Policy vs polls: Will PC play to the gallery?

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Railway Minister Lalu Prasad played to the gallery as he presented his fifth Railway Budget on Tuesday. Lalu played to the gallery and kept his promise to the common man.

Second-class fares were cut by 5 per cent. AC fares have been reduced too. As many as 53 new trains and 10 new Garib Raths are in the pipeline.

And if the sops in the Railway Budget are any indication, the UPA looks all set to unveil a populist Budget in two days’ time.

In an election year, Union Finance Minister P Chidambaram is expected to announce several measures for the aam admi, including a loan waiver for the farm sector and tax cuts.

Does it mean that the countdown to the next general elections has begun? Will Budget 2008 be more about elections than economics? These were the questions discussed on CNN-IBN’s special programme ‘Face the Budget’ on Tuesday.

CNN-IBN’s Editor-in-Chief Rajdeep Sardesai sought answers to these questions from Congress MP Jyotiraditya Scindia, BJP MP Ravi Shankar Prasad and CPI(M) MP Mohammad Salim.

The expectations from the Budget 2008 are high. People expect personal and corporate income tax cuts, excise duty relief, a hike in the income-tax exemption limit, a higher ceiling for tax-saving investments, rejig in tax slabs, simplification of taxes, massive funds for social sector projects like NREGS, Sarva Shiksha Abhiyan and for rural health and power sectors. The Budget is also expected to have debt-relief package for farmers. It is unlikely to introduce any new tax. Package for irrigation sector and farm production is also expected.

Inclusive Growth

Inclusive growth is the word we heard when the president gave her address to the joint session of the parliament. Samaveshi vikas is the word she used about 13 times.

CNN-IBN’s Rajdeep initiates the debate by asking Jyotiraditya Scindia if it has taken the congress party or the UPA government really 4 years to bring inclusive growth? What is this word inclusive growth that is now expected to dominate this budget?

Defending all moves of the UPA, Jyotiraditya Scindia says that we are not one budget down but we are one budget up. Secondly he says that budget exercise cannot be looked in isolation in terms of a single year.

“The congress party and the UPA government has a certain philosophy, a certain adherence to our common minimum game plan and our objectives and that is centralised on the issue of inclusive growth and equitable growth,” says Scindia.

He adds that the objective is of growth with a human face. Last year and hopefully this year again, the centrality is very clearly on let the private sector participate wherever it can. The other areas such as the social sector and the agricultural sector are the areas where the central government must lay most emphasis and that is what the government has done most successfully in the past few years.

Is inclusive growth now a theme across political parties?

We saw Vasundhra Raje delivering her budget and she also used the term inclusive growth and financial inclusiveness. Have we moved from shining India to aam aadmi with every successive year of union budgets and state budgets, asks Rajdeep.

Ravi Shankar calls Lalu’s Chak De railway budget a master of jugglery. He asks Rajdeep to go through page 52 of part two of this budget. They talk of reducing fares. “It says that it shall be available on 50 per cent of popular trains. All trains can be popular! Secondly, it says that it shall not be available during peak season. Almost 10 months in a year, which include, summer vacations, winter vacations, Christmas, Durga Puja are all peak seasons. Therefore it is all jugglery,” says Ravi Shankar.

On inclusive growth, he says that every party must aim for growth, whether you go for a popular or non-popular budget. What is important is that have you ushered in better quality of life.

Quoting the leader of CPI(M) party, Sitaram Yechury, ‘the suffering India is suffering’, Ravi Shankar says that if that is the image of UPA by a supporting party, then he has nothing more to say.

Do you still believe that there is a need for a mid-course correction? Do you believe that the suffering people are suffering?

Jyotiraditya Scindia says that the philosophy of the government for the last four years is towards the aam aadmi.

However Salim says that since the UPA government came into being, there are talks about the aam aadmi, however, he says that one has to do something about the aam aadmi than just talk about him.

Interrupting the argument, Rajdeep questions Salim, “Therefore you are saying that over the 4 years, the UPA has not done enough?”

Defending his stance, Salim adds that the UPA has done some work but that is not enough.

The big ticket of this budget of Chidambaram will be loan waiver to the farmers. It could be as much as 30,000 crores and interest for small and marginal farmers will be waived. Is that recognition in a sense that the UPA has not been able to do enough for the Indian farmer?

“It’s always the case of sour grapes for the BJP,” says Scindia.

“They always tend to look at zero level negative and not zero level positive. The very fact that fares have not been hiked in the last 2 years and in fact have been reduced this year is something, which is a huge relief for the common man. Unfortunately the BJP believes in maya jaal and jugglery,” adds Jyotiraditya Scindia.

Defending the UPA government and the budget so far, Scindia says that if one looks at the budgetary allocations of the last 3 or 4 years, it can always be debated on how much is ever enough. However, he says that the key issue is that of numbers. “And if you look at the numbers of the last 4 years, outlays on education, and health have been increased on a compounded annual growth rate between 30 to 35 per cent per annum. These are levels that historically the country has never seen in its existence,” argues Scindia.

