India’s finance minister Arun Jaitley is the calm voice at the top of Narendra Modi’s Bharatiya Janata Party-led government. His role is usually not to worry so much about the economy, but to try to present a sense of sanity and reasonableness as the government’s spokesman and information minister, while Modi avoids making many comments apart from mega rally speeches, and Amit Shah, the party’s president, exudes fear-inducing Hindu nationalism.
Jaitley has performed both the economy and information functions today with his annual budget speech that ran for just over 90 minutes. He focussed heavily on helping the rural poor with schemes that aim to begin to double farmers’ incomes by 2022 (an over-optimistic and probably unachievable target), and on accelerating investment in infrastructure, especially irrigation.
That should, the government hopes, increase consumer demand and economic growth, while also (though Jaitley of course did not say so) conveniently countering the Congress Party’s opposition line that the government is “not pro-poor” at a time when state assembly elections are looming.

Arun Jaitley and his team leave the finance ministry for parliament
Three days ago, Jaitley was performing the same calming role in an often screamingly angry two-day parliament debate after caste-based riots in the nearby state of Haryana had led to widespread violence and looting that cut water supplies to Delhi. The previous week had been dominated by clashes and protests in Delhi’s Jawaharlal Nehru University with rough police action and court cases, encouraged by government ministers, that irrationally accused students of sedition.
Image low
Today’s budget has therefore come when the image of India and the 22-month old Modi government has been damaged, and something is needed to revive confidence. Jaitley’s speech of course dealt with economic confidence, but it is really more important for the government to boost confidence in its politics and to show that it is not following a pre-planned policy of social divisiveness and restrictions on the freedom of speech aimed at strengthening Hindu nationalism and at enhancing the BJP’s Hindutva appeal..
Two friends visiting Delhi in the past week from the UK and US have told me how, viewed from abroad, India looks the best hope among major economies with its 7.6% growth at a time when other countries have problems. But, they both added, the social unrest and the divisive Hindu nationalist and repressive image of the government, was worrying investors.
It is against this background of social unrest and the government’s image problem that Jaitley made his speech today. His most important macro economic announcement was that he has not relaxed the government’s target of reducing the current 3.9% fiscal deficit to 3.5% of gdp in the coming year, despite being given conflicting advice that stimulating growth was more important.
Jaitley’s economic advisers, who produced the finance ministry’s annual economic survey at the end of last week, are suggesting that this year’s official 7.6% (some critics say inflated) growth figure might drop to 7% in the coming year instead of rising.
Nine pillars
Jaitley presented what he called a “transformative agenda”, with “nine pillars” covering benefits for farmers, rural communities, social issues such as health care, industry and skills, infrastructure, financial sector reforms, and governance and ease of doing business.
Proposed spending included $2.5bn in 2016-17 on delayed irrigation projects, $32bn on rail, road and other infrastructure. Another $3.6bn was announced to begin re-capitalising financially crippled state banks that have been hit by their often politically-inspired largesse of allowing massive bad loans to over-leveraged Indian companies.
But there were few significant economic reforms in the speech. Foreign ownership through direct investment is to be allowed in food processing and marketing businesses. The foreign portfolio investment limit in public sector corporations (apart from banks) is to go up from 24% to 49%, and 15% foreign investment will be allowed in stock exchanges, up from 5%.
Various measures were aimed at improving the ease of doing business in India’s rule-bound heavily bureaucratic environment, and a proposed bankruptcy code will ease the closure of bankrupt financial firms.

Palaniappan Chidambaram with his budget speech in 2013
Also included were a complex array of tax measures including some relief for small businesses, and an attack tax avoidance, plus a fresh effort (following a largely unsuccessful scheme last year) to persuade tax-payers to reveal undeclared assets.
Jaitley said that companies would not be hit, as was done in the past, by retrospective tax demands. He agreed to waive penalties and interest on outstanding payments, but failed to reassure companies such as Vodafone that are involved in outstanding multi-billion dollar cases.
Overall, the budget sounded like a long list of worthwhile innovations and incentives, though critics said it lacked an overall big idea, and that it would be difficult if not impossible to implement projects fast enough to use all the funds, especially in areas such as irrigation. Palaniappan Chidambaram (above), the last Congress government’s finance minister, noted that there had been no mention of (declining) exports, which was certainly odd. There was also virtually nothing to encourage private sector investment in manufacturing, and no mention of spending on defence where there was only a marginal budget increase despite inflated pension and pay commission costs.
Exports and the private sector however were not the targets of this politically targeted budget, which was aimed, as I have said, at shifting the government’s image from being pro-corporate to caring for the rural poor.
Now Jaitley’s job is to show, and to persuade his prime minister to show, that the government also cares for India being an open and free society without the repressive Hindu nationalist overtones.






The financial price is also high – about Rs7 crore (just over $1m) a day for India, according to reports, because of the high costs of air-lifting supplies by helicopter.
The trouble started in 1984 when Pakistan was dispatching groups of Japanese and other mountaineers to the area. India suspected Pakistan’s motives and mobilised its army, as did Pakistan – I was on holiday in the Pakistan’s Northern Areas during the summer of 1984 and saw helicopters flying off to the glacier from Skardu in Gilgit-Baltistan.


The biggest display was staged by the Delhi Art Gallery (DAG) with two large spaces, one devoted to its impressive collection of Indian masters. The gallery ran its own lectures and school visits, separate from those organised by the fair, as well as a daily newspaper, firmly establishing it as the biggest spender among India’s galleries. It even had a Raza painting reproduced in a pattern of lines and grids on acrylic (left and below) for blind people to be able to explore the work, along with a description in Braille.
Curiously however it did not show 


Thronged with a record 330,000 “footfalls” (a definition that includes repeat visitors) over five days, the festival, now inelegantly known as JLF, continues to grow and defy the stresses and strains of crowd control by absorbing the thousands of people without disturbances.
Ruskin Bond (left), an India-based veteran in his early 80s, seemed to hanker for the days before television and literary festivals when writers could ”remain anonymous and not be known as a face”.

Critics often say that these are primarily publicity stunts to boost Modi’s image – typified by him wielding a broom for Swachh Bharat, and being lauded by a long line of top businessmen with adulatory speeches at the launch of Make in India.
The base was not properly protected and defended against such terrorism, despite being just 25 kms from the border with Pakistan, and the response by security forces was muddled and badly organised, though the attackers did not manage to destroy any aircraft. There are also suggestions that India’s border paramilitary forces may have been involved in 

Manohar Parrikar, India’s defence minister, who was not in charge of the operations, seemed uneasy and ill-prepared when he (not Doval) was paraded at a media conference (right) on January 5.






Abe’s talks with Modi yesterday (Dec 12) produced a string of deals carrying, unsurprisingly, a billion dollar tag – this time $35bn, which is the same figure that was attached to announcements (some different, some the same) when Modi visited Japan in September last year.
The rapprochement between Pakistan and India first appeared when the countries’ two prime ministers were photographed chatting intensely (left) at the opening of climate change negotiations in Paris on November 30. This began to unravel blockages to talks that had been caused both by India over whether Pakistan should talk to separatist leaders from Indian Kashmir, and by Pakistan wanting the sovereignty of Kashmir to be included in any agenda.
The Gandhis have been protesting because they were ordered on December 7 to appear in a Delhi court on December 19 to explain alleged irregularities in financial dealings involving a defunct Congress newspaper, the National Herald that owns valuable properties in Delhi and elsewhere, and a company, Young Indian, controlled by them and two other Congress officials.
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