TOI Budget 2018 special: Election season may mean return of subsidy bounty

NEW DELHI: A subsidy is a form of financial aid or support extended generally with the aim of promoting economic and social policy. Staying true to the definition, different regimes and finance ministers over the years, have announced generous amounts of

subsidies

in their budget speeches ahead of general elections.

The high point of this feature came in the 2012-13 budget presented by the then finance minister Pranab Mukherjee when subsidies accounted for 18.23 per cent of the total expenditure. This was a couple of years ahead of the 2014 general elections and the UPA-II government was mired in a number of scams and the resultant anti-corruption movement in the country. This indeed was the culmination of a trend of populism that began in the 2008-09 budget when subsidies took up 14.67 per cent of the pie, a sharp 4.88 per cent rise from the previous budget. This budget presented by P Chidambaram, a year ahead of the 2009 general elections marked the waiving of farm loans worth Rs 60,000 crore.

However, the Narendra Modi-government has chartered a different path. The 2016-17 budget saw a decline of 4 per cent in the subsidy outlay, which was further trimmed in the 2017-18 budget. But, with yet another election coming up next year and BJP-ruled assembly poll-bound states like Rajasthan, Madhya Pradesh and Maharashtra witnessing farmer agitations in the last couple of years, Arun Jaitley might just go back to the subsidy path. He may well take a leaf out of the Vajpayee government’s book from the 2002-03 budget, when subsidy allocation saw a 2.3 per cent surge. But Jaitley must remember that it did not save the NDA government’s ship from sinking in the 2004 election.


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