However, the interim budget was presented when the BJP commanded a majority in the Lok Sabha on its own. Officially, it was an NDA government but PM Modi was not dependent on allies for his survival. But things changed after the 2024 Lok Sabha polls. After 10 years in power, the BJP failed to win a majority on its own in the 2024 Lok Sabha elections. In a first for PM Modi, his government is now dependent on support from Chandrababu Naidu’s TDP and Nitish Kumar’s JD(U) for its survival.
It is said “numbers don’t lie”. This seems obvious from the first budget of the Modi government 3.0. There is no doubt the Union Budget 2024-25 has been prepared keeping in mind the reality of changed numbers in the 18th Lok Sabha.
This changed reality is self-evident in today’s budget. Hence, no one should be surprised as the FM announced a host of bonanzas for Andhra Pradesh and Bihar. The budget is full of schemes for Bihar and Andhra Pradesh. Throughout her Budget speech, Sitharaman kept announcing special projects and funds for these two states.
For details, read these stories on specific announcements for Bihar and Andhra Pradesh.
Next, another big focus of the Budget is on youth and jobs creation. “I am happy to announce the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a five-year period with a central outlay of Rs 2 lakh crore,” the finance minister said.
The jobless-growth was one of the main criticisms of Rahul Gandhi against the Modi government. The government seems to have taken a leaf out of Congress’s Lok Sabha manifesto and announced an internship scheme which would benefit 1 crore youth.
“This budget serves as an acknowledgement of the jobs problem facing the economy. The word ‘unemployment’ never featured even once in the BJP election manifesto, said Kunal Kundu, India economist at Societe Generale SA. The fact that there was a clear focus toward employment generation now shows the nature of the issue the government is dealing with,” a Bloomberg report said.
To be fair to the Modi government, there are no great freebies in the Budget. At the same time, the government plans to cut its fiscal deficit to 4.9% of gross domestic product in 2024-25, below the 5.1% figure in February’s interim budget.
“The budget successfully engineered a fine balance between supporting job creation and skilling, rural development and agriculture, along with continued focus on infrastructure spending without compromising on fiscal consolidation,” Sakshi Gupta, principal economist at HDFC Bank, told Reuters.
But the budget is not all about elections and immediate gains. Maharashtra, Haryana and Jharkhand are set to go for assembly polls during the last quarter of the year. But there are no specific announcements for these states. So, in a way, this is also a signal that PM Modi is not looking at elections only and playing a long-term game too.
In the end, the budget has helped PM Modi keep Andhra, Bihar CMs on the right side. At the same time, it has done a fine balancing act between fiscal prudence and political exigencies.
Now, it’s over to voters in Maharashtra, Haryana and Jharkhand. These three state polls will decide the next set of political manoeuvring by the Modi government and INDIA bloc.