Election Budget



You will find no number crunching, no jargon and no guru speak from so called Dalal Street mavens on the Budget. Sutanu Guru & Pramod Kumar bring you the real budget story – a story of the lead up to the 2014 Lok Sabha Elections.

Days after the Congress-led UPA won that famous victory that left die hard pundits gasping for breath and excuses, some people were quietly and furiously busy in one house at Gurudwara Rakabganj Road and two houses in South Avenue in Delhi. Many of you must have read about how that non-descript residence in Rakabganj Road was actually the war room of Rahul Gandhi; most of you may not be aware that the house was ‘loaned’ by the owner of one of the biggest media houses of the country. The foundations for the Union Budget 2009-10 that was presented by Pranab Mukherjee were being laid by these mostly low profile characters who passionately believe that Rahul Gandhi must, and will, become the Prime Minister of India by 2014. Do remember: Pranab Mukherjee was yet to be ‘officially’ announced as the Finance Minister at that time.

Soon after the Cabinet was formed, it met formally to vet the address of President Pratibha Patil to the Joint session of Parliament. This meeting itself, more or less finalised the broad contours of the forthcoming budget. One key decision taken during this meeting was to abolish the controversial and widely criticized fringe benefit tax. Some of you who do recall the ‘routine’ and ‘yawn inducing’ speech of the President in the first week of June will not be surprised at all by the speech that Pranab Mukherjee finally delivered on July 6. In fact, even as the Finance Minister was busy meeting industrialists, industry lobby bodies and representatives of trade unions, farmers and many other self appointed guardians of public well being, he always found time to meet and discuss the broad agenda of the forthcoming budget with the other members of the core committee of Congress. This core committee includes Sonia Gandhi, Manmohan Singh, Pranab Mukherjee, P. Chidambaram and Ahmed Patel. In addition, informal channels with Rahul Gandhi’s team of close advisors were always open.

Top Congress leaders did discuss issues like disinvestment, relaxation of foreign investment norms and other so called ‘reform’ oriented policies that so excite the corporate sector, Dalal Street and most of mainstream media in the country. But then it boiled down to answering that one key question: should Pranab Mukherjee present a budget for India or Bharat? Now, you and I know the verdict was unquestionably in favour of Bharat. In that sense, this budget makes a decisive break from past budgets in the sense that it is unabashedly about Bharat and does not even bother to offer token gestures to India. Says Congress general Secretary Digvijay Singh, “This budget was always going to be focused on the poor, the farmers and the bottom heap of the population.” Referring to the displeasure and disappointment shown by corporate India and Dalal Street, Singh adds, “Sure, some sections are justified in being unhappy because they have not got the benefits they were hoping for; but then the reality is that you cannot satisfy everybody.”

Absolutely. For decades, successive governments have paid lip service to the poor during budget time while doling out sops to the rich. This budget has finally broken through that vicious cycle of dishonesty, double speak and double standards. This dramatic transformation in the Congress has been going on for quite a while; only it was either largely missed or ignored or jeered by the media when Rahul Gandhi was trying to get across his message of connecting with the real India. Now, even brand gurus accept that the Congress strategy has worked wonders. Says, Santosh Desai, CEO of Future Brands, “The Congress has brought local leadership in their planning strategy over the last few years, which was not their forte in the past. Thus their focus is aam aadmi, but they deliver what they say. Thus, in branding, if you say and deliver, then the effect is clearly visible.” So Dalal Street might be crying. But Pranab Mukherjee has delivered what the Congress has been intending for a while – to completely convince the aam aadmi, the voter, that the government and the party are actually working for them. And don’t be mistaken in the belief that the Congress will use only the Union Budget to implement its strategy for 2014. Recall the exact words used by Pranab Mukherjee very early on his speech on July 6, “While we are determined to convert our words into deeds, members would appreciate that a single budget speech cannot solve all our problems, nor is the Union Budget the only instrument to do so.” So Finance Minister Pranab Mukherjee is not the only ace that the Congress will deal while leading up to 2014. There are many other powerful and transformational jokers in the pack.

