Opposition Should Exit Harp Orchestra, Offer A Shadow Budget
Budget 2024 comes in the wake of an intensely fought election. Politics cannot be a harp orchestra on loop, stranded between what is and what can be. What stops the Opposition from presenting a competing vision of how it would fund allocations to address burning issues such as job creation, inflation, health and education? India is at an inflection point in a world wracked by disruptions. A billion aspirations deserve a plurality of competing ideas.
Shankkar Aiyar | The Third Eye | The New Indian Express | 23 Jun 2024
The history of budgets is a travelogue of colourful evolution. Lore has it that travelling troubadours in medieval France would assign the management of their funds kept in a bougette, a phonetic avatar of budget, to a custodian who was known as the budgeter.
The term budget acquired its halo and stature from its usage in Britain. Till the 1400s, the British parliament was more akin to a petitioning body, with parliament agreeing to the crown’s spending plan in return for resolution of grievances. By the 18th century, the quest of the budget presented by the chancellor was to restrain spending and constrain the king’s power to tax and evolved to fulfil the ideal of ‘Taxation by consent, legislation by statute, county and borough representation’, and the quest for a new social contract.
In more modern times, the robust competition in UK’s democracy led to the design of shadow cabinets and shadow budgets, allowing the entities to pitch competing visions and plans to the people. Indeed, the dominating narrative in the ongoing elections, besides the betting and other scandals, is the contest of ideas between the Tories and the Labour parties on how to propel the UK economy. The idea of alternative budgets is not limited to the UK and is prevalent in other countries too — for instance, in Australia, Finland and South Africa. The institutional induction of competing visions and comparative analysis of budgets merits attention.
In a month’s time, Finance Minister Nirmala Sitharaman will unveil the Budget for 2024–25. The exercise comes in the wake of intensely fought elections, which saw the two alliances pitching their visions for India’s economy — on the burning issues of unemployment, agricultural distress, inflation, healthcare and education — through their manifestos and electoral rhetoric. The Congress, in its manifesto, the Nyay Patra, presented one set of ideas. The competing vision of the BJP, Modi ki guarantee, will find articulation in the budget.
Typically, the debate which follows any budget is a surround sound contest of claims and counterclaims. What ensues is a harp orchestra of who did or did not do what. The babel of decibels scarcely makes for an informed debate on the challenges and opportunities for redress through allocations in the financial statement. What stops the Congress or any of the parties in the opposition from presenting a competing version of the Budget? This idea has been articulated earlier in this column.
The opposition has, in previous years, argued that the government has an advantage, as it has access to the necessary information and they do not. The fact is the data for the exercise is available in the public domain. The Interim Budget presented in February 2024 contains the basic macro data. Also available is an update of the data on moolah and forecasts — of improved direct tax collections, better realisations in GST, the transfer of surplus from the Reserve Bank of India, the forecasts of growth and inflation from the Monetary Policy Committee’s statement. The exercise could precede the presentation of the Budget, or could follow the day after.
The crafting of the budget is both a science and an art of meshing political and economic imperatives. It would be useful for the people of the country to compare the focus and the approach of the two formations on how to frame the development agenda. The election campaign highlighted the rising concern on issues of inflation, agri-distress and unemployment and the angst of perceived neglect among the middle class.
The Congress has an opportunity to demonstrate how it would place its ideas — for instance, the programme of apprenticeship and payment of Rs 1 lakh per year, the Mahalakshmi scheme of unconditional cash transfer of Rs 1 lakh to every poor family — and spur the economy. The Congress could also outline a funding plan for the expansion of health and other initiatives, plus a legislative agenda to support growth.
Indeed, the occasion affords the opposition alliance to illustrate how the resources — for instance, the increased revenues and the surplus from the RBI — can and should be deployed for better outcomes. The alliance could assemble a cast of knowledgeable folks — finance ministers, economists — and form an economic advisory council for the task. The parties could collaborate to present the basic template — a la Budget at a Glance — of purpose with inflows and outflows.
Alternative visions need not be limited to the political domain. The exercise could also be undertaken by think tanks and chambers of industry funded by corporates. The chambers’ wish list includes a hike in capital expenditure by 25 percent, expansion of production-linked incentive schemes, provision of income tax relief to low- and middle-income families, increased investment in health and education, support of smaller enterprises, status quo on current corporate tax rates, even as it maintained emphasis on fiscal consolidation.
It would be instructive for the corporates and chambers to seek the services of experts on their rolls to pour their ideas onto a balance sheet and present it. For starters, it would inject some realism in the scripting of wish lists.
India is at an inflection point. Politics cannot be a harp orchestra on loop, stranded between what is and what can be. The rules-based world order is unravelling. A confluence of disruptions — climate, technology and geopolitics — is rendering the familiar uncertain. The political economy of a billion aspirations deserves a plurality of competing ideas from stakeholders on issues of lives and livelihoods.
Shankkar Aiyar, political economy analyst, is author of ‘Accidental India’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’ and ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’.
You can email him at shankkar.aiyar@gmail.com and follow him on Twitter @ShankkarAiyar. This column was first published here. His previous columns can be found here.