The middle classes have come of age. They count. This is the core message of Finance Minister Jaswant Singh's Budget 2003. It is a budget that explicitly recognises what the political class has known all along-without the middle classes, the BJP is a big zero. The 4.5 crore households with cable TV connections or the 6.6 crore households with refrigerators cannot by themselves vote in a government. Political parties need a wider social base to prevail electorally. But this middle strata is at the core of the BJP. Without its endorsement it cannot move ahead.

REFORMIST ZEAL: Jaswant

Unlike the Congress whose core vote comes from the disadvantaged groups on the margins. This divergence explains the conflicting impulses behind a budget. The Congress tries to squeeze industry and the small base of income-tax assessees to finance its welfare schemes. The Third Front parties look to more subsidies for farmers. And the BJP aims at placating the middle classes. Having been squeezed exorbitantly earlier-during Indira Gandhi's socialist phase, personal income-tax rates touched 98 per cent-the middle classes have begun to matter. With the services sector making up 49 per cent of the GDP and more affordable consumer goods forcing lