What Modi-Jaitley’s five past budgets tell us: High on sound bytes but low on substance

While Piyush Goyal is expected to present yet another ‘interim’ budget on Friday, if the earlier five budgets are any indication, this government appears to have lost the plot

What Modi-Jaitley’s five past budgets tell us: High on sound bytes but low on substance
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Rahul Pandey

When the Narendra Modi led Bharatiya Janata Party government took office in May 2014, the nation hoped that the new regime would bring a vertical take-off. Five years later, the sentiment across the board has been that it has been a terrible waste of a clear mandate.

Fiscal management is in acute mess, rural India is in acute mess, the government has failed to deliver jobs and the key initiatives launched by the government have simply failed to deliver.

While Union Finance Minister Arun Jaitley’s first two budgets talked about policy priorities of the new government, the last three have primarily been apologies on why the government has failed to deliver.

In the last five budget speeches, the BJP government has focused its energies on Smart cities, Skill India, Swachch Bharat, Digital India, Startup India, Standup India. The problem for the BJP is that it does not have anything to show on these key schemes. The government did appear to be busy through its five-year term, but it is now like a confused student who wants an extra 10 minutes to make a last-ditch effort to achieve passing marks which may make very little difference in the final outcome.

In his first speech on July 10, 2014, barely two months after the government took over, the Union Finance Minister indicated that he was going to stick to the fiscal consolidation roadmap and bring down the fiscal deficit to 4.1% of the GDP.

“Difficult, as it may appear, I have decided to accept this target as a challenge. One fails only when one stops trying. My Road map for fiscal consolidation is a fiscal deficit of 3.6 per cent for 2015-16 and 3 per cent for 2016-17,” he said in his first speech.

Four years later, on Feb 1, 2017, the Finance Minister said: “I have pegged the fiscal deficit for 2017-18 at 3.2% of GDP and remain committed to achieve 3% in the following year. With this gradual approach, I have ensured adherence to fiscal consolidation, without compromising the requirements of public investment.”

The government has gone off the trajectory as they had already breached the target of 3.3 per cent in October and present estimates suggest that they are 15-20% beyond the fiscal deficit numbers.

Smart cities, Skill India, Swachch Bharat, Digital India and Housing for All were the key schemes initiated by the Modi government in the first budget besides a slew of schemes which were given allocations of Rs 100 crore to Rs 50 crore. These schemes included some schemes which have fallen completely off the radar since they were introduced. “A National Industrial Corridor Authority, with its headquarters in Pune, is being set up to coordinate the development of the industrial corridors, with smart cities linked to transport connectivity, which will be the cornerstone of the strategy to drive India’s growth in manufacturing and urbanisation,” the FM said in his first budget speech. Two years later, in April 2016, the idea was given a quite burial.

Though these 100 crore schemes became a bit of a joke in 2014, the general feeling was since the government had only a couple of months to prepare for the budget, the first budget was more of a statement of intent. It was expected that the second budget would actually be a far more detailed exercise.


The second budget too was more of the same, lofty ideas which were high on sound-bytes but low on substance. “When other economies are facing serious challenges, India is about to take-off on a faster growth trajectory once again. The International Monetary Fund (IMF) has downgraded its earlier forecast of global economic growth by 0.3%, and the World Trade Organization has revised its forecast of world trade growth from 5.3% to 4%,” the Finance Minister said.

In his second budget, the Finance Minister gave the government a pat on the back by talking about its success in launching of the Jandhan Yojna. “Who would have thought that in a short period of 100 days, over 12.5 crore families could have been brought into the financial mainstream,” Jaitley ji said.

Several years later, the Jandhan Yojna remains just a statistical achievement. As of Jan 2019, 7.85 crore accounts, or 23 per cent of all Jandhan accounts are still inoperative or have zero balance, not to take into account the crores of accounts where small deposits were made by banking staff to save their jobs.

The second budget laid down a 13-point charter for 2022 for the 75th year of our Independence which included roof for each family in India, livelihood for at least one member of the family, substantial reduction of poverty. All of these have largely remained talking points and there has been little progress, except rural electrification where 96% of the work had been completed by previous governments.


When Union Finance Minister Jaitley rose to present his third budget, he still did not have any major successes to show. He still blamed the previous government and the global headwinds for the crisis.

