Modi neglected his devoted salaried middle class. No reward for a decade of loyal support

Throughout the election campaign, Rahul Gandhi portrayed Modi as a patron of the oligarchs. The Prime Minister did not work too hard to dispel this unflattering caricature.

Illustration by Soham Sen | ThePrint Team

There are only two things you can take for granted in the world we live in. The first is that the sun will rise in the East and set in the West. The second is that each year, when the Union budget is presented in Parliament, businessmen will rush to declare it “fantastic” in joyous ecstasy, like super-fans at a Taylor Swift concert. “The Finance Minister is a genius,” they will gush. Others might add: “Of course, we should not forget the role of the Prime Minister whose vision guides India.”

This fanboy (and now, increasingly, fangirl) nonsense tells us nothing. If Finance Minister Nirmala Sitharaman were to announce the end of the world, the captains of industry would still give her a standing ovation and praise her brilliance.

The truth is that most honest reactions to Budget 2024 have not been fan-like. There have been valid criticisms of the government’s chosen route to take the Indian economy forward. While some of the budget proposals are being praised, three negative points have stood out.

Neglecting fanbase

The first is the growing dissatisfaction and anger among the urban middle class. Although not particularly significant in terms of total electoral numbers, this class is notable for paying income tax. It was the urban middle class that first bought into the cult of Narendra Modi and, more recently, accepted the BJP’s portrayal of the Congress as a dangerous left-wing party. (Recall the BJP’s claims about the confiscation of buffaloes and the snatching of mangalsutras.) These are the same people who nodded along when the BJP painted Rahul Gandhi as a dullard who could not be trusted to lead the country.

Long before Sitharaman presented the budget for 2024-25, there were signs that the middle class was re-assessing its assumptions and priorities. Much of the disgruntlement was over excessive taxation, but there was a deeper resentment behind the complaints. Salaried Indians felt that while rich businessmen (not just the oligarchs) had become richer in the Modi years, hardworking people like them didn’t receive the rewards they deserved. Prime Minister Modi dined and celebrated with his rich friends while knowing their support wasn’t permanent and could easily shift to any party that seemed more likely to advance their prospects. (In his famous election campaign speech, he talked about how the super-rich, including his own pals, were sending tempos full of money to the Congress.) And yet, he gave these fair-weather friends a disproportionate amount of attention while neglecting his devoted salaried supporters.

The salaried middle class was expecting something special from Budget 2024, perhaps as a reward for a decade of loyal support. It was Modi’s third consecutive victory, after all; “historic,” as he described it. In real terms though, it got damn all. There was a marginal tweak in income tax rates but not enough to make much difference to many middle-class taxpayers.

Worse still, the government targeted the few means left to the middle class to save some money. The revision of the long-term capital gains tax rates is widely unpopular. The removal of the indexation principle while calculating capital gains tax meant that houses (where middle-class people had invested a substantial chunk of their savings) now fetched less of a real return after taxes if they were to be sold.

As is always the case these days with Modi and his government’s decisions, the same big question remained—why?

Why was the PM not sensitive to the views of a significant part of his support base? Why did his advisors allow a budget, which essentially told the salaried middle class it did not matter, to be sent to Parliament? Did nobody think this through? Were there no discussions about the message this budget would send out?

Losing support

Throughout the election campaign, Rahul Gandhi portrayed Modi as a patron of the oligarchs, and the enabler of those who made fortunes by exploiting India’s natural resources and the goodwill of the government. The Prime Minister did not work too hard to dispel this unflattering caricature. Instead, his behaviour after the election and the measures undertaken in Budget 2024 have added more weight to that charge.

There is a second point to be noted. In the early days when Modi emerged as a national leader, his strongest supporters were young Indians. However, over the past decade, this initial group of supporters has aged, and the new generation coming up does not necessarily see Modi as a harbinger of hope. 

Faced with unemployment and corruption, and having only known a decade of Modi’s leadership, this younger generation has real concerns and grievances.

The Congress reached out to this segment in the last election. And even the BJP now concedes that its flippant approach to the issue of unemployment (‘Jobs? Why can’t they just make pakoras instead?’) was misconceived. Budget 2024 attempted to address the issue (perhaps by stealing from the Congress manifesto, as Jairam Ramesh and other Congress leaders have alleged) but the measures announced do not seem enough to reassure the youth.

Moreover, the strongest memory for many young people will be about the mess the government has made of the NEET exams. When Rahul Gandhi suggested in Parliament that the government was destroying the future of talented young Indians by corrupting the national medical entrance exam process, Education Minister Dharmendra Pradhan fumbled and couldn’t provide a satisfactory response. Nor could anyone else from the government.

Appeasing allies

Then there is the matter of PM Modi’s image as an all-powerful, benevolent leader. One would have expected the government to hurl goodies at Maharashtra where the BJP will soon fight a crucial Assembly election but the state was mostly ignored in the Union budget. This may well be because the government no longer has the money to afford such benevolence.

After the Lok Sabha election results, it was clear that the BJP government will have to pay through its nose (well, more correctly, our noses, given that it is taxpayers’ money) to keep Andhra Pradesh Chief Minister Chandrababu Naidu and Bihar Chief Minister Nitish Kumar happy enough to support the government.

If you look at the massive budget allocations to Andhra Pradesh, Naidu has got at least some of what he wanted. (There will be more demands, I am sure).

It would be crass and unfair to refer to these allocations as protection money or ransom payments. But when it comes to handing out allocations, the government is clearly far from all-powerful. It stays in office only because it sends money to its allies.

All finance ministers have multiple compulsions when they prepare a budget. They can’t satisfy everyone. In any case, the direction of the budget usually comes from above—the Prime Minister. Most of us understand this. Yet it is hard to escape the feeling that Budget 2024, like many of the decisions taken recently by the current government, lacks the sure, shrewd touch previously displayed by the Modi government. It errs grievously by neglecting the faithful and alienating the PM’s most dedicated supporters.

If Modi wants to regain his old popularity, he can only do so by putting money in people’s pockets and making their lives better. He can’t do it by letting his chief ministers encourage prejudice by forcing Muslim restaurant owners to display their names so that Kanwariyas know not to eat there. Those days are ending.

Hate only gets you so far. Eventually, reality takes over.  

Vir Sanghvi is a print and television journalist, and talk show host. He tweets @virsanghvi. Views are personal.

(Edited by Ratan Priya)