Culture drives how States Spend Public money

Associating budgetary allocations with cultural tropes is one way of validating them. Consider the case of two Indian states, joined at the hip till 1960 — Gujarat and Maharashtra.

The origins of the 1960 split

The port city of Surat in Gujarat was the entrepôt for Western India and the link with Arabia and beyond in pre-colonial times. Once England acquired Bombay in a dowry from Portugal in the 16th century, colonial interest grew in the city to export cotton from the hinterland and later textiles made in factories, mostly owned by Marwaris and Gujaratis — traditional Indian financial entrepreneurs.

In the aftermath of Independence, the inequity of Bombay, controlled by Gujarati money with the local people working for them, became a flashpoint. Language differences fanned the demand for separate states. The net result was Mumbai (erstwhile Bombay), the financial capital of India, is still controlled by Gujaratis and Marwaris, but Maharashtrians occupy political office.

The taciturn ruggedness of Marathas (warriors) and the manipulative skills of Peshwas (Brahmin administrators) are reflected, respectively, in the braggadocio of the Shiv Sena and the clever practicality of the BJP and Congress offshoots. These traits appeal to different sets of Maharashtrians — who remain deeply tied to the land and its inclusive culture. In contrast, Gujarat is obsessive about value for money and is outward looking, as evidenced by its large diaspora, albeit more traditional culturally, unlike the “Maximum City” Mumbai — which is a river of cultures. Do the 2023-24 budget speeches reflect these cultural traits?

Value-for money conscious Gujarat: Social protection sans tax increase with great fiscal metrics

There are three dominant cultural traits to the 2023-24 budget as presented by finance minister Kanubhai Mohanlal Desai of Gujarat. The first is the pervasive search for value for money. The budget reminds citizens of the Covid-19 pandemic relief measures — the distribution of foodgrains at subsidised prices, concessions in stamp and electricity duty, reductions in the value added tax on petrol and diesel and tax cuts on PNG for homes and CNG for vehicles from 15 to five per cent — all this with no new taxes imposed. Despite the largesse, the state enjoys a surplus in the revenue account (income less revenue expenditure) and has a low fiscal deficit (income less all expenditure revenue plus capital) — the ultimate test of a value-for-money obsessed administration and citizens to match.

Yes, we know you are out there

The second trait speaks to the dichotomy of Gujarat, where cross-community collaboration coexists with impregnable intra-community norms. The budget speech caters to even the smallest segment of the voting population. There are 329 separate allocations for specific interest groups, which include a mammoth Rs. 87.3 trillion in subsidies for agricultural electricity supply to compensate the distribution company from low administered tariffs, allocations as small as Rs. 10 million each for scholarships to Divyang (especially abled) students; Scheduled Caste students pursuing higher education and preserving Gujarat’s four major wetlands. Rs. 20 million was given for SC students studying medicine or engineering, and Rs. 40 million for digital teaching aids in anganwadis.

A blend of culture, religion, and tourism

Third, the budget speech is devoid of any overt religious subsidies. Wokishly, it clubs temples with tourism. A “Yatradham Corridor” to restore “Dwarkadhish Shri Krishna… the magnanimous lord of Indian culture worshipped by crore of people (sic)” is cheek by jowl with allocations for the GIFT city located International Financial Centre, the Statue of Unity — a tribute to Sardar Patel in bronze-clad concrete, White Desert-Dholavira and the Gir sanctuary.

Maximum Maharashtra- Gujarat’s politically fractious neighbour

Just across the border from Gujarat, is Maharashtra, roughly double its size in population and land area. The dominant culture is of pragmatic tolerance and inclusion — a winning strategy given it is a diverse and the second largest state by population. The political mandate is fractured. The BJP (105 seats) and the two Congress offshoots (98 seats) are head to head. This makes the Shiv Sena — a Hindu nationalist fellow travellor of the BJP, albeit strictly regional and mostly urban (combined share of Eknath Shinde and Uddhav Thackeray groups is 57) — an enabler for getting a majority at 145 seats.

This also explains the reverse alliance. The Shiv Sena’s Eknath Shinde is the chief minister and big brother BJP’s Devendra Fadnavis, a previous CM, is the deputy chief minister — illustrative of Peshwa pragmatism where access to power comes before false pride. Cooperative and collaborative, albeit fractious, politics has deep roots, dating back to the 18th century when powerful regional Maratha satraps co-existed with the Peshwa administration in Pune.

The ”spoon-feed” template replicated

State Assembly elections loom in 2024. Finance minister Devendra Fadnavis’ budget reflects the race for votes. Maharashtra is deeply rooted in social reform and inclusion. It budgets for the renovation of the first girls’ school in Pune — including for marginalized castes and communities — established in 1848 by Savitribai Phule, an educationist, social reformer, and women’s rights advocate. Later-day social reformers associated with the working class, farming community and artisans are similarly venerated through grants. Skilling and employment missions in the name of Sant Shiromani Goroba Kaka — a potter by trade. “Birsa Munda Jodaraste Yojana” to connect all tribal padas (villages) with perennial roads. A new connectivity scheme “Sant Sevalal Maharaj Jodaraste Yojana” for all Banjara tandas (villages) to venerate the 18th century community organiser and rights advocate for this non-tribal, rural, trading community. A Marathi language university to venerate Shri Chakradhar Swami of the flourishing Krishnaite Mahanubhava sect. Rs. 310 million to venerate Santji Jagnade, a disciple of prominent Marathi Sant Tukaram Maharaj.

In a similar vein, it burnishes Maratha pride by allocating generous grants for new theme parks and a museum celebrating the life of Chhatrapathi Shivaji Maharaj, the 17th century Maratha warrior king. Similarly, the “Yashwantrao Holkar Jodaraste” connectivity scheme for Dhangar villages assuages this pastoral community.

Despite the electoral largesse, Maharashtra retains fiscally responsible metrics — not quite as outstanding as Gujarat’s, but nevertheless respectable — a low revenue deficit of 0.4 per cent of GDP, a higher fiscal deficit of 2.45 per cent, but well within the norm of three per cent, though debt servicing is inching upwards.

Finally, it strikes a collaborative note. Participatory budgetary process led to 40,000 recommendations being received from citizens. Maharashtra has an existential need to keep the “confederacy” of conflicting political interests alive.

Former Maharashtra governor Bhagat Singh Koshyari had pointed out, albeit a mite too colorfully, that sending Gujaratis and Marwaris out of Mumbai would bankrupt Maharashtra. Gujarat’s state domestic product grew from being 46 per cent of Maharashtra’s in 1960 to 60 per cent by 2019-20. Making the same mistake twice would be out of character for inclusive and pragmatic Maharashtra.

This opinion piece first appeared in Asian Age April 4, 2023 https://www.asianage.com/opinion/columnists/040423/sanjeev-ahluwalia-how-culture-underpins-the-budgets-of-states-in-india.html

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