Budget 2018

Indian economy is standing at an inflection point. It is akin to a patient whose wounds are being operated upon and hence business sentiments across India give an impression of it as a patient lying in the hospital ward under mild anesthetic effect. On one hand, IMF and World Bank are projecting India as the upcoming fastest growing economy in the world. The index of industrial production is coming up and purchasing managers index is also showing positive signals. However, in contrast, the job market remains sluggish and the dream workforce of prime minister's 21st-century vision is now forced to sell pakodas to make two end meals. The window of reviving the job market is very small for this government else there is a risk of losing the power in the year 2019. In this context, the budget of 2018 holds absolute significance. So let us see what can we expect from this budget.

One thing is for sure from the election campaigns of UP and Gujrat, the BJP would leave no stone unturned in holding onto power. Thus, it would have three gameplans achieve its purpose. First is the real revival in the growth. This would come by reviving the job market. Now jobs are not flowing from the manufacturing sector and service sector was becoming the den of black money so it is still under operation. Therefore, the most vote-fetching option is to invest in the agriculture. Nearly 58% people derive their livelihood from the agriculture sector. Plus, they are swing voters who could be easily turned into favor by reviving job guarantee scheme or loan waiver scheme as we saw in 2009 election and in recent UP election. The second way to revive the growth is to increase the public investment in the economy. Build new roads, launch new townships, open industrial corridors, complete the pending projects like dedicated freight corridor etc. Building public infrastructures like roads and townships are the first step in generating more jobs, activities and new businesses in the region.

The second strategy would be to wage a mini-war against Pakistan and Pak-sponsored terrorism. This could ignite the patriotic sentiments in the country and may result in victory for Namo just like it did for Shri Atal Bihari Vajpayee in 1999 after Kargil. However, given the poor state of defense preparedness, it would be a risky adventure to fight Pakistan. Thus a large chunk of the imminent budget may go for upgrading defense infrastructure. Pak-bashing is one of the surest ways to win the election in India and our PM will not refrain from exercising such options.

The third way to generate more votes is to fulfill the promise of Ram Mandir, revoking article 370 and cleaning Ganga. This would help in arousing communal sentiments in the country and would definitely provoke Hindu fundamentalists to vote in favor of BJP. The project of Ram Mandir does not require any separate money allocation. It would require some political investment in resolving the crisis. The article 370 would be achievable by the end of this year in the parliament but state government partnership with PDP is a big roadblock. Hence, BJP may go for an auxiliary goal of article 35A in return. Cleaning Ganga would also require some administrative effort however some money may be allocated to express the process of cleaning. Already Ganga water pipeline is laid down in some part of the U.P. and other states of the country. More than the thirst for water, it is aimed at dousing the thirst for the religious fundamentalism among the masses.

Overall, one can expect this budget to favor agriculture, public investment, defense and clean Ganga project over other areas/segment. However, the country could only be sustained in the long term when we are able to fulfill of demand of jobs rather than Ram Mandir or Pak-bashing. And more importantly, it should be more than chai-pakoda.