With India’s Election Looking Close, Modi Packs Budget With Handouts
NEW DELHI — A new pension plan for rickshaw pullers. More money for fisheries. Tax breaks for the middle class and cash handouts to struggling farmers.
On Friday, the Indian government announced its budget, and with a major election looming in the next few months, the spending plan was stuffed with financial inducements intended to woo voters, though they will increase India’s debt beyond targets the government itself has set.
At the same time, Prime Minister Narendra Modi and his ministers have been trying to deflect criticism that they tried to bury an official jobs report that showed unemployment at a 45-year high. Mr. Modi came to power five years ago promising to create millions of jobs for India’s 1.3 billion people.
The latest numbers, leaked to the Indian news media this week, show that even while India’s total economy has been growing, at an impressive 7 percent rate or even higher, unemployment also has been rising, hitting 6.1 percent.
On Friday, in an interview with The New York Times, Mr. Mohanan said it was “the responsibility of every government to bring out official statistics as public information.”
“We approved the report to be released, and it did not get released to the public after that,” he said. “I have no idea who decided that report will not be released.”
Government economists have tried to defend the decision to withhold the report, saying that it was still a draft and that the jobs data needed to be verified. Newspapers across India carried front-page articles on the controversy.
But on Friday, Mr. Mohanan could not have been clearer. “We approved the report,” he repeated.
He said that the National Statistical Commission, for which he was the acting chairman, had decided months ago that the report should have been published in December.
India is preparing for a hotly contested election that pits Mr. Modi and his Hindu nationalist political party against an increasingly assertive opposition led by Rahul Gandhi, the scion to a storied political dynasty. His father, Rajiv, was prime minister and so was his grandmother Indira, considered the Iron Lady of Indian politics, who loomed over this country for years. Both were assassinated.
Mr. Modi still leads in opinion polls against Rahul Gandhi, whose Indian National Congress party was deeply damaged by corruption scandals when it was in power. The party’s identity as a family dynasty — Mr. Gandhi recently tapped his younger sister, Priyanka, as a party leader in a strategic state — has alienated some voters, though others seem energized by Priyanka Gandhi’s entry into politics.
She is considered a strong public speaker and a forceful personality. The Congress party is counting on her to appeal to women across caste and religious lines.
As the days draw closer to the election, expected to be held in early May, the Congress party is gaining momentum. A race that once seemed a walk for Mr. Modi now seems too close to call. Indian voters are known for suddenly turning against incumbent leaders.
India’s political landscape is highly fragmented, like Indian society itself. In the last election, in 2014, more than a dozen political parties, rooted in caste, region or religious beliefs, won seats in Parliament.
Most analysts believe neither Mr. Modi’s party, the Bharatiya Janata Party, nor the Congress party will win an outright majority. Regional and caste-based parties will probably become the kingmakers, trading their support for central positions in the next government.
This is where the farmers come in. Farmers are a huge source of votes in India. More than half of India’s population still depends on agriculture to survive. Recent studies show growing distress in farming communities because of population growth, shrinking plots of land, climate change and high fertilizer prices. Each year, thousands of farmers, despondent over dwindling yields and seemingly endless bills, commit suicide.
So few were surprised that one of the signature handouts in Mr. Modi’s budget unveiled on Friday was cash payments to farmers with less than two hectares — about five acres — of land. Under the new program, small-scale farmers will get 6,000 rupees, around $85, in cash. For many farmers, 6,000 rupees is about a month’s earnings.
Workers in the informal sector, which includes rickshaw pullers, brick layers, tea sellers, maids, drivers, watchmen and millions of others, also are to be given financial bonuses under the new budget, but it seemed Mr. Modi was especially interested in pleasing farmers.
“Our hard-working farmers were not getting the full value of their produce,” Piyush Goyal, Mr. Modi’s acting finance minister, said in his budget speech.
“There is a need for providing structured income support to the poor landholder farmer families,” he added. “Such support will help them in avoiding indebtedness as well and falling into clutches of money lenders.”
Even so, many farmers were critical, calling the payments insufficient.
“They have done a crude joke to farmers,” said Vijay Jawandhia, a farmer leader in Maharashtra, India’s third-largest state. “How will 500 rupees per month remove the distress of farmers?”