“Change, growth, jobs and…upliftment of the poor,” Finance Minister Arun Jaitley said, were the objectives of the government, while concluding his budget speech. In an interview subsequently, Mr. Jatley said it was wrong to ask whether the government was with the poor or with the corporates. “I am with both. There is no contradiction,” he said. Besides these two categories, Mr. Jaitley had a third crucial constituency to address: the middle class, the most vocal supporters of the Narendra Modi government.
Rejection of a legacy An emphatic rejection of the Congress legacy with regard to all these groups is what Mr. Jaitley sought in the budget speech. He said he inherited a climate of “doom and gloom, among the investor community, and the people voted the BJP because they wanted “scam, scandal and corruption raj to end.”
“Well-intentioned schemes introduced in the past have often been ill-targeted, riddled with leakages and delivered with inefficiency,” he said. Things have changed in the months after the Modi government came to power, “We have lived up to that trust [of the people],” the Finance Minister said.
Mr. Jaitley’s immediate predecessor, Congress leader P. Chidambaram, said the budget leaned in favour of the corporates and the tax-paying class at the cost of the poor, who “look up to the government for sympathy, support and help.” Mr. Chidamabaram cited reductions in allocations for Scheduled Castes and Scheduled Tribes sub-plans and the Integrated Child Development Scheme to drive home the point.
Mr. Jaitley countered these suggestions, pointing out that after the 14th Finance Commission awards, the States would spend more as they are entitled for a higher revenue share. “The overall expenditure in [the] social sector will continue to rise,” he said.
While the Finance Minister was categorical in announcing his commitment to the poor, he was primarily betting on growth by offering concessions and facilities to investments. Therefore, it is evidently the corporates that get the direct benefit from the budget, while the poor and the middle class could be collateral beneficiaries of growth. Asked whether he could have done more for the middle class, Mr. Jaitley said: “Development will benefit all. New tax deductions for investments in insurance and pensions will help them and their future. It will also increase savings and help the country.” The middle class will have to actively plan their finances to reap the benefits on offer.
Trouble for the poor? The poor, who are dependent on subsidies and government schemes, may face some trouble as the government intends to target subsidies. Targeting subsidies was counted a good governance initiative in the budget speech, and it may well be true, but the vulnerable sections may view this move with scepticism. Moreover, the hike in excise duties and service tax would affect one and all.
Overall, for the balancing that Mr. Jaitley seeks among various interests groups in the country to succeed, the economy needs to jumpstart. Mr. Jaitley is clear that this can be achieved only by triggering a new investment cycle.
Taxation 