He agrees that on the issue of agriculture, there is no doubt that 70 per cent of the population still survives on agriculture and that the government must concentrate on this sector. He believes that the government will have to redouble its efforts in the agricultural sector.

However, interrupting the argument, Rajdeep asks if the loan waiver in this budget is an acceptance that the agricultural schemes are not delivering and the government’s credit schemes are not working.

Denying the failure of credit schemes, Scindia says that the credit schemes are working. “If you look at the level of disbursement, we started with a level of 60,000 crore which has grown to one lack 85,000 crore. Investment in agriculture in the AIBP programmes or the Bharat Nirman in rural areas has grown tremendously. The issue that I am raising is the centrality of problems and that is to do with execution and the responsibility of execution does lie with the state government,” says Scindia.

He argues that it is this variance in performance at the state level that is at the core of all issues. “Centrality of the problems also lies in the central federal state relations,” argues Scindia.

However, Rajdeep says that there are surveys to show that BJP states have performed better that the Congress states.

Ticket to victory in elections?

Have grand schemes like NREGA really worked on the ground or are political initiatives?

Figures shown by the CAGs six-month audit shows that only 3.2 per cent of the registered households could benefit from the NREGA. Yet the left wants to extend it to all districts of the country. That will cost you double of what it cost you last time. 12,000 crores will now be doubled. Is it politically and financially feasible?

Defending the extension of NREGA to other areas, Salim says that it is not the Left, which is talking of extension. “It was mentioned in the Common Minimum Programme that the scheme is for all rural and urban households,” he adds.

When Rajdeep argues that the delivery system is not working and hence the question of NREGA’s extension to other areas is questionable, Salim argues that one has to improve the delivery systems.

“The fund is not utilised, it is not released on time and even the monitoring system is not at work but we have to improve that. You can’t deny the poor if the system does not deliver,” argues Salim.

However Rajdeep debates that it could actually become politically suicidal for the congress party to raise expectations by programmes such as the NREGA and not meeting them.

Jyotiraditya Scindia says that the government has to do what is best for the citizens of the country. “If we have committed to a scheme, we are committed to it’s countrywide execution and implementation,” he adds.

“Are you supporting its extension,” questions Rajdeep.

“Absolutely,” says Scindia. He adds that the benefits of the scheme are extremely widespread. “Wherever it is executed properly, there have been tremendous levels of improvement in poverty levels,” says Scindia.

No permanent assets being created?

Jyotiraditya says that there are permanent assets being created. “The whole issue is what Salim ji also said is that of execution. There are a lot of states like AP where we have bought IT into the NREGA programme to make sure of speedy execution. In places like MP it has been a total disaster. There has been variance. Lets not debate between the BJP, Left and the Congress. Lets have a national debate for national well-being, which is to ensure the implementation of not only this programme but programmes across the board,” adds he.

He also says that there is a need for greater transparency and accountability.

Rajdeep questions Ravi Shankar Prasad if it is it possible to have a national consensus on grand schemes like the NREGA? Would the BJP support it? “Do you think these are grandeur schemes where the delivery systems are simply not working out,” questions Rajdeep.

Criticising the implementation system of the UPA government, Ravi Shankar cites an example of a survey done by the National Sample Survey. “The survey showed that out of 100 days of proper employment promised in a year, only 17 were materialised. If there is a grand scheme, it becomes responsibility of the Union for its proper implementation. During Vajpayee's time, when I was also a minister, we had a highway programme all across the country. We did not have NDA or BJP all across the country. But it was a great success. You have to ensure proper coordination,” adds Ravi Shankar.

Questioning Ravi Shankar, Rajdeep asks that if Mr Chidambaram announces on Friday a loan waiver which amounts to 30,000 crores, would he support the move or would he believe that in an election year, this is not a kind of scheme to be given support?

Answering the question, Ravi Shankar says that the point is that farmers today are committing suicide in great numbers. “Today Mr Sharad Pawar is bringing in wheat in great numbers from outside by importing it, which is sub standard and is at high cost, and this is a issue of concern. These are crucial issues. The reforms of agricultural sector have come to a standstill,” adds he.

He also argues that proper coordination, as what Jyotiraditya was talking about cannot be achieved when a minister sitting in Delhi is writing letters after letters on the project to the Chief Minister in the state and creating hostility. “In that way you do not get proper implementation,” he argues.

Do budgets really help when it comes to garnering votes? Why do you resort to populism?

Salim says that is a temptation, however people want to see how their standard of life increases.

Is it not about fiscal prudence or is it that fiscal prudence does not matter in an election year?

Salim debates that the delivery systems in the states have to be improved.

However, Ravi Shankar says that the people will forget about the budget till the time the elections are held. “What is important at the end of the day is the quality of life of the people. I regret to say that under UPA, the quality of life of common man has got the biggest suffering,” says he.

Budget wins election?

Jyotiraditya Scindia says that the UPA government is committed to the aam aadmi. “Budget is an exercise in terms of reiterating our commitment to the aam aadmi. It is amazing to see how the Finance Minister has stuck to his targets of fiscal responsibility benefiting people and reducing the fiscal deficit,” adds Scindia.