday will give us a sense of the budget impact