Budgeting for the elections

Budgeting for the elections

The suspense over the timing of the Union Budget for 2017-18 finally ended on Monday with the Election Commission and the Supreme Court scotching calls, in the light of upcoming elections for five State Assemblies, to defer the February 1 date proposed by the Centre. The NDA government has been keen to abandon the tradition of presenting the next financial year’s Budget on the last working day of February, citing the potential benefits for the economy from faster spending of the approved public expenditure. With a February-end Budget, transmission of funds, and thereby meaningful implementation, seldom starts before June, by which time the monsoon sets in. This leaves just about two quarters to spend a whole year’s funding for projects involving physical infrastructure capacity-creation, for instance. This is the argument in favour of advancing the Budget date. The Opposition, for its part, has voiced concern that a Budget presentation this year so close to Assembly polls could influence voters. In 2012, the last time these five States were headed for polls, the UPA government had voluntarily opted to defer the Budget presentation. But as the Supreme Court has pointed out, the Central Budget cannot shake the minds of voters in a State.
Interestingly, the Election Commission’s nod for a February 1 Budget comes with the caveat that it must not announce schemes aimed at poll-bound Uttar Pradesh, Uttarakhand, Manipur, Punjab and Goa, or even expound on any achievements of development programmes in these States. The caution to the government to not use the Budget as a campaign tool is understandable, and the government will have to be more nuanced in addressing the concerns of the entire country in the Budget without making a regional pitch. For long, governments have voiced discomfort with the model code of conduct in India’s perpetually ticking election cycle, arguing that it inhibits decision-making. Indeed, this anxiety to reduce the paralysis imposed by the model code has been one of the main reasons cited for a proposal for simultaneous elections to Parliament and State Assemblies. But simultaneous elections could pose their own complications. The departure from practice effected now is an opportunity for the Centre not just to get on with the business of government, but also to do so in a confidence-building manner that would make a case for relaxing further, or reforming, the parameters of the model code. The government must act in good faith, and table a statement on the improvements recorded in outcomes on account of advancing this annual ritual when the Union Finance Minister rises to present the Budget next week. Too-clever-by-half messaging to use the speech as a campaign tool would only imperil this reform.