Sources say that the prime minister was pretty upset with the fact that the Opposition, led by the Congress, was trying to portray the government’s image as anti-farmer and anti-villages. They also say that before his Russia-Afghanistan trip, the prime minister had called for his able finance minister and had a long discussion with him, and the manifesto of Jaitley’s third Union Budget was decided upon. It was decided in the meeting that the next Budget by the Modi government might prove to be a tough one for urban India, and might hurt it even more. That is because tax recovery during the entire financial year had been slow, there is no hope of immediate foreign investment, and neither has the disinvestment agenda moved forward. At the same time, the pressure of debt on the government continues to mount. Just to carry out the Seventh Pay Commission’s recommendations, the government needs Rs one lakh crore.
Modi government has spent money like water on sectors such as railways and infrastructure, but has not cared to find out how rural India is faring. The coming near future will see West Bengal, Punjab and Uttar Pradesh hold Assembly elections, where six out of 10 voters stay in villages. Bihar has already taught Modi what happens when you ignore the villages. Thus, in the new Budget, a lot of money will be assigned for projects related to agriculture, farmers, and villages. Projects on farm insurance will be reconsidered, and urban India might face the brunt of taxation and rising cost of living. There is also talk about increasing service tax to 16.5 per cent. That means, to shirk off his pro-urban image, Modi government is going to put urban India through a fresh batch of problems.