The Election Commission has expectedly kicked the “postpone the budget” ball -- rolled out by the opposition -- to the government for comments by January 10. This is smart, because it offers the government an exit strategy from the ill-conceived plan to fast forward the budget to February 1, just two days before the elections in five States.
The government could demurely say to the EC that it is willing to defer to any decision the EC takes. The priority is that the Code of Conduct – which kicks in, once the election schedule has been notified -- should be safeguarded. This would free the EC to direct that the budget session be held after March 8 when polling ends in all States.
Alternatively, the government could stick to its stated stand that a national budget process is not barred by State level assembly elections being in progress. This stance would require the EC to shoulder the gun itself. Discretion being the better part of valor, the EC may decide to go strictly by the legalese.
The second option of playing obdurate is bad for the government and bad for the EC. For the EC, going by the letter rather than the spirit of the law would be viewed as caving-in to the government. This would erode its institutional credibility, so assiduously built by successive commissions, since the times of Mr. T.N. Seshan Chief Election Commissioner in the early 1990s.
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From the government’s perspective, a budget session under the present circumstances would be an embarrassment. The opposition would surely disrupt the session with protests and walk outs. Getting a budget passed with the opposition absent under protest, is technically possible and is an oft adopted stratagem at the state level. But it bodes ill for post budget collaboration around the still hanging Goods and Services Tax as was illustrated recently by the West Bengal Finance Minister walking out of the pre-budget discussions.
More importantly, a budget session based on fiscal data prior to November 2016 seems meaningless. Demonetisation was the biggest, internal economic shock in recent economic history. Even the Governor, Reserve Bank of India has reportedly gone on record before parliamentary committees that the after-shocks of demonetisation could linger on for some time more and are difficult to assess today. Budgeting becomes a valueless sham under conditions of near-term, severe macro-economic uncertainty.
Far better instead to opt for a Vote on Account. This stratagem would allow tax collection and expenditure to carry on unhindered on the same basis, as in the current fiscal year during the first quarter of the next fiscal year – 2017-18. A full budget could then be presented, debated and passed during this period.
There are several virtues in acceding to the demand of the opposition parties to postpone the budget.
All party consensus on the fundamentals of democracy is the bed rock of productive inter-party collaboration. Ensuring free and fair elections is one such principle. One aspect of inter party equity is the imposition of reasonable restraints on the party in power to avoid the possibility that it may woo voters from its vantage point of access to state resources and institutionalized forums for policy making. Part VII of the EC’s Code of Conduct details do and don’ts. Admittedly, the restraint is primarily on the party in power in the concerned state and not on the national government. But India is a Union of States and not a federation, unlike the US. The central government here has a dominant fiscal and functional profile. State governments survive under the shadow of the central government.
The simple fact that the budget is proposed to be presented on Feb 1 just two days before polling on Feb 4 in Punjab and Goa must give us pause. The central government must act like Caesar’s wife and be above reproach. This is not to say that the central government is sure to misuse the budget for partisan ends. But why let doubts fester and poison the political environment?
The world and India, are poised on the edge of a calamitous economic precipice. Falling off the cliff is a distinct possibility. Every economy is hunkering down for an economic slowdown and India cannot go unscathed. This requires all political parties to pull together rather than work at cross purposes. Prime Minister Modi said as much at the Patna, Guru Gobind celebrations last week, in the context of wide support being a prerequisite for fundamental reform.
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Co-operative federalism began well in 2014 but the flower has withered remarkably quickly since then. Despite the economic setback from demonetization the BJP holds all the cards going forward over the next two years.
Why not take a leaf from the dignified way the new Chief Justice of India J.S. Khehar behaved? He was confronted, in court last month, by the allegation that he should recuse himself from hearing the case regarding alleged corrupt practices by PM Modi as Chief Minister of Gujarat, because his appointment as Chief Justice was awaiting the approval of the Prime Minister. The allegation was unseemly. Being the most senior judge in the Supreme Court, Justice Khehar’s elevation as CJI was a routine matter. Not elevating him would have raised eyebrows rather than doing so. Despite being visibly upset Justice Khehar simply said he was pained by the lack of confidence in him by the senior lawyer but was willing to recuse himself. One can never going wrong by following the code of Caesar’s wife.
Maybe the government should take a leaf from the CJI's book. Why stir up a political storm when nothing much is at stake around presenting the budget under an advanced time frame on February 1? Alternatively, why not learn from the babus? They bow low to rise high. Either way, the priority is to soothe troubled spirits, not to create new storms in tea cups.
This commentary was first published in The Times of India.
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