Understanding the Political Motivations Behind the
2024-2025 Union Budget
BY AALIYA BUKHARY/ AUGUST 2, 2024
Multiple accusations have been made about the influence of regional biases in the Union Budget 2024-25, bringing into question its inclusivity and fairness. Central to understanding the veracity of such accusations is the role of political alliances in the 2024 Elections.
he Union Budget for the Financial Year (FY) 2024-25 was unveiled by Finance Minister (FM) Nirmala Sitharaman on 23rd July 2024. Since then, it has been subject to scrutiny, both by the general public and by politicians. Rahul Gandhi, the Leader of the Opposition in the Lok Sabha, labelled the Budget as the “Kursi Bachao” Budget (Dhoot, 2024). In order to understand the rationale behind such remarks, the political scenario of the Bharatiya Janata Party’s (BJP) victory in the 2024 General Elections must be examined.
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The BJP’s performance in the Elections was subpar. While they still managed to come to power with Narendra Modi as the Prime Minister for a third term, their boast of securing 400 seats in the Elections did not come to pass. The Party struggled to gain a majority on its own and won only 240 seats out of the required 272. According to The Hindu (2024), out of the sitting MPs that recontested, 37% lost. This proved to be a significant blow for the Party, despite its overall victory. It lost important seats in Ayodhya and Amethi in Uttar Pradesh, despite the inauguration of the Ram Mandir earlier this year. The reason for their loss was simple: its communal politics did not work. While the BJP may think that making promises of preventing land grabs from “intruding” Muslims and employing Nazi rhetoric is enough to sustain power, the citizens of India, to some extent, have proven that ground-level policy change is a far better yardstick for measuring the effectiveness of the government’s political rule.
Thus, for the BJP to come to power in 2024 for the next five years, the support of the Chief Minister of Andhra Pradesh N. Chandrababu Naidu (President of the Telugu Desam Party) and the Chief Minister of Bihar, Nitish Kumar (President of Janata Dal (U)) was instrumental. Seemingly, then, the reward for their political support has come aplenty in the Union Budget. “Special financial support” of INR 15,000 cr has been provided to Andhra Pradesh after recognising its “need for capital,” in the words of FM Nirmala Sitharaman (PTI, 2024). This allocation is to aid the early completion of the Polavaram Project for irrigation and finish the completion of the Industrial Corridor. The former is important for the farmers in the State, while the latter improves road and rail transportation networks. This signals a significant investment in the infrastructural development of Andhra Pradesh and an effort towards improving farming conditions.
Pictured: Image from ThePrint
As for Bihar, INR 47,000 cr has been allocated (Kumar, 2024) for multiple highway and power projects, the development of medical colleges and hospitals, and more (Singh et al., 2024). FM Sitharaman also promised that the State’s requests for external help from developmental banks would be met. Development banks are crucial for the development of infrastructure and the economy at large since they readily provide long-term finance to risk-prone sectors. This paints an optimistic picture for the future of Bihar – a shift towards better healthcare institutions and better connectivity for access, alternative sources of power, and financial support in times of crisis.
What seems to be the problem then? After the Budget was announced, several states such as Jharkhand and Bengal accused the Centre of neglecting their needs. The Times of India (2024) reported that the Budget was called the “Andhra-Bihar Budget” by the Chief Minister of West Bengal Mamta Banerjee (All India Trinamool Congress). In response to criticism for supposed political bias, FM Sitharaman stated that not naming a State does not mean they are ignored under Central schemes.
Pictured: Illustration by unknown via Pinterest
It is important to question to what extent the Budget is truly politically unmotivated. Have non-BJP-led states been given equal importance, or, at least enough resources to tackle pressing issues? Seemingly not, as the Chief Minister of Jharkhand Hemant Soren (Jharkhand Mukti Morcha) claimed that the Centre provides no support to the State for housing the poor and for natural disasters: “There is no place for backward people, Dalits, tribals and minorities in the politics of the BJP because it represents the ideology that supports capitalism” (Business Today Desk, 2024; PTI 2024). The State is also owed INR 1.36 lakh crore in coal royalties, and these dues have been ignored for 20 years.