Often, great tragedies lead to unexpected and seemingly ‘accidental’ benefits and opportunities. By early 2008, the top honchos, strategists and think tanks at Congress had realised two things very clearly. The first was that the party must be ‘seen’ to be doing something concrete for the aam aadmi if it had any hope of being re-elected to power. This realisation resulted in the 2008 Budget where the then FM P. Chidambaram announced a Rs.60,000 crore farm loan waiver package, among many other anti-poverty social welfare schemes. But party insiders also realised that these gestures were not enough. The second realisation was that both Home Minister Shivraj Patil and Finance Minister P. Chidambaram were becoming burdens on the government in terms of image and perceptions. Why Shivraj Patil was becoming a burden is known to everybody; his habit of changing clothes after repeated terror attacks had become a thing of public ridicule and acute embarrassment for Sonia Gandhi and Manmohan Singh. Why Chidambaram came into this category is less well known. According to Congress insiders, Chidambaram was too closely identified with ‘neo-liberal’ economic policies. Besides, says a very senior Congress leader, who obviously doesn’t want to be named, “We started getting complaints even from top industrialists that he was rude to them. Once, he made a team of top businessmen wait like supplicants inside his chamber and busied himself reading and writing on files. No doubt, he is very competent. But we could not afford his arrogance to antagonise so many Indians.”

And then 26/11 happened. Home Minister Shivraj Patil had to go and P. Chidambaram was given the onerous task of handling the Union Home Ministry. The Finance Minister’s post became vacant as a result. For a while, Prime Minister Manmohan Singh gamely plugged the gap. But that was an interim period when he and Sonia Gandhi were deliberating on who would best serve the long term interests of the Congress. Pranab Mukherjee was really the automatic choice. The rest, as they say, is history in the making!

Yes, history in the making. History because the team that is working towards Rahul Gandhi becoming Prime Minister by 2014 is aware of one historical precedent and a future challenge that could bedevil the process that has been started with this unique Pranab Mukherjee budget. The historical precedent refers to the historic mandate won by Rahul Gandhi’s father Rajiv Gandhi way back in 1984 and how he lost (squandered?) it by 1989, allowing former Gandhi family acolyte V. P. Singh to lead one of the worst ever governments of India as Prime Minister. The Rahul team is aware that the Rajiv vision was hijacked by cronies who destroyed the credibility of the Rajiv administration and made it appear corrupt. That was the time when close aides of Rajiv like Sam Pitroda, who helped launch the IT and telecom revolution in India, had quit in disgust. (In fact, Sam Pitroda – who maintained close links with the Gandhi family over the years – was given the momentous task in the previous Congress government of heading the Knowledge Commission and revamping India’s education and human resources system. Everybody knows now how the then Minister in charge Arjun Singh frustrated and stymied all his efforts!) The Rahul aides simply don’t want a repeat of that ‘historical’ blunder. The future challenge is very simple: How to ensure that a rejuvenated Congress under Rahul gets past the mark of 300 seats in the next Lok Sabha elections due in 2014. And as Pranab Mukherjee himself stated in his Budget speech, his salute to ‘Bharat’ and pointed snub to ‘India’ is just one of the many elements of the get ‘Rahul into Race Course Road’ strategy. And as we emphasised earlier, there are many other jokers in the pack.

Perhaps one of the biggest ones is Nandan Nilekani, arguably the first active entrepreneur who has been given the rank of a Cabinet Minister and asked to take charge as the Chairperson of the Unique Identification Authority of India. This much hyped appointment was great fodder for the media a few weeks back. By the time you read this, Nilekani would have been given a formal farewell by his colleagues at Infosys on July 8, 2009 and become a government man. But most of what you read in the media about how Nilekani was given this onerous responsibility of giving tamper proof biometric identity cards to 1115 million Indians is way off the mark. Like many other things, Nilekani actually got this job almost by accident and because of a great tragedy.

After 26/11, a whole lot of entrepreneurs and industrialists were called for a meeting by the government to get feedback on losses and suggestions on how to improve internal security. Nilekani was one of the invited ones and he said that his company had already initiated a successful pilot project that enabled each person to get a unique identification number. At that time, according to Congress insiders, the then newly appointed Home Minister P. Chidambaram did not pay much attention to the suggestions made by Nilekani. That was then. Soon after Sonia Gandhi and Manmohan Singh scripted the famous Congress victory, a Cabinet Committee of Security (CCS) was convened – attended by the three chiefs of armed forces, the directors of IB and RAW, P. Chidambaram, Pranab Mukherjee, National Security Advisor N. R. Narayanan and second term Prime Minister Manmohan Singh. Nilekani’s suggestions were discussed and approved. Of course, in the meanwhile, both Montek Singh Ahluwalia and Sam Pitroda (Yes! He is back with a vengeance!) were pushing hard for Nilekani and his Unique Identification project. Lo and behold, the man meets Manmohan and gets his brief. But the beauty lies in how the Congress has utilized this ‘internal security’ related issue into one that can transform the delivery of social welfare schemes for the poor. Sure, Nilekani will first start with Assam and some North Eastern states and some pilot projects. But once the process gathers momentum, Congress strategists hope that Below Poverty Line people will actually be identified well before 2014 so that funds meant for them actually reach them (Incidentally, this was one of the major suggestions made by this magazine while presenting its Alternative Budget in the previous issue).

