The 2024 election results raise an intriguing question: would they have been different if the interim budget had been different?
Comparing it to 2019 makes this question particularly interesting. In the penultimate round before the 2019 general elections, the BJP lost the 2018 assembly elections in Madhya Pradesh, Rajasthan, and Chhattisgarh. Rural distress and poor conditions for farmers were significant factors in these losses. To counter this rural discontent, the 2019 interim budget introduced a direct income transfer scheme for farmers. While elections are influenced by multiple factors, the BJP increased its seat count between 2014 and 2019.
However, the 2024 interim budget did not focus much on the elections, despite the BJP winning these three states in 2023. As a result, the BJP’s seat count fell from 303 in 2019 to 240 in 2024.
The current budget did not attempt to rectify what could have been a shortcoming in the February interim budget by not including major populist announcements. Instead, it focused on addressing the political realities after the 2024 elections. There are two key aspects to this political shift.
First, the budget aimed to keep the National Democratic Alliance (NDA) united, as the BJP lacks a parliamentary majority on its own. The current NDA government relies heavily on the support of allies like the Janata Dal (United) and the Telugu Desam Party (TDP), which have 12 and 16 MPs in the Lok Sabha, respectively. Additionally, six MPs from Bihar (five from the LJP and one from HAMS) help the NDA reach the halfway mark of 272 seats. The budget aimed to meet the demands of these parties by allocating more resources to their states. The finance minister emphasized projects in Bihar and Andhra Pradesh.
Bihar was given particular attention, as it has upcoming elections next year. Prioritizing Bihar and Andhra Pradesh over Haryana, Maharashtra, and Jharkhand, which are also going to the polls, highlights the BJP’s focus on maintaining the NDA even at the potential cost of losing ground in states it currently governs.
The budget also acknowledges a lesson from the 2024 election results: the diminishing political returns from the BJP’s welfare programs focused on asset generation. One significant challenge for the BJP in these elections was from educated but unemployed individuals struggling to find well-paying jobs.
Reflecting the Economic Survey’s analysis, the budget suggests that job creation will primarily come from the private sector rather than the public sector. The budget proposes new measures to subsidize job creation in the private sector by not only enhancing skills but also sharing some salary costs for new hires. It incorporates ideas from the Congress’s manifesto, such as facilitating internships for young workers, representing the government’s push to encourage formal sector job creation.
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