Looking beyond the rhetoric of this budget being a populist one or not, this government needs to be commended for not biting the bullet on farm loan waivers, unlike its predecessor UPA-2 that wrote off Rs 70,000 crore back in 2009. BJP government itself did the same prior to the 2017 elections in UP. It is no different from what recently happened in Madhya Pradesh, Rajasthan and Chhattisgarh where while Congress got its mandate by making a promise, only 10% of the farmers actually benefited. Far from being a solution, farm loan waivers cripple the economy and the supply chain in general.
For a country that used to be one of the most prosperous economies at one point, globally, socialism isn't in the bloodstream of this nation. Some sections of the vote base have been corrupted with repeated doles and freebies, but that has fortunately not taken away from the majority. Having traveled across locally and especially in the rural areas, entrepreneurial mindset isn't foreign to the people, be it in the form of jugaad or the modern technology-enabled innovations.
In Oct 2018, I was invited to speak at the Smart City Expo in Jaipur, Rajasthan. Of the multitude of questions I got, one stood out, and it was from a farmer. He was clear that it wasn't support in terms of technology or weather planning or seeds etc that they wanted. What they wanted was clarity on the demand cycles.
When one looks closer, it becomes evident; India doesn't have an agrarian crisis. We do however have a supply chain crisis. For a nation of 1.3 billion, it's rather strange to have an economic crisis replete with unemployment. Don't go far, just travel out to the closest agrarian belt to you. Look at the crop cycles and then match the corresponding finished goods, edibles, consumables, wearables etc. If you don't find a correlation, that's a first sign of a supply chain crisis.
Globalization is great for the urban masses because it gives access to the plethora of products and services from the world over, but if it isn't benefiting the farmer or the producer next door, then it's a ticking time bomb that will destroy the longevity of a prosperous society. If a farmer in Mewat is growing pearl millet (bajra) - that the rural masses consume extensively - and is not something that you find in products that are consumed in and around those areas, there is a sustainability problem right there. It's the root of a sustainability crisis.
Direct cash transfer to the 12 crore farmer of Rs 6,000 per annum, even if a small step is directionally a good one. Not only does this bring the small farmers under the ambit, but also gives them the opportunity to get connected to the supply chain. There is a lot to be read between the lines here. This is the first time a MSP has been guaranteed to the farmers and one can see kisan haats and mandis sprouting across cities. Good intentions matched with right actions, are bound to give favorable results.
This statement from the Finance Minister was not only a heartwarming one, but also a master stroke of sorts, for the actual vote base and producer - that I like to term as 'Kullhad Economy'- of the country, "Half of India's GDP comes from the sweat and toil of 42 crore workers in the unorganized sector working as street, rickshaw pullers, construction workers and in numerous other similar occupations. Domestic workers are also engaged in big numbers. We must provide them comprehensive social security coverage for their old age." Reaching out to this base via the warmth and security of a pension plan is probably the most critical step this budget shows promise in. It is really the Kullhad Economy that pulls the country together while making it stay connected with its culture and roots. A small-multiple increase in this economy would translate to a mega boost for the national economy.
Last but probably the most critical direct beneficiaries to stimulate the growth economy further are the 3 crore urban middle class that is actually the big consumer segment and accounts for about 55% of the FMCG goods as well. In the state the economy was inherited by this government, from the previous government and sans farm waivers, this is actually quite a pragmatic budget, one that holds promise and commitment from this administration.
As always it is great to have good intentions, the key is to now deliver this in letter and spirit.
The writer is an author and entrepreneur. He is also the Founder of KFN, Kullhad Economy, HarVa