CM Banerjee made similar statements about the “anti-poor” nature of the Budget. Specifically, she mentioned cyclone Amphan which led to widespread destruction in Bengal and yet, the State has been deprived of flood management funds. It is hard to deny the claim that such allocations are politically motivated when the BJP-allying states of Bihar (allocated INR 11,500 cr), Sikkim, and Uttarakhand received funds for flood prevention and management while Bengal did not (Janyala et al., 2024).
On the contrary, FM Sitharaman claims that Bengal has received aid but has yet to implement schemes effectively. How could the State do so, when much like Jharkhand, the Centre owes Bengal INR 1.71 lakh crore (Bhattacharya, 2024) for schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)? No other explanation has been provided for such disparities, making CM Banerjee and Soren’s assertions hard to ignore.
Further insights into the veracity of these accusations may be gained by examining the treatment of other BJP allies in the Budget. Odisha, for example, did not receive its share of agricultural benefits as promised in the BJP Manifesto before the elections (Mishra, 2024). This hints at the fact that the problem with the Budget is more focused on political partiality towards Andhra Pradesh and Bihar, rather than a simple distinction between BJP-led and non-BJP-led states.
The Budget has also been dubbed “anti-people” due to the decline of funds for minorities and welfare schemes. The reality behind this claim is revealed upon examining the provisions for the Ministry of Minority Affairs and schemes that benefit women and children. While the focus of the Budget is youth employment and inclusive development, the allocation for schemes that benefit students from minority communities tells a different story. In the previous Financial Year of 2023-24, the allocation for the Ministry of Women and Child Development was INR 25,440 cr. The Budget for the current FY hikes this allocation by 2.5% and assigns INR 26,092 cr to the Ministry. POSHAN 2.0, Mission VATSALYA and Shakti, Saksham Anganwadi, and the Nirbhaya Fund have received the most funds (PTI, 2024). Most of these schemes target the nutritional problems women face, and an increased allocation comes with the hope of a decline in women’s malnutrition and better child support.
While certain news sources like The Economic Times and the Deccan Herald have called this increase “meagre”, development economist Dipa Sinha (2024) has provided an interesting analysis of the reason for this hike. According to her, the increase seems to be a result of “accounting trickery”. This supposed malpractice receives its name from the Parts under the Gender Budget Statement (GBS) – a combined statement of “budget provisions under different schemes across ministries and departments that benefit women and girls”:
1. Part A: schemes with 100% budgetary allocation for women
2. Part B: schemes with at least 30% budgetary allocation for women
3. Part C: schemes with up to 30% budgetary allocation for women
Schemes that never had any part of their budget allocated for women, such as the Reform Linked Distribution Scheme (Ministry of Power), are suddenly mentioned under Part C of the Statement without any explanation. Another scheme part of this misrepresentation is the National Rural Livelihood Mission (Ministry of Rural Development) which focuses on promoting self-employment among poor people in rural areas. From FY23 to FY24, the increase in allocation is less than INR 1,000 cr. However, because the scheme is now listed under Part A, the entire Budget receives a boost of over INR 7,000 cr. According to Sinha, the only new scheme is the Namo Drone Didi scheme aimed at the upliftment of women from self-help groups.
Thus, what has changed is how certain schemes are reported instead of a greater allocation for schemes specifically targeted towards women, girls, and children. Instead of addressing contemporary problems plaguing women in India, be they in rural or urban set-ups, the Centre believes it is far more important to improve the optics of allocation. “Inclusive development” cannot be achieved with the help of such misrepresentations. Is deceit the only way for India to truly be progressive? If simply restructuring the GBS is enough for the Centre to say that they have a renewed interest in uplifting women and increasing employment, India’s future may still be bleak.
To make matters worse, a mere 0.066% of the total Budget was allocated to the Ministry of Minority Affairs. Except for the post-matric scholarship for students from minority communities, no other scheme has seen a hike in budgetary allocations. The post-matric scholarship is awarded to students from minority communities in grades 11 and 12 for technical, vocational, and undergraduate courses. The Centre’s focus on the skill development of minorities is lacking too, since INR 3 cr has been assigned for such schemes, as opposed to the INR 64 cr from FY23 (Usmani, 2024).
