India’s government unveiled on Friday a raft of budget sweeteners for farmers, the middle class and also cows, as Prime Minister Narendra Modi seeks to shore up support with elections looming.
Thousands of farmers hit by low produce prices, crippling debt and volatile weather have killed themselves in recent years. This and rising joblessness have hit Modi’s popularity.
The announcement of a new national cow board to look after bovine welfare and boost dairy production meanwhile was seen as a sop to India’s majority Hindus — Modi’s base — who believe the animals are sacred.
“This government will never shy away from honouring our mother cow,” a hoarse Piyush Goyal, interim finance minister, told a raucous parliament as he unveiled the interim budget.
The budget was the last before the country of 1.25 billion people, Asia’s third-largest economy and the world’s biggest democracy, goes to the polls in elections due by May.
The opposition has been emboldened by a series of state election victories late last year, including in the “cow belt” region of northern India that propelled Modi to power in a landslide in 2014.
Modi and his Hindu nationalist Bharatiya Janata Party (BJP) promised to create millions of jobs and to help India’s urban middle-classes, who are traditional supporters of his right-wing BJP.
But a crisis in Indian agriculture, rising joblessness and difficulties for the middle class have dented Modi’s image.
On Thursday the Business Standard published what it said was an official report buried by Modi’s government showing unemployment at 6.1 percent, the highest since 1972-3.
The government dismissed report, saying the data hadn’t been finalised yet.
– Direct handouts –
Goyal said that 120 million “small and marginal” farmers will receive direct annual handouts of around 6,000 rupees ($85), costing the government the equivalent of around $10.5 billion.
Other measures include a full tax rebate for those earning up to $7,000, providing a tax benefit of some $2.6 billion to an estimated 30 million people in the middle class.
“Under the visionary leadership of honourable Prime Minister Shri (sir) Narendra Modi, we have given the most decisive, stable and clean government and have undertaken transformational structural reforms,” Goyal said.
“I can proudly say that India is solidly back on track and marching towards growth and prosperity. We have prepared the foundation for sustainable growth, progress and better quality of life for all our people,” he said.
He also predicted that India’s $2.3-trillion economy would more than double in size in the next five years.
“We are moving towards realising a new India by 2022,” Goyal said.
“We are poised to become a $5-trillion economy in the next five years and we aspire to become a $10-trillion economy in the next eight years,” he said.