Indian budget helps farmers, middle class

India’s government unveiled yesterday a raft of budget sweeteners for farmers, the middle class and also cows, as Prime Minister Narendra Modi seeks to shore up support with elections looming. The announcement of a new national cow board for bovine welfare was meanwhile a nod to India’s majority Hindus who believe the animals are sacred.

“This government will never shy away from honouring our mother cow,” a hoarse Piyush Goyal, interim finance minister, told a raucous parliament as he unveiled the interim budget. The budget was the last before the country of 1.25 billion people, Asia’s third-largest economy and the world’s biggest democracy, goes to the polls in elections due by May. Goyal said that 120 million “small and marginal” farmers will receive direct annual handouts of around 6,000 rupees ($85), costing the government the equivalent of around $10.5 billion.

The dole out appeared to be in response to a proposal announced by the main opposition Congress party on Monday, promising a minimum income guarantee to the poor. Other new budget measures include a full tax rebate for those earning up to $7,000, providing a tax benefit of some $2.6 billion to an estimated 30 million people in the middle class. The government would also launch a pension scheme for people working in the country’s vast unorganised sectors, where employment terms are not fixed.

“We are moving towards realising a new India by 2022,” Goyal said. “We are poised to become a $5-trillion economy in the next five years and we aspire to become a $10-trillion economy in the next eight years.” But Rahul Gandhi, head of the Congress party, tweeted: “Five years of your incompetence and arrogance has destroyed the lives of our farmers. “Giving them (17 rupees) a day is an insult to everything they stand and work for.”