“Let us look at our achievements compared to the last three years of the previous Government when growth had decelerated to 6.3%. The growth of GDP has now accelerated to 7.6%. This was possible notwithstanding the contraction of global exports by 4.4% compared to 7.7% growth in world exports during the last three years of the previous Government,” Jaitley said.

In his third budget, the FM talked about the PMFBY and said, “The Pradhan Mantri Fasal Bima Yojana has already been announced to protect the farmer from the adverse consequences of nature. The farmer will pay a nominal amount of insurance premium and get the highest ever compensation in the event of any loss suffered.”

The scheme remains driven by farm debt and farmers leave the scheme as soon as their debts are written off. The number of farmers under the scheme has dropped from 4.03 crore in 2017 to 3.33 crore in Kharif 2018, as many state governments rolled out their loan waiver schemes. By this time, the government had begun to feel the pressure on jobs and the FM said: “In order to incentivise creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment.”

The scheme may have helped shift some informal jobs to the formal sector but there is not enough evidence to suggest that this led to a surge in employment generation on the ground.

The Finance Minister informed the house that “A National Career Service was launched in July, 2015. Already 35 million jobs seekers have registered on this platform.” The number of people registered on this has since gone up to 39 million or almost 4 crore but only about 7 lakhs have been provided jobs, which is less than 2% of the persons registered.

By the time the Finance Minister presented his fourth budget, Demonetisation was the central issue of discussion and when the stated objectives to “eliminate corruption, black money, counterfeit currency and terror funding” failed, Mr Jaitley went on to expand the ambit.

“Demonetisation helps to transfer resources from the tax evaders to the Government, which can use these resources for the welfare of the poor and the deprived. There is early evidence of an increased capacity of Banks to lend at reduced interest rates” he said.

The Finance Minister had hoped that the government would get some additional financial resources to help do more but did this happen?

The government floated the Pradhan Mantri Garib Kalyan Yojna (PMGKY) but only Rs 4,900 crore was disclosed by 21,000 people under the scheme, barely enough to meet the cost of printing the new currency. More than 100 people were killed standing in never-ending queues while the nation continues to pay the long-term costs.

The Finance Minister also announced that Pradhan Mantri Kaushal Kendras (PMKK) would be expanded to 600 districts across the country but the Pradhan Mantri Kaushal Vikas Yojna has only added to the army of unemployed women and men.

Schemes such as Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE) have largely remained on paper and not much information is available on the progress made under the scheme.


By the time the Finance Minister presented his fifth budget, the impact of Modinomics were visible in rural India. The government knew it needed to focus back on agriculture.

“In our party’s manifesto it has been stated that the farmers should realise at least 50 per cent more than the cost of their produce, in other words, one and a half times of the cost of their production… I am pleased to announce that as per pre-determined principle, Government has decided to keep MSP for the all unannounced crops of kharif at least at one and half times of their production cost.”

It has been a year since the government announced an increase in MSP, but it has failed to make an impact as farmers are now being forced to sell their crops below MSP across the country. Media reports indicated that farmers were being forced to sell their produce below MSP in 60% of the markets.

Nothing illustrates the failure of this government better than the status of smart cities. First announced in the July 2014 budget, the scheme is going absolutely nowhere.

Jaitley, in para 87 of his budget speech stated that 99 Cities were selected with an outlay of Rs 2.04 lakh crore but projects worth Rs 2,350 crore have been completed and works of Rs 20,852 crore are under progress. The Finance Minister admitted that in five years, the Modi government has achieved only 2% progress.

Only 88 of 2,197 ventures got tax exemptions under Start Up India, and data available till 24 July 2018 showed that 2,197 applicants applied for tax benefits out of the total 11,422 recognised by the government, The Indian Express reported.

Growth in the last two years of the UPA had come down because the Government decided to stick to the FRBM roadmap, perhaps one of the reasons why the UPA lost the 2014 elections. In 2019, we are not only off the FRBM trajectory, the government is clueless on how to create jobs, restore demand and almost all the other issues before the country.

Five years later, they have very little to show. An extra budget will make very little difference. Sorry Mr Piyush Goyal, your time is up.

This article first appeared in National Herald on Sunday.

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