Has Sitharaman broken the Jaswant Singh jinx?

CVoter conducted a nationwide post-budget survey and asked questions related to quality of life; standards of living; performance of the economic team of prime minister Narendra Modi; the decision to raise income tax exemption limits and perceptions about the declared goal of this regime to wage a war against black money.

Back in 2003, the National Democratic Alliance (NDA) government under Atal Bihari Vajpayee appeared invincible even as the Congress (there was no United Progressive Alliance, or UPA, then) appeared to be in terminal decline. Prime minister Atal Bihari Vajpayee had finally overridden the ‘Sangh Parivar’ veto and made his original choice, Jaswant Singh, the finance minister. A suave and sophisticated Singh read out the 2003 ‘pre-election’ speech in his baritone and exuded optimism about the future of the Indian economy (just as Nirmala Sitharaman did on 1 February).

When Lok Sabha elections for 2004 were called, pundits and pollsters (including yours truly) confidently predicted a repeat mandate for Vajpayee. The Indian voter, however, delivered a shock verdict, giving seven more seats to the Congress than the Bharatiya Janata Party (BJP). That enabled Congress president Sonia Gandhi to cobble together the UPA regime.

By all yardsticks, the 2003 budget was a good one: focused on economic growth, infrastructure, second generation reforms and targeted schemes for the poor. But the term ‘Jaswant Singh jinx’ became common in many debates back then because of the stunning manner in which Sonia Gandhi strategized a comeback for the ‘down in the dumps’ Congress.

Congress supporters and sympathizers are now wondering: Can Congress leader Rahul Gandhi repeat in 2024 what his mother did in 2004? BJP supporters and sympathizers are wondering: Has Sitharaman done enough in this budget to break the Jaswant Singh jinx and pave the way for yet another mandate for Modi?

The hope in economics

Strange as it may sound, the best hope for Rahul Gandhi lies in economics. Strange because it is universally acknowledged now that the Indian economy is, and will remain, the fastest growing major economy in the world in the foreseeable future. Those studying economic trends know that the confidence levels being exuded now resemble the situation in 2003. The difference: while the global economy was reaching the peak of expansion and growth in 2003, it faces a near recession in 2023. Yet, the Indian economy remains a shining star.

Then, what offers hope to Rahul Gandhi? The GDP growth numbers do appear impressive, but the other numbers should be a cause of concern for the NDA strategists. As mentioned in a story published by Mint on 1 February, CVoter has been conducting a series of nationwide surveys on economic issues and perceptions. If one looks dispassionately at the responses, it would be clear that the current regime and its political strategists should be worried about the 2024 Lok Sabha elections.

In one of the the CVoter surveys, in January 2023, close to 54% of the respondents identified unemployment as a very serious issue, while close to 19% identified it as a serious issue. Taken together, nearly three in every four Indians thought unemployment is a serious cause for concern. During the same survey, close to 44% of the respondents said that poor government policies are responsible for this situation. Similarly, another question asked during the survey was: what do you think is the single biggest failure of the Modi government? While about 25% of the respondents pointed out inflation, 17% identified unemployment as the single biggest failure. Another 7% singled out economic growth as the single biggest failure. Close to 38% of the respondents also stated that poor government policies were responsible for high inflation. For any regime, these numbers would be disconcerting. There is more. More than 60% of Indians felt that their economic status has either deteriorated or remained the same since 2014 when Modi became prime minister.

But Indians do appear conservatively enthusiastic about their current or near future economic prospects. Another question in the CVoter survey was: How do you compare your daily expenses with that of last year? Close to 60% of the respondents stated that they find it very difficult to manage expenses. That’s an improvement over the January 2022 number (67%), but not by much. When asked about family incomes, more than 38% said that their incomes had gone down while expenses had gone up. Another 30% were of the opinion that income had remained the same while expenditure had gone up. Only 18% said both income and expenditure had gone up, while a mere 3% said income had gone up while expenditure had gone down.

This explains why aspirational Indians have not been opening their purse strings or digital wallets despite the impressive GDP growth numbers, while high income Indians seem to be on a spending spree. Take the automobile industry, for instance. While passenger car sales soared in 2022, the story of two wheelers—the main ‘luxury’ purchase for an aspirational Indian—has been a dismal one.

The contrast offers insights into the minds of a majority of consumers who will be voters in the 2024 Lok Sabha elections. They also offer a window of opportunity to Rahul Gandhi to repeat 2004 in 2024.

