In the wake of the Union Budget 2024-25, concerns are mounting regarding the sustainability of India's fiscal policies. Tavleen Singh, in her recent opinion piece, warns against the reckless spending by political leaders on populist welfare schemes, fearing a return to India's past economic struggles characterized by dependency and poverty [abb1ccb5]. She recalls the socialist era when citizens were often treated as supplicants by officials, highlighting the potential dangers of the current trend of competitive populism where political parties promise increasing benefits to voters [abb1ccb5].
Singh praises Prime Minister Narendra Modi's Jan Dhan scheme for its role in empowering citizens but criticizes the allocation of Rs 87,000 crore for welfare schemes in the upcoming Maharashtra elections, including Rs 46,000 crore earmarked for the Ladki Bahin Yojana, which aims to provide Rs 1,500 monthly to 2.5 crore women [abb1ccb5]. This scheme is part of a broader strategy as political parties across India are increasingly targeting women voters with cash handouts amid economic woes, with approximately 670 million women being the focus of these initiatives [a45004b2].
As inflation reached a 14-month peak at 8.9% and unemployment remains a pressing issue, over a third of India's 36 states have implemented handout programs costing around 2 trillion rupees (US$23.70 billion), or 0.6% of GDP [a45004b2]. For instance, Jharkhand has doubled its monthly payout to 2,500 rupees for 5 million women, while Maharashtra's BJP alliance has been providing 1,500 rupees since August [a45004b2].
Amid these discussions, Finance Minister Nirmala Sitharaman recently acknowledged a request from a citizen, Tushar Sharma, for middle-class relief on November 17, 2024. She emphasized the importance of public feedback in shaping government policy, reflecting ongoing concerns about the financial burdens faced by the middle class due to rising inflation [05d39de3]. Sitharaman assured that the government is attentive to citizens' voices, indicating a potential shift towards addressing middle-class financial struggles more directly [05d39de3].
As the Union Budget is presented, the government is under pressure to provide relief and push growth while balancing the demands of coalition partners and addressing critics who claim that the budget favors big business over social needs [f49dee31]. The budget's focus on employment, skilling, and the rural economy has been met with mixed reactions, with some praising its growth-oriented approach while others express concern over its implications for fiscal responsibility [6f5d6326].
The upcoming budget discussions will be crucial in shaping India's economic landscape, especially as the government aims to lower the fiscal deficit to raise credit ratings while managing the expectations of various stakeholders [4eebab35]. Critics of the budget argue that it does not adequately address the pressing issues of inflation and unemployment, with some calling it a 'Kursi Bachao' (save your chair) budget [a14607cb].
Overall, the interplay between populism, fiscal responsibility, and economic growth will be a critical theme as India navigates its future in the wake of the Union Budget 2024-25 and the upcoming elections in Maharashtra and Jharkhand, with results expected on November 23 [a45004b2][abb1ccb5].