Once a year there is this ritual that the media and the Union minister for finance enact in India. It is on the Union Budget, or the Budget as it is referred to.

The ritual usually takes place on the first day of February. The air waves are clogged that day with news and discussions and the morning after, the newspapers are carpet-bombed with news and analysis. You would think from the coverage that it is a matter of life and death.

Why should a large volume of densely printed papers with endless lists of numbers, statements and a speech full of dull prose attract so much attention? Should people be concerned with a statement of accounts? They should not. Yet, they are persuaded to pay close attention because of an unstated arrangement between the media and the finance minister that is to the mutual benefit of both.

Why the drama

There was a time when the Union Budget was indeed of concern to individuals because each year, a vast number of tax rates – on incomes, business profits, imports and domestic goods – were changed, often substantially. This had a direct impact on people’s lives. There was also a great deal of secrecy in the preparation of the Budget, which added to the element of suspense. It was natural, therefore, that there was a lot of drama on Budget day. Newspapers gave vast coverage and, in the era before the internet, even printed the entire speech of the finance minister.

Over the past 20 years, however, tax rates have become more stable. Year-to-year changes are not frequent and when they are made, the magnitude of change is small. So you could say there is no longer any need for all the theatre.

Some would say we should still pay close attention because the Union Budget is more than a presentation of the annual accounts of the government of India. It is supposed to be an occasion when the government lays out its vision for the economy for the year ahead. Perhaps this was so earlier, but no longer. The Central government now rightly sees policy formulation as a year-round affair, so announcements are made through the year and decisions, including on tax rates, are at times made outside the Union Budget.

Tall promises, free publicity

So if there is nothing much really to be terribly exercised about, why do we still have all that razzmatazz on Budget day in Parliament, in press conferences, in television studios, and then in the newspapers the next day?

I can only speculate on the reasons.

One is habit and inertia. This is a tradition that goes back more than 60 years, so why change it? The secrecy, the spotlight, the sense of importance – everybody enjoys it, so everybody continues with it.

The second reason is that the government, working through the Ministry of Finance, makes the most of the attention it gets on Budget day. The government knows that whatever it says and whatever it promises on that day will receive maximum attention. Free publicity, it is called.

On the Budget numbers of expenditure and receipts, the government usually makes a lot of unrealistic assumptions to present a rosy picture and hide the true situation. The government does not care, because it will take some time for the truth to come out. (On occasion, that does not work, like it does not seem to have worked this year on the fiscal deficit numbers, but more on that later.) On new programmes and schemes, it is even more brazen. Usually, a slew of new programmes are announced. Some may be repackaged versions of older programmes, others may receive token financial provisions, some announcements are sent to a committee for recommendations, and some may just be promises soon to be forgotten, until the next year comes around.

So Budget day is when the government promises the moon and we are suitably awed. We may later realise that we have been taken for a ride. By then, the government has already extracted what it can with the good publicity. The bad publicity can be handled later.

Finance Minister Arun Jaitley at the halwa ceremony marking the commencement of the printing process for Budget 2018. The government makes the most of the attention its gets on Budget day. (Credit: PTI)

Media’s money-maker

If it is a bit of a sham, why then does the media give it so much positive attention? This takes us to the third possible reason. The media has a self-interest in continuing with the drama around the presentation of the Budget. There is big money in it, in the form of more advertising revenue than usual. By making the Budget presentation, discussion and news a media spectacle, television news channels and newspapers attract many more viewers and readers on Budget day, and this is then sold to the advertisers. Ever notice how on Budget day there are so many more advertisements on news channels and in the newspapers? Unknowingly then, if one has to be charitable about it, the media plays into the hands of the finance minister and gives him complete attention.

So, it suits everyone – the government of India, the finance minister, the media houses, the advertisers, the talking heads on television, and the columnists a plenty in the newspapers – to make a big deal of the Budget. We, the readers and the viewers, are left trying to figure out what was real, what was fake, what has hit us and what is just for the headlines.

This may be putting it all a bit strongly. There is the occasional real announcement, like the one in the 2018-2019 Union Budget on the new long-term capital gains tax on the sale of shares. There is no reason though why even something like this could not have been announced publicly and in advance, and the changes approved by Parliament. We do not need the drama and all the packaging with candy floss.

Lazy journalism

You would think that in this kind of situation, the media would use the occasion to its benefit. That it would sharpen its claws, see through the fake promises and call out the finance minister. Surprisingly, it does not do so, or at least it could do much more and not leave it to the exceptions. I do not think this is the result of any cosy relationship between the government and the media. It is just lazy journalism.

True, there is the time factor. You could say that about television, which has to give the news, see through the news and offer insights – all in real time. This is not easy to do, which is why even the tickers on the screen as the finance minister reads out his speech can be quite absurd. Considering that each channel has an army of panelists and more on call, viewers should be given a little more than they usually are. There is less of an excuse for the newspapers. They have close to an entire day to sift through the numbers and give us the true picture. But they do not. Instead, they give us a lot of “what the common man says” stuff, and volumes of inconsequential stuff or opinions from industrialists (who do not want to annoy the government, certainly not this government), from commentators who have clearly not bothered to carefully read even the Budget speech and look at the summary numbers in the document “Budget at a Glance”, and from taxation experts whose dense explanations go over our heads.

Many of these problems – a lack of integrity in the Budget numbers and the less than professional media reporting/analysis – were in evidence last week when the Budget was presented. You would think that alongside the bare details of the Budget (which television had already given extensive coverage to), the newspapers would provide analysis of the numbers, the proposed programmes and also discuss where the Budget had come up short.

Not so. Sevanti Ninan, editor of The Hoot, has already discussed how television and the dailies were just taken in by what the finance minister said in his Budget speech about rural development and social sector outlays. The media simply failed to provide readers any insight into the Budget.

Modicare hype

This was nowhere more glaring than in what the media was happy to reproduce without question as the world’s “largest healthcare programme” and was equally happy to pick up the finance minister’s sound byte christening it “Modicare”.

Any one who heard the finance minister announce a major initiative in health would doubtless have been pleased; healthcare is one area where everyone agrees we are doing poorly. The first thing that he or she would then ask is what is this National Health Protection Scheme about?

A series of obvious questions should follow:

  1. What are the details of this new scheme?
  2. Is this healthcare or health insurance? Will the scheme do anything for public health to prevent tragedies like the death in August of 60 infants in a Gorakhpur hospital allegedly because of a lack of oxygen supply?
  3. Many states have their own health insurance schemes. How is the new one different? How will the Central scheme work alongside those of the states?
  4. Doesn’t the Centre too already have its own health insurance scheme? How is this one going to be different?
  5. Has the current Central scheme been working well? An expansion was promised in 2016 – what happened?
  6. And the big question, of course: has the government provided any money for the new scheme?

Did any of us see a discussion on these lines in the papers the next morning? No.

Here was the biggest promise in what everyone expected to be an “election Budget” in the run-up to Lok Sabha polls due in 2019. So, instead of looking at that one paragraph in the Budget speech more closely, the newspapers were happy to put out news of the scheme much like a press release. Here and there in the newspapers, we had a sentence or two close to hesitant in saying no provision had been made for the scheme. (The Indian Express had this most forcefully said in its headline.) Other than that it seemed as if the media had swallowed the Budget announcement hook, line and sinker.

In the days that followed, a number of commentators did look at the scheme (or what few details we had) more closely and also the various aspects of healthcare. In a sense, it was too late. First impressions count and there it was “mission accomplished” for the Narendra Modi government. Their grand promise had been successfully sold.

One could say the same about the media’s overall coverage. Everyone did cotton on to the fact that the agriculture or “rural development” package had a lot of listings in the Budget but these did not amount to much. Almost no one put the fiscal deficit, expenditure, income and capital receipt numbers, among others, through the scanner. Everyone did highlight the expected introduction of the long-term capital gains tax. Very few, though, cared to (a) explain and analyse the rationale for the new tax, (b) outline how a seemingly complicated measure would work, and (c) give an illustrative example of what could be the burden on an investor.

The collective hysteria we have built for decades around the Budget cannot be broken easily. (Photo credit: Reuters)

The exceptions

True, there were exceptions. On the fiscal deficit numbers, there was this quick assessment in The Wire on the day of the Budget itself. And the next morning, there was this analysis in Mint. Readers, however, do not pore over every available publication. Each of them would expect their morning newspaper (or two) to give them a comprehensive assessment.

Online publications such as Scroll.in and The Wire did a surprisingly better job the morning after the Budget. It may well be that free from the demands of having to reproduce all the details of the Budget, they could focus on analysing the substance (or what was supposed to be the substance).

Scroll.in, for instance, was right on target in exposing the neglect of public health in the Budget. It showed up the limited allocations for rural development as well as the problems of too many announcements and too little money for agriculture; and revealed even the false promises in education. Where it disappointed was in its analysis of the tax proposals. This was quick off the blocks but did not say anything other than make sweeping generalisations about the middle class being short-changed.

It was intriguing that no journalist in Scroll.in or elsewhere went beyond buying into the short-changing-of-the-middle-class argument. Whoever the middle class may be, does short-changing mean a larger net tax burden on the salaried, or did it mean no concessions for the salaried? I did not see any illustration of the net income tax burden turning out to be higher after the standard deduction, higher cess and long-term capital gains (on, mind you, gains of more than Rs 1 lakh a year). And is handing out concessions, including to the middle class, all that the Budget should do?

There was no assessment in Scroll.in of the Budget’s fiscal deficit numbers (all important for the markets) and I did not see a comprehensive overview (the summary we had the next morning was scanty).

To go back to what I started with, we would be better off with reduced media coverage of the Budget. The government may then even reduce the extent to which it tries to sell dreams it knows it cannot realise. The media can then marshall its resources to more closely examine the Budget numbers and announcements.

Who will be brave enough to break from the herd? The collective hysteria we have built for decades around the Budget cannot be broken easily.

Disclosure: For more than a quarter of a century, I earned my bread in the media in part by participating in the annual ritual. So I have done my bit to maintaining the hysteria. It took me some time before I realised we were being taken for a ride.

The Readers’ Editor can be contacted at readerseditor@scroll.in