In normal life situations, we find that many humans are transactional in their behaviour.
What is a transactional relationship between two humans or two human groups? It is ‘you do me a favour and I will do you a favour’.
Colloquially, it is called ‘quid pro quo’. Bribes for official decisions are transactional. Money for leaked questions papers are transactional. The Modi government elevated transactional behaviour to a high level: electoral bonds for government favours done or to be done.
Everyone understood the basis of the electoral bonds scheme. The Supreme Court, rightly but belatedly, struck down the whole scheme but maintained restraint in commenting on the intentions behind the scheme.
Kursi bachao
On July 23, the NDA government elevated transactional behaviour to a new, higher level. The major motivation behind the Budget for 2024-25 was ‘how to save the government’. It was a kursi bachao budget. The author of the Budget, Finance Minister Ms. Nirmala Sitharaman, did her job unapologetically. Her and the Secretaries’ post-budget explanations of Budget proposals exposed the crude attempt to win the support of two allies.
In return for 16 votes (TDP) and 12 votes (JD-U), the two states got ‘support (for) development’ of industrial nodes, connectivity projects and power plants in Bihar and for the Polavaram irrigation project, industrial corridors and grants for backward regions in Andhra Pradesh. The most curious assurance was that external assistance will be “expedited” or “arranged”, a promise of a pie in the sky.
In the grand bargain between the three (the Union government, Bihar and Andhra Pradesh), the states that voted against the BJP in the 2024 Lok Sabha elections lost out. The states that were cheated — according to the MPs of the states concerned — are West Bengal, Telangana, Tamil Nadu, Karnataka, Kerala, Maharashtra and Punjab, and the U.T. of Delhi.
Youth cheated
Besides the states, the vast majority of the people of India were given short shrift. The worst hit were the youth. Unemployment is rampant and the youth are desperate. According to CMIE, the all-India unemployment rate was 9.2 per cent in June 2024. Among graduates, it is nearly 40 per cent. The Periodic Labour Force Survey revealed that only 20.9 per cent of the employed earned a regular salary and, ironically, the least educated were the least unemployed.
The Budget Speech promised an Employment Linked Incentive (ELI) scheme under which 290 lakh persons will be placed in jobs by giving monetary incentives to employers and, over a 5-year period, to impart skills to 20 lakh youth, and to provide internship to 1 crore persons in only 500 companies. The gigantic numbers pointed to another gigantic post-election jumla.
In the bargain, there was no whisper of the 30 lakh vacancies in the central government and government-controlled bodies. It is also possible that the much-touted Production-Linked Incentive (PLI) scheme, on which several thousand crore of rupees have been spent with no measurable outcomes with regard to jobs, may be quietly junked. There was no reference to the universal demand for loan forgiveness in respect of the unpaid educational loans that have pushed students and their families to the edge of despair. There was also no reference to the fate of the Agnipath scheme that discriminated between one soldier and another.
Poor cheated
The other large section of the people who felt cheated were the poor. Apparently, the finance minister shares the view of the CEO of the NITI Aayog — hold your breath — that the poor in India may be no more than 5 per cent of the population. The government’s Household Consumption Expenditure Survey (HCES) had measured the Monthly Per Capita Expenditure (MPCE) in the country at current/nominal prices. The median MPCE were Rs 3,094 in rural areas and Rs 4,963 in urban areas — meaning that 71 crore people of India lived on Rs 100-150 or less per day. If we go down fractile by fractile, the picture gets gloomier. The bottom 20 per cent lived on Rs 70-100 per day and the bottom 10 per cent lived on Rs 60-90 per day. Are they poor or not?
The finance minister handed out ‘relief’ to the people:
She described the current inflation as “low, stable and moving towards the 4 per cent target”;
She gave relief of “up to Rs 17,500 in income tax” to a salaried employee who moved to the new tax regime and to pensioners.
The 71 crore people in the bottom 50 per cent of the population are neither salaried employees nor government pensioners, and the finance minister could not spare a thought for them. They too pay taxes in the form of indirect taxes like GST; as many as nearly 30 crore are daily/casual labourers; and their wages in real terms have stagnated in the last six years.
There are ways in which relief can be given to the poor. The minimum wage for every kind of employment (including for work under MGNREGA) could be raised to Rs 400 per day. With enhanced allocation of funds to MGNREGA, the average number of days of work could be increased from the current about 50 days per year to near the promised 100 days; and the issue of inflation could be dealt with greater seriousness.
The prime minister and the finance minister should remember that the youth and the poor, among other citizens, have a powerful weapon in their hands — the vote.
They severely warned the BJP in the LS elections, 2024. They gave a tight slap in the 13 by-elections in June 2024. Elections are around the corner in Maharashtra, Haryana and Jharkhand followed by more in 2025. The youth and the poor will not forget that they were cheated on July 23, 2024.