Where have these funds been diverted? Surely, not to fund the Census that has been pending since 2021. Promises were made to conduct the Census after the 2024 Elections. And yet, the National Population Register was assigned INR 3,109 cr, even though an expenditure of INR 12,700 cr was sanctioned in 2019 by the cabinet (Team TOI, 2024). This leaves little hope for the census to be conducted any time soon, let alone in the present FY. As Professor KP Kannan explains, decision-making at the micro level is virtually impossible in the absence of Census data. For example, the Public Distribution Scheme (PDS) cannot be modified with present numbers, resulting in inefficient distribution of food grains and other essentials among beneficiaries. The exact number of beneficiaries excluded from receiving aid is more than 10 crore, as found in the research conducted by Jean Dreze, Reetika Khera, and Meghna Mungikar (Hrishikesh, 2023).
Professor Jean Dreze (2024) provides more insights into potential reasons behind this delay, or as he calls it, “an abuse of privilege and infringement of people’s fundamental rights”. According to him, the Census is being delayed to in turn delay the delimitation exercise the government is obligated to carry out. This exercise adjusts the Lok Sabha seats of constituencies relative to their population according to data from the first census after 2026. If the census is conducted in 2025, then delimitation would happen after the next census conducted in the 2030s. The result of this exercise would redistribute influence in favour of the Northern States, as the population of those states has grown faster compared to their Southern counterparts. He states that in anticipation of the 2029 Lok Sabha elections, the BJP wants to avoid any agitation from states in South India. Another possible explanation is the decision for one-third of Lok Sabha seats to be reserved for women, which is to come into effect after the delimitation exercise has been conducted. Thus, by delaying the delimitation exercise itself, the reservations will not come to pass.
These cases point to the ways in which the Budget has failed to be truly inclusive in its aim for development. The right of the citizens of India to not only have updated information on their position in this country but also the need to update important policy interventions is put on the back burner under the guise of equitable and inclusive economic growth. Evidently, such motivations are reflected in the planning and execution of economic affairs in the country, further widening the existing gap in available opportunities and resources. Attractive focal points for development may be named, but in praxis, they are neglected. The historical condition of underdevelopment that plagues India is not one to be fixed overnight, but it seems that gradual effort has not yet begun. Yet again, the general public faces the consequences of the government’s attempt to appease its allies and stay in power. The scenario will not change in the next Financial Year; after all, ten years in power have not been sufficient.
Keywords
Union Budget, BJP electoral performance, Andhra Pradesh financial support, Bihar development allocation, minority welfare, census delay, delimitation exercise, political bias
References
Bhattacharya, Ravik. (2024, July 23). ‘Biased towards coalition states Bihar and Andhra’: West Bengal CM Mamata Banerjee slams Union Budget. The Indian Express. https://indianexpress.com/article/cities/kolkata/biased-towards-coalition-states-bihar-and-andhra-west-bengal-cm-mamata-banerjee-slams-union-budget-9470758/lite/.
Business Today Desk. (2024, July 24). Can’t name every state in every Budget: FM Nirmala Sitharaman on criticism of favouring Bihar, Andhra. Business Today. https://www.businesstoday.in/india/story/cant-name-every-state-in-every-budget-fm-nirmala-sitharaman-on-criticism-of-favouring-bihar-andhra-438569-2024-07-24.
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Kumar, Dhirendra. (2024, July 23). The good allies: Bihar gets ₹47,400 cr for infra; AP ₹15,000 cr for capital. Mint. https://www.livemint.com/budget/news/nda-bihar-infrastructure-push-andhra-pradesh-new-capital-11721740777056.html.
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PTI. (2024, July 23). WCD sees marginal rise of 2.5% in Budget 2024 allocation. The Economic Times. https://economictimes.indiatimes.com/news/india/wcd-sees-marginal-rise-of-2-5-in-budget-2024-allocation/articleshow/111956553.cms?from=mdr.
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PTI. (2023, December 2). Centre owes Jharkhand Rs 1.36 lakh crore over mined coal: Soren. https://energy.economictimes.indiatimes.com/news/coal/centre-owes-jharkhand-rs-1-36-lakh-crore-over-mined-coal-soren/105669367.
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Usmani, Aban. (2024, July 23). Most minority schemes see cuts, but PMJVK hike helps bloat up minority budget by 2.7%. Newslaundry. https://www.newslaundry.com/2024/07/23/most-minority-schemes-see-cuts-but-pmjvk-hike-helps-bloat-up-minority-budget-by-27.
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