One section of Indians, small but very powerful, will be deeply upset by Finance Minister Arun Jaitley’s first proper budget: those who cheated the country by converting their wealth into black money and hiding it either abroad or within India. Prime Minister Narendra Modi and Arun Jaitley have challenged corruption with a double-prong policy: severe punishment for cheats to bring accountability for the past, and transparency in decision-making to curb dishonesty in the future.
The rich, as has been famously noted, are different from you and I; they have more money. Money generally breeds pride; but some Indian moguls specialise in arrogance of a rare sort. They believe that, with the help of cronies, they can buy their way out of retribution no matter how serious their crime. The proposed legislation against black money blocks loopholes. And jail means rigorous imprisonment, not a soft life purchased with bribes.
There is a second group which is unhappy, those who wanted Arun Jaitley to fail. The depression on many Opposition faces was its own evidence; a few tried to veil their frustration with bluster. It is unfortunate that democratic practice often encourages opposition simply for the sake of opposition. But such politicians are missing a very important point. This was the budget of a stable government that is confident of being in office for five years, and therefore can take measured, balanced and sane steps towards a clearly delineated horizon. This is a beginning. They will have even more to be unhappy about next year.
The philosophy of governance is becoming clear: let the vision soar, but keep your feet on the ground in order to travel. Be practical. How do we eliminate poverty? By giving Indians below the poverty line a home with electricity, toilet and, most important, a wage-earner. Invest in self-respect. The most important aspect of the budget, for me, was the great move towards comprehensive social security for the poor, or a “just and compassionate society” in the words of the Finance Minister. The objective is written into our Constitution, but the means have always seemed beyond the ability of our economy. Arun Jaitley was not defeated by conventional wisdom. He strengthened weak links within the social sector and added innovative schemes. Accident insurance is now available to the poor for one rupee a month and life insurance for one rupee a day. There must be a dozen former finance ministers in Delhi, some with acknowledged expertise in pontificating, who must be kicking themselves for not including this in their budgets.
Poverty can be partially alleviated through relief; but it can be eliminated only through jobs. Narendra Modi believes in Indians; that is why “Make in India” is the foundation stone of his government’s economic thinking. There is a desperate need for a vast expansion in jobs.
Ronald Reagan, President of America in the difficult 1980s, once described an economic recession as your neighbour losing his job, and a depression as you losing yours. By 2013, the UPA had managed to pile depression upon recession. Jobs need investment. Investment, whether domestic or foreign will not come without restoration of credibility.
After a series of incremental decisions over the last nine months, with financial inclusion being a vital component of change, this budget has re-established India as a legitimate investment destination. The economic empowerment of the poor will turn India into the world’s most powerful rising market, with first advantage going to home-grown agricultural and industrial business.
The biggest job-creator in the immediate future is probably going to be infrastructure, through roads, railways, cities and facilities like ports. Suresh Prabhu’s excellent Railway Budget offered the tantalising prospect of a railway station turning into the economic and entertainment hub of a town. The Prime Minister asked why a station could not be 25 storeys high. The national budget multiplies the scale of such vision and takes a major stride forward in creating the legislative and administrative basis for the investment needed for a massive transformation of India. The password, again, is clarity, with accountability. The bankruptcy law is one of the most significant pieces of reform. Those crooks who used banks as private treasuries which they could loot at will in the name of investment, will feel a lot less cool on the debris of ruin.
Growth is not a statistic. It has to be flesh and blood if it is to mean anything other than a few extra numerals on a bank account. If there are no jobs, and if there is no opportunity for talent, then the economy is only the crackle of a paper tiger. Arun Jaitley’s budget is a document crafted with honesty, realism and a powerful vision of India’s future. It is a plan for the country from an imaginative but credible architect, from a man who recognised the present in order to fashion the future. It is the first blueprint for India’s new economy.