Budget 2024-25 reflects the Modi government’s misplaced priorities. It showers largesse on Bihar and Andhra Pradesh while punishing States where Opposition parties performed well electorally. The Budget commits ₹26,000 crore for highway projects and ₹11,500 crore for irrigation projects in Bihar.
In contrast, Karnataka’s request for infrastructure funding for India’s most dynamic city, Bengaluru, has been ignored.
The Budget provides fiscal support for natural calamities mainly to NDA-ruled States — Bihar, Assam, Sikkim and Uttarakhand. Only Himachal Pradesh is the exception.
The government’s duty is to provide support to all of India based on objective criteria rather than to single out States where it is in power.
Ten years after the Andhra Pradesh Reorganisation Act, the Modi government finally took note of its provisions due to the pressures from the Telugu Desam Party, its coalition partner.
AP burden
At the same time, the Finance Minister pulled a fast one on Andhra Pradesh. The Budget commits to ‘arranging’ ₹15,000 crore towards the development of Amravati, i.e, the Centre will merely facilitate loans from multilateral development organisations. Thus, where Andhra Pradesh needed financial support for building its capital, it will instead face an even heavier debt burden.
Faced with India’s daunting unemployment challenge, without worrying about credit or copyright, the Budget incorporated three key ideas from the Congress manifesto. The Congress Manifesto proposed to “Create a new employment-linked incentive (ELI) Scheme for corporates to win tax credits for additional hiring against regular, quality jobs.”
The Budget makes a similar provision. However, instead of tax-credits it focuses on reimbursements of Employee Provident Fund (EPF) contributions, which are not equally rewarding for employers.
The ELI Scheme promises one month wage to all who join the formal sector but where is the government support to facilitate job creation in the formal sector?
The Congress’ Yuva Nyay assured a Right to Apprenticeship with an yearly stipend of ₹1 lakh. The Budget proposes a similar internship programme but has limited the potential of the scheme to the top 500 companies and allowance of ₹5,000 which is only ₹60,000 per year. India’s top 500 companies are hardly those in need of interns.
Further, redirecting Corporate Social Responsibility (CSR) funds towards partial funding of internships takes resources away from a corporation’s other responsibilities to society.
The Congress also promised to remove the “Angel tax.” India’s start-ups will be relieved that the BJP has eliminated it.
Welfare woes
One of the listed Budget priorities is ‘Inclusive Human Resources Development.’ Yet welfare was glaringly neglected. The word ‘children’ was not once mentioned. Health expenditure as a proportion of the GDP remains stagnant; given this scenario, the government is far from reaching its goal of spending 2.5 per cent of the GDP on health.
Skilling received a lot of mention but, so far, various skilling initiatives have failed to deliver. There was no mention of primary or higher education. Sad, given that 3.5 million children dropped out in the academic year 2021-22. Without investing in social welfare and human development, how is the government going to transform future generations, one of the Budget priorities?
Despite rising rural unemployment, the Budget outlay for MGNREGA remains unchanged. Agriculture’s share of the overall Budget has declined from 4.97 per cent in 2019-20 to 2.74 per cent in 2024-25. We hardly know what to expect from lofty commitments like extending natural farming to one crore farmers and using digital public infrastructure for farmers.
The middle class did not get much of a respite. Removal of the indexation benefit on real estate deals a significant blow to those who invested in real estate for years. The Budget only tinkers with and has made no major changes to the income tax slabs. This ignores the increasing inflation burden faced by the average taxpayer over the last decade.
Clearly, the Budget reveals that the Modi government has not heard the message delivered by voters last month.
The writer is a former member of Parliament and Chair, AICC Research Department.