An Ode to Middle Class

Budgets are interesting only for a few days of entertainment and nothing more. Many of the plans announced don’t get implemented and nobody goes back to previous years’ budgets to analyse how much was actually spent and how many of those announced plans were actually implemented.

Having said that, what budgets help in understanding is the general direction a government is taking. It’s like what we do with our salary. As soon as our salary is credited the first thing you do could be paying your bills, or parking a percent into your separate savings account or you buying a new smart phone in Flipkart, or, better still, heading to the nearest bar! That may not be who you are, but we can largely form an impression of your personality and preferences. Government’s budgets are more or less like the first things we do on the payday.

Considering this analogy, BJP’s budget is no different from that of Congress. ‘If you closed your eyes and heard Jaitley, you would think it was Chidambaram speaking,’ quipped Arvind Kejriwal. For once, I totally agree with him. Except the decadence of building the world’s tallest statue for Sardar Patel, which I’m sure Chidambaram wouldn’t have included in his budget, or perhaps announced a tall statue for Rajiv Gandhi in Rae Bareli. And the rest of the budget is quite the same, so much so that, there hardly any difference between Chidambaram’s interim budget and Jaitley’s one. If you don’t believe me, see this article in The Hindu(1).

It is to be largely expected, however. The headlines across the media houses were about the raising of exemption limit for income tax. Before the elections, Jaitley famously demanded that the exemption limit be raised to 5 lakhs. Now being at the helm of affairs himself, he couldn’t go beyond half a lakh. I’m not asking why here. What Jaitley did was obviously being a responsible minister. But my concern is about this piece of news garnering the headlines and not others. What does it say?

It shows that this government is about middle class and this budget is for the, by the, and of the middle class. That is to be expected, because it is the middle class that largely put up this government in its place. Also, the Indian media is also mostly for, by, and of the middle class. Nobody talks about 8 lakh crore agricultural credit made available in this budget. Or the allocation of 5000 crore for rural infra-structure. Or the allocation of 5000 crore for building agricultural warehouses.  There will be new agricultural universities in Assam, Jharkhand, Andhra Pradesh and Haryana. There will be 1000 crores dedicated to building toilets in rural India. FDI will be encouraged in farming infra-structure. And 500 crore will be spent in implementing 24×7 power in villages.

These things don’t matter to the media much. Not to us either. We want to know whether cars and mobile phones will be cheaper, whether cigarettes will be costlier and how much we can save on income tax next year.

In case you didn’t know, here a piece of information for you: A person earning 2.5 lakh per annum is actually affluent in Indian standards. The highest per-capita income is in Goa where an average worker earns a little less over 11,000 rupees per month. The lowest, of course, is in Bihar where an average worker earns around 1,300. See here (2)

So someone earning 2.5 lakh, i.e. 20,000 per month is actually in good place. But, even at that stage, we want to know if we can even save on our taxes. Does it mean that we don’t care much whether those in Bihar who struggle to make a living at 1,300 rupees might need our tax money?

Let’s not get into the argument that our tax money goes only to fund the vanity of our politicians and therefore the less goes there the better. If you believe in that you should not be paying taxes at all. So let’s continue with our original discourse.

The point I’m trying to make here is that the focus of the budget remains acutely middle class. BJP or Congress they are forced to pander to the whims of the middle class. We are very happy with the budget if it gives us exemption on income tax, increases the exemption on home loan interest and if the price of computers and smart phones come down. The real problems rarely come into our focus.

However, funds do get allocated to the ‘real problems’ , of malnutrition, sanitation, clean water, primary education, health care, female infanticide, teen pregnancy, vaccination and hunger. But they don’t garner the front pages. Or get debated and discussed in the media debate shows. Even in this budget, there’s 1000 crore ‘intended’ to be spent on sanitation, in other words building toilets. But how is this going to be achieved? How many toilets are planned? More than toilets, how is the ‘awareness’ on open defecation going to be created among the rural public, because it came out in one study that the rural public feels it is ‘natural’ to be defecating in the open and do not consider using the toilet a ‘great idea’. Even in the villages where the government has built toilets in homes, only women use them and that too only during their periods.

The previous government set out to build toilets and allegedly siphoned off half the money. That didn’t even get page 3 attention. But one man siphons money off of mobile signals and that rocks the nation and pulls down a state government. Thousands of crores are handed out to corporates as ‘incentives’, Adani, that poor, ailing businessman gets prime land at 14 rupees per square feet and we don’t bat an eyelid. But all of us become angry with this Food Security Act, so much that we fear that this act will bankrupt our nation. Never mind the fact that, on social security spending, India’s 1.7% of is one of the GDP is among the lowest even among the Asian countries. See here (3)

We live, work and think as if that over 400 million people don’t exist in India. The other day, whilst talking about my experiences in England with someone, he remarked that Chennai too has become ‘advanced’. Surprised, I asked how and he said ‘Have you been to the Express Avenue? And did you know Starbucks has come here?’

Unfortunately this is essentially the idea of development that many of us carry. I’m not sure if our governments too think this way or it’s just that they are too smart to understand how we think and simply feed into our desires.

Of course I didn’t bother to tell him that nearly 50% of India is still defecating in the open, that 43% of children below 5 years are suffering from malnutrition, that even among the south Asian countries, on factors like primary education, vaccination and protein consumption we are just one level above the bottom most country, Pakistan. Not many of us know that even Bangladesh, which is often ridiculed in the Hollywood films for absolute poverty, is doing better than India on all these human development factors.

An ideal budget to me should be lending its focus onto these factors. There is no need for tax sops and incentives to the corporates. All the government need do is to make sure that the corporates are allowed to do their business without bureaucratic hurdles. That alone would be the biggest incentive. And as for the middle class, the government simply need to let them be. To a middle class man or woman, between 2 lakh to 2.5 lakh, the tax savings is not going to be life or death matter. But the factors that I described in the previous paragraph are often the struggle between life and death, or between decent life and humiliating life. On these, I haven’t seen the successive governments paying any attention at all. Yes, there have been fund allocations, in the rage of 500 to 1000 crores, as the current budget has also done. These are drops in an ocean in the 8 lakh crore budget. Even with that fund, there is no nation-wise strategy or agenda. There is no whipping up of awareness campaigns or taking along people, curbing red tape and corruption on these schemes to ensure that the allocated funds get spent, or involvement of media on these schemes.

With this budget, it has become very clear that this government too, like the previous government, going to work only towards the betterment of our middle class. So we are going to get bullet trains, smart cities, moster highways and, of course, a super statue that’s going to dwarf the Statue of Liberty. We, the middle class, can feel further exhilarated that we’ve become like the US, or perhaps even outgrown them.

(1)  New Government, Old Priorities –

(2)  Goa’s per capita highest, Bihar’s lowest –

(3)  On the mythology of social policy –