Woo voters through Budget sops: 2017 assembly polls is advantage Modi

If the mismanagement of the demonetisation exercise had any negative impact on the fortunes of the BJP in the upcoming assembly elections, the announcement of the Election Commission (EC) of the poll dates in five states would have put those concerns to rest. The Bharatiya Janata Party (BJP) is the only party that must be fancying itself to make a big mark in the elections. 

Firstly, with the budget having been advanced to February 1, the government has a wonderful opportunity to woo voters through a slew of poll sops through the budget. All the states going to polls – Punjab, Goa, Uttar Pradesh (UP), Uttarakhand and Manipur- do so after the budget announcement.If the budget was held as per tradition in the last week of February, the government would have missed the opportunity. But this time, the timing of the budget fits the BJP’s strategy better than it has done for most parties in power at the centre in the past.

UP, India’s most populous and electorally crucial state, is the foremost on the BJP’s mind. The seven-phase elections in U.P start on February 11, less than two weeks after the government announces its budget expected to be peppered with innumerable incentives. If PM Modi’s bumper rally on January 2 in Lucknow is anything to by, then the budget will only act as a force multiplier for the BJP in the state. 

Secondly, with the pains of demonetisation easing, the Reserve Bank of India (RBI) has now asked banks to divert 40% of the newly issued currency to rural areas across India. With UP, India’s most populous and electorally crucial state going to polls between February 11 and March 8, the banks have enough time to cater to the needs of UP’s 81 million voters, most of whom reside in the rural hinterland. Uttarakhand, another primarily rural state going to the polls on February 15 could also see a major improvement in the cash situation which would further reinforce the BJP’s acceptability in the Congress ruled Himalayan state. 

 

Thirdly, the government’s demonetisation move has hit some parties who rely on extensive use of cash donations. These include the Samajwadi Party (SP), Bahujan Samajwadi Party (BSP) and Shiromani Akali Dal (SAD). While the BJP doesn’t fancy its chances in Punjab, this could prove to be a big boost for ‘cleaner’ parties like Arvind Kejriwal led Aam Aadmi Party (AAP) in the state. In UP, the internal rift in the Samajwadi Party and the perceived monetary hit taken by Mayawati’s party post demonetisation may also work in favour of the BJP. 
 

Finally, there are enhanced expectations, especially in India’s rural areas, for PM Modi to play Robin Hood. Before coming to power in 2014, he had promised transferring Rs 15 lakh into the bank accounts of every Indian. He has further hinted that the gains from voluntary income disclosure schemes of the government would be transferred to the poor. This has been further reinforced by the setting up of a fund titled Pradhan Mantri Garib Kalyan Kosh to be funded from tax collections from the taxes collected from undisclosed income of wealthy Indians. The rise in zero balance Jan Dhan accounts especially in poll bound states has also raised the spectre of money transfer to the accounts of the poorest of the poor. For instance, in UP, the number of zero balance accounts rose from 8.6 million to 9 million post demonetisation. The number of zero balance accounts in all the states going to the polls is around 20 million. 
 

The sequence of events – right from demonetisation, gradual easing of cash crunch, instructions to issue more cash to rural areas and most importantly the advancing of the budget – all point to one thing. Right now its advantage BJP.