Union Budget 2013: Massage for Nitish, message to Modi?

NEW DELHI: P Chidambaram’s Budget has sent a strong political feeler to Nitish Kumar and taken a dig at Narendra Modi. The FM indicated that the Centre was ready for a sympathetic look at Nitish’s “special-status-for-Bihar” demand. The political overture is significant as the popular CM is increasingly wary of the prospect of Modi being projected as BJP’s PM nominee.
Chidambaram said the three factors — terrain, population density and length of international border — currently used to determine states that qualify to be treated as backward and worthy of special assistance, need to be replaced by more relevant criteria.
The backwardness of a state, he said, should be judged on how far it’s behind the national average on parameters like per capita income, literacy and other human development indicators. These standards could be more suitable for Bihar. “I propose to evolve new criteria and reflect them in future planning and fund devolution,” he said.
The friendship message for Nitish was amplified by a strong commitment to the CM’s pet project — reconstruction of the Nalanda University. Chidambaram said he was earmarking part of the Rs 11,500cr Backward Regions Grant Fund for Bihar. And, importantly, he took a swipe at development models that are non-inclusive and give short shrift to human indicators. The FM took no name but there was little doubt who the jibe was meant for. The Congress has consistently mocked Modi’s development claims as non-inclusive.
The pitch worked, with Nitish welcoming Chidambaram’s readiness to assess Bihar’s “backwardness” claim. The CM called it a “victory in principle”. But while the Budget attracted the attention of a powerful satrap, it did not cover all the vulnerabilities that a Modi-led BJP would wish to exploit. The FM somewhat allayed the perception of a full-scale crisis while meeting the demands of diverse constituents with a “business-as-usual” air. His defiant tone on ‘direct benefits transfer’ struck many, reflecting readiness to leverage public spend to showcase UPA’s “pro-poor” credentials. The focus on women was a recognition that they had arrived as an autonomous constituency.
But Chidambaram was constrained to spread the scarce money thinly. Implementation of the proposed national food security scheme is a case in point. The allocation of Rs 10,000cr is hardly commensurate with the scheme’s billing as a 2014 “game-changer”.
Outlays for other social schemes have also been modest, and fall short of the threshold the FM needed to cross in order to change the headlines about government’s functioning. A Modi will have the headroom to play on the hopes of aspirational India. Rather, dissatisfaction over the super-rich surcharge can have a fallout bigger than what the tiny numbers suggest. The FM was saddled with the task of reconciling UPA’s interests with the expectation of foreign ratings agencies that he rein in fiscal indiscipline. It is not clear that he has fully satisfied either of his two target groups.
Union Budget 2013 > Budget news 2013 > Economic Survey