The budget signals a shift in BJP's focus — from protecting its voter base to wooing Congress voters

By: Rama Bijapurkar

Perhaps we are being cynical in reading the budget as a pre-poll marketing strategy statement of where to compete to win in 2019; ie which voter segments to go after with what intensity. Assuming that it is just that, it seems to be saying that the BJP plans to focus on its competitor’s core base of garib and kisan. Since most of the former and all of the latter live in rural India, and that is where the Gujarat elections rang alarm bells, the focus on both in this budget makes sense.

What is surprising, though, is that it is a departure from the BJP’s strategy so far: of focusing on protecting their own core or on whoever is winnable and letting the rest go. For example, the BJP did not field any Muslim candidate in Uttar Pradesh; and it played to win in Jammu and Kashmir by focusing on one half of the state and making a fairly clean sweep of it, even as it left Kashmir to the PDP. This time, based on budget signals, the focus seems to be on making inroads into the competitor’s core voter base to the exclusion of its own traditional voter base.

Perhaps they continue to be very confident of their own traditional voter base of urban middle class non-Muslims. Or, maybe it is the reverse: the BJP is not so confident of the traditional base and feel the need to widen their “where to compete” arena. 100 Million Households The general view is that this budget has given the middle class voter the short shrift. Let’s first define who they are and how many are they relative to the rest since elections are always about electoral arithmetic.

The so-called urban middle class comprises the affluent who we like to incorrectly label as middle class as well as those genuinely in the middle of the income spectrum of Urban India. So let’s call them collectively the top half of Urban India, and they number about 55 to 60 million households. On a comparable income basis, rural India has another 50 million such households, making the total middle class voter base of the country 100 to 110 million households
or about 35-40% of India’s 281 million households.

Has this 40%, the so-called middle class, been given a short shrift in this budget? They are not part of MNREGA or the new Ujjwala scheme recruits, or the Ayushman Bharat scheme, now christened by the media as Modicare. However, there are segments of them that have reason to feel good. Farm owners, who are a large part of the rural component of the middle class, have much to gain if the promises made to the farm sector materialise.
Another segment, though much smaller, is the formally employed women, who have got a PF subsidy in effect, on top of the big bonanza last year of extended maternity leave. Senior citizens, another small segment, have gained too. The rest of the salaried class, who in any case are a minority even in this strata, have won some, lost some on the income tax deductions front and come off neither better nor worse, but everyone in this group now has been taxed a bit more. However, the reduction in income tax and the promise of better credit flow to small businesses with a turnover below `250 crore is a signal of goodwill to the mainstream “mass market” of the business community, part of this group of middle class and affluent Indians.
A large chunk of this 100 million households have been affected by long-term capital gains tax and dividend distribution tax. It can be argued that 60 million folios are far fewer househ oldsifyou de-duplicate them, and even fewer if you take the equity mutual fund investor base. However, equity mutual funds are on a roll, with 60,000 new investors entering every day, 60% of whom are heading towards equity.

It is the gold rush brought about by a runaway stock market. While the new taxes have not been kind to investors, their unhappiness in this environment is likely to be mere grumbling that will soon settle down, as new business opportunities in healthcare, infra and education kick in. But what about the aam janta of this middle class, who are not farmers or formally employed women, or MSME owners, or senior citizens? There are no pluses to make them smile. While 40-50% of their expenditure is on food, their big spending items and the bellwether items of their happiness are fuel, rent, healthcare, education, conveyance, communication, entertainment and durables (including scooters and cars).
Fuel prices are the new onion prices — so hopefully 2019 will not make everyone extremely upset on this count. Today if you are the average middle class, transport — whether it is on bike or taxis, or by public transport — results in a big cash outgo, one that is visible and pinches every day. Durable prices are going up with GST and “with bill” purchases and the death of cheaper local brands unable to go formal.

However, there is a fundamental story here that should warm the hearts of this segment —better quality higher education for children, smart cities and infrastructure that will make the logistics of living less traumatic; more formality in jobs leading to better working conditions, better legal environment to not get gypped by builders; easier e-governance and other services since time is the new money. If this is spun right and compellingly, this group will be willing to be good soldiers and give up greater comfort today for a better tomorrow for themselves and their children. So, finally, is the “where to compete in order to win” directionally right? Yes, because the bottom half has much to gain and feel good about and the top half has not been uniformly ignored. And guess what? They were never the Congress party’s core voter base in any case.

(The writer is the author of A Never-Before World)