The welfare agenda

But 2024 could be different if you look at another set of numbers. Normally, a regime would get a decisive thumbs down if economic woes and distress persist. And yet, call it good luck, or better political and perception management, the Modi regime actually gets a thumbs up from Indians when it comes to managing the economy.

More than two thirds of respondents in the survey by CVoter expressed satisfaction with the overall performance of the NDA regime in January. Prime minister Modi gets a positive rating from close to 72% of the respondents. Nirmala Sitharaman has been rated the best of the four finance ministers since 2004, with Arun Jaitley coming second. When asked further about the NDA regime’s handling of the Indian economy, close to 54% rated it as outstanding or good while 27% rated it as poor or very poor. Similarly, while more than 50% are of the opinion that Modi has better handled the economy, 36.2% opted for former prime minister and Congress leader Manmohan Singh.

There is a reason why economic distress has not translated into anger at the regime. The reasons were very clearly spelt out by Sitharaman in her budget speech on 1 February: “The efficient implementation of many schemes, with universalization of targeted benefits, has resulted in inclusive development. Some of the schemes are: 11.7 crore household toilets under Swachh Bharat Mission; 9.6 crore LPG connections under Ujjawala; 220 crore covid vaccinations of 102 crore persons; 47.8 crore Jan Dhan bank accounts; insurance for 44.6 crore persons under the PM Suraksha Bima and PM Jeevan Jyoti schemes and cash transfer of ₹2.2 lakh crore to more than 11.4 crore farmers under the PM Kisan Samman Nidhi”.

She also reminded how the Modi regime had provided free food to 800 million Indians for 28 months. Of course, a fresh slew of schemes to benefit artisans and tribals in this budget have already been widely covered in the media.

Add up the number of beneficiaries, and the number of voters targeted by such welfare schemes is staggering. No wonder, Indians have largely responded positively to the latest budget.

Tale of two numbers

CVoter conducted a quick pan-India survey soon after the budget was tabled. When asked which section of society the budget favoured, the biggest thumbs up was for ‘women’, with almost 57% respondents saying “to a large extent”. The second rank was for ‘big business’ with 44% saying this budget favours the capitalists. Almost 38% felt it was favourable for the ‘poor’ whereas 37% stated it largely favoured the ‘farmers’.

Then, respondents were asked about their expectations about overall quality of life in the next one year. Almost 40% of the respondents said that it will improve, while 21% expected it to deteriorate. The important thing to note here is that right after the 2022 budget speech, 44% of the respondents expected their overall quality of life to deteriorate in the next one year. Overall, while about 43% were satisfied with the budget, a higher 44% were not satisfied.

Soon after the budget speech, 45% of the respondents reckoned that expenses will be difficult to manage in the next one year. But that is a big drop from about 56% soon after the 2022 budget speech, indicating some action being taken to handle the impact of inflation.

Close to one third of the respondents said that the performance of the economic team of Modi was better than expected. In 2022, just about 21% held a similar view.

During a pre-budget survey, not many respondents had any hopes of Sitharaman raising exemption limits on income tax. She has delivered a pleasant surprise to middle class India and 60% of respondents are happy with her move, while 10% said they want more. On a scale of 0 to 10, respondents have given Sitharaman a score of 5.7. That is 10 basis points less than the score of 5.8 for 2022 but significantly better than the scores for the two previous ‘pre-election’ budgets of 2018 (4.7) and 2013 (4.4), presented by Arun Jaitley and former finance minister P. Chidambaram, respectively.

The highest score of 6.5 has been given by respondents with a family income of ₹1 lakh a month or more. Respondents with family incomes of ₹6,000 to ₹10,000 per month (6.2) and ₹10,000 to ₹20,000 per month (6), have also given good scores to the budget. No socio-economic, age or ethnic category has given a score of less than 5, which would have spelt political danger for the regime.

Coming back to the headline: Has Sitharaman broken the Jaswant Singh jinx? The first set of numbers would suggest that she would find it difficult and might end up offering a window of opportunity to Rahul Gandhi. But the second set of numbers suggest that the Modi regime might stave off a shock similar to 2004. India and Indian voters of 2024 seem to be different from the lot of 2004. They voted for stability in 2009 and in 2019, with back-to-back mandates for the UPA and the NDA, respectively. Besides, the BJP of 2024 is not the BJP of 2004 and same applies for the Congress as well. Last but not the least, every time the political stock of brand Modi has been shorted, it has only ended up going north.