The task for Nilekani is not going to be easy as he is already confronting the numerous mine fields that a party like Congress can offer. Many politicians and bureaucrats are not happy with his appointment. But then, insiders say that Nilekani has been assured of full fledged support by both Manmohan Singh and Sonia Gandhi; the kind of support they gave to the NREGA program even when critics were rubbishing it because of leakages and corruption.

The vision of the Rahul team is clear on this count. They know that for Rahul Gandhi to become Prime Minister of India by-or in-2014 and be effective, the Congress has to win a majority of Lok Sabha seats. The only way it can do that is by winning a majority of seats in states like Uttar Pradesh, Bihar, Gujarat, Tamil Nadu and Madhya Pradesh. By now, everyone knows about the ‘miracle’ that Rahul Gandhi has performed in Uttar Pradesh. His team is already working furiously towards repeating this in the other states. In the bargain, if past and potential allies like Mayawati, Mulayam Singh Yadav and Lalu Prasad Yadav are sidelined, then so be it. In these states, if poor citizens actually get a tamper proof unique identification card that will actually deliver them funds, resources and opportunities, you don’t need a school boy to know that Rahul will get his 300 seats.

Apart from Pranab Mukherjee, Nandan Nilekani and many other key ministers who are expected to better the performance of UPA-1 (Kamal Nath as Surface Transport Minister is just one example), it is Human Resources Development Minister Kapil Sibal who will play a key role in this Rahul-2014 strategy. His vision for revamping the education system in India has already drawn huge amounts of attention and controversy. (See exclusive interview elsewhere in this magazine). Virtually everyday, you read a story in the newspapers that talks of how Congress leaders are upset with Sibal for making such sweeping pronouncements. The venom of such ‘planted’ stories reveals the challenge that Sibal will face as he tries to deliver the demographic advantage to India. But then again, insiders insist that both Sonia Gandhi and Manmohan Singh are very much in the loop when it comes to what Sibal will do. If Sibal is even 30% successful in implementing what he has promised to deliver during his stint, he will surely earn his place as one of the best ever education ministers that India has ever had.

Does it all sound too hunky dory at the moment? To an extent, yes. If you go back to December 1984, when Rajiv Gandhi addressed Congress workers and accused his own party of having become one of rent seekers and corrupt agents, there was a palpable sense of excitement amongst the youth in India. Sadly, Rajiv was let down by his key aides. Rahul Gandhi does not want to repeat those mistakes. To that extent, you will perhaps never read a story about how the 1,000 odd villages earmarked by Pranab Mukherjee during his Budget speech for special attention will soon become a happy hunting ground for the Rahul Team. Nor will you read stories about how pilot schemes to deliver social welfare funds to the poor in these 1,000 odd villages will be the fulcrum on which the future Congress strategy will evolve. Nor will you read about how the Congress strategists have absorbed the Verappa Moily Committee report on Future Challenges and Opportunities and are now busy implementing it. You might not even read anything much more about Kalawati, the Vidharbha widow who became so closely associated with Rahul’s efforts to connect with ‘Bharat’. And of course, you will perhaps never publicly hear industrialists like Mukesh Ambani, Rahul Bajaj, Venu Srinivasan and Harsh Pati Singhania complain about Pranab Mukherjee completely neglecting and ignoring them. In fact, the beauty of this new Pranab ‘Doctrine’ is that he has informally promised the corporate honchos of all help and succour even beyond the Budget if they really need so. Nor has he said anything at all against liberal economic policies so loved by the pink papers. For all you know, disinvestment might just happen – albeit in a low key manner!

But you will probably hear again about that non-descript house in Rakabganj Road by 2014. And, you and I will surely hear Pranab Mukherjee again on February 28, 2010. By then, you can be sure that this seasoned politician would have added a few more threads to the Rahul-2014 strategy. PS: Did anyone say anything about the bears ruling the stock markets?