NEW DELHI, March 2, 2008 (AFP) – A populist budget unveiled by India’s ruling Congress party forgiving loans for poor farmers and cutting income taxes is unlikely to help its re-election chances in looming polls, analysts say. “People say Uttar Pradesh is just a glimpse of what’s going to unfold at the national level,” declared Mayawati at her lavish 52nd birthday celebrations in January in the state capital Lucknow — and in New Delhi.
Finance Minister Palaniappan Chidambaram announced last week a hefty 15- billion-dollar loan bailout for 40 million poverty-hit farmers and reached out to the middle classes with a big income tax exemption rise.
The budget handouts reflected Congress’s worry about its fate in general elections following a string of state poll drubbings, analysts said. However, evidence that pro-people budgets win elections is not on the government’s side.
“A populist budget has worked only once” when charismatic Congress premier Indira Gandhi “was in full socialist flow and gulled the voters in 1971 with her rhetoric,” said national columnist T.C.A. Srinivasa-Raghavan.
But since then “populist budgets have never succeeded — not ever,” he said.
National elections are due by early 2009 bu