Union Budget: Not-so poll-driven, but signals focus on global headwinds

In a year when four States and one Union Territory—Tamil Nadu, Kerala, Assam, West Bengal and Puducherry—are headed for Assembly elections, expectations around the Union Budget, at least in political circles, were that these States would receive some goodies.

While the Budget did include announcements touching these States, the measures were packaged within broader multi-State initiatives that reflected the Government’s attempt to balance domestic political expectations with global economic uncertainties. 

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This was, in fact, one of the first questions Union Finance Minister Nirmala Sitharaman was asked during her post-budget press conference—whether she had deliberately avoided poll-bound States after previous budgets that announced sops were criticised. “There is enough to cover all the election-bound States. Much has been announced for election and non-election States,” she said.

For West Bengal, the announcements include a proposed high-speed rail corridor between Siliguri and Varanasi, a Dankuni (East)-Surat (West) dedicated freight corridor, and an East-West Industrial Corridor. Tamil Nadu and Kerala feature in a Rare Earth Corridor along with Odisha and Andhra Pradesh, alongside incentives for farmers growing cashew, coconuts and Cocoa. The “Turtle Trails” project includes coastal areas of Odisha, Karnataka and Kerala. Assam is set to be a part of a Buddhist tourism circuit encompassing northeastern States like Tripura, Arunachal Pradesh, Sikkim, Manipur and Mizoram, apart from the announcement of a second NIMHANS for Assam.

By wrapping these measures in a multi-State spread, the government appeared to send the message that while concerns over domestic politics remain important, the global headwinds and the trade issues hanging fire were looming over it all.

The setting up of a National Institute of Hospitality for training in the service sector, encouraging women in STEM by setting up girls’ hostels in STEM institutions across districts, and several measures in the tax proposals to boost the manufacturing sector were the bigger announcements. A ₹40,000-crore push for Semiconductor Mission 2.0, and an electronics manufacturing boost were also announced.

All these measures, government sources said, are aimed at insulating India from global trade disruptions, strengthening supply chains, and preparing Indians for different skill set demands from countries with which India has concluded or is finalising Free Trade Agreements.

Many of these measures, however, are not immediately saleable in electoral terms and will require careful support from the government to bear fruit. The broader aim, government managers argue, is to craft a new narrative—of constructing a rail track in anticipation of a train running on it not today, but several years later—a horizon that may be far, but could affect the legacy of the Modi years (the period of governance under Prime Minister Narendra Modi).