The conclusion of India’s pre-budget consultations on November 28, 2022, has left the Union Ministry of Finance in such a worried state of mind that it lost its temper on the demand and boycott by the joint forum of 10 Central Trade Unions. A Government official of the Ministry of Finance has even been quoted as saying that their demand was a “mischievous, politically motivated, and deliberate attempt to politicise the meeting”. The outpouring has just skipped the heart of the Narendra Modi Government for which Union Budget 2023-24 would be the last full budget before the general election of 2024, and the State elections of 2023 that are generally taken as semi-final contests. Needless to say that Finance minister Nirmala Sitharaman needs to make this budget politically fruitful for the Modi Government while trying to accommodate the suggestions given with poignancy and hope during the pre-budget consultations but difficult for her to implement.
The pre-budget consultations were conducted over 8 days between November 21 and 28, but in the virtual mode in spite of the Covid-19 restrictions have been eased. All together 8 virtual meets were organised in which 110 representatives of 7 stakeholder groups participated. The stakeholder groups were pre-decided by the Ministry of Finance and the association and organisations were invited but allowing them only that much time to express their concerns and give suggestions, which the Government thought appropriate. Meeting in virtual mode, and effectively allotting only 3 minutes time each to the workers’ representatives had enraged the 10 Central Trade Unions and they ultimately boycotted the meet. In response to the CTUs boycott and demands which included even open discussion rather than virtual meet giving insufficient time, the quoted official of the Ministry of Finance has even tried to shield the Modi Government by saying, “Open consultations have been encouraged at the highest levels of the Government.”
Nirmala Sitharaman also heard the ministers of Finance of States. They asked for more funds, a greater say in Centrally sponsored schemes, and an increase in payments for royalties on minerals. All these demands are old and the Opposition-ruled States have been all alleging that the Centre has been crippling their fiscal autonomy, by not giving their appropriate shares in taxes and royalty in minerals, and they are even ending up spending more than the center’s contribution in Centrally sponsored schemes. The financial constraints of the Centre, and the likely decline in GDP due to various domestic and international factors, may put the Centre in great difficulty while making plans for State finances. Central Trade Unions, except the RSS-BJP, supported Bharatiya Mazdoor Sangh (BMS), who have boycotted the pre-budget consultation and have demanded the withdrawal of four controversial labor codes, stopping privatisation of public sector undertakings, restoration of the Old Pension Scheme, and job creation among others. FM Nirmala Sitharaman has thus many suggestions that her Government has not been willing to do in the past. However, she would have to do the difficult balancing act in this full pre-election budget between the populist one and the hard decisions. She has got a fair idea through seven groups of stakeholders as to what India wants, and we will know how many she accommodated and how many fell on deaf ears only when she would be presenting the Union Budget 2023-24 on February 1, 2023.