The last few months have seen a change within the minds of the Indian voters. The Modi government has had to pay grievously for angering the largest community in India. The farmer community. The rural India has been steadfastly denouncing Narendra Modi and the BJP. The general climate and the election results from the past few months clearly point to that. The doubt has been cast in the minds of the BJP bigwigs. They seems to have in fact, ditched the development plank and has once again taken up the RamJanmaBhoomi issue for the coming lok sabha elections. What better issue than religion to rally up some votes?
The BJP, although not showing outwardly, is in a panic mode. With Rahul Gandhi successfully shedding his “Pappu” image and the Congress troll machine seemingly beating the BJP trolls in their own game, the BJP has to up their game. And for that the BJP needs money. But no worries there. The BJP is the richest political party in the world. But it seems they have no plans to touch their treasure trough.
The BJP think tank has a better plan. As long as they have power, why don’t they make the country pay for their fight to stay in power? It is nothing new that a party facing elections in the near future announces plans and schemes to attract voters. The Congress and the Left parties have adopted similar strategies to hold on to power. But the BJP plans to take it to a whole new level. And it is going to cost the exchequer trillions of rupees and will make a few permanent leakages in the money reserves of the country.
How are they going to do this?
Step One: Take over the reserve bank. Trying to take control of the Reserve bank is not a new trail by the BJP. When they came to power, they installed in the top position of the bank, someone who they thought would do their bidding. That was not so. Quite recently there were changes in the office bearers of the reserve bank and that was due to pressure from the government. The tussle for the control of the Reserve Bank between the bank and the government came to the open when interviews with bank officials in the wake of the resignation of the governor of the reserve bank clearly showed there was trouble. History has proven, time and again that any government that has taken control of their reserve bank has effectively caused great and often times irreparable damage to the country’s economic health.
Step Two : The announcement of relief schemes and plans:
There will be interest free loans for farmers to be compensated to the banks by the government. This will cost the government more than a hundred and twenty billion rupees per year. The tax exemptions planned for small businesses will make a revenue loss of 250 billion rupees a year. Apart from schemes going to cost upwards of 400 billion, there will be other handouts like direct transfer of money to farmers, changes in personal income tax ceilings etc. All these will mostly be announced during an early budget likely to be towards the end of January or the beginning of February.
With the elections likely to be announced in the first week of March, the government has to announce any vote wrenching tactics before that. Now what is wrong with announcing such plans?
Well for one, the budget deficit will take a nose-dive. The finance ministry’s plans to keep the deficit to under 3.5 percent will be thrown to the winds. This will hurt the rupee. The free fall of the rupee against the dollar will be worse than the one experienced last year. Petroleum and other import costs will increase and export incomes will decrease. Those are just analyses in layman’s language. The actual impact is much much more more.
All these spending and handouts will be the headache of the new government that will take over in May. If the Modi regime is ousted, who ever replaces him will find it almost impossible to roll back the announced policies. If the Modi govt is voted back to power, they alone know how they will manage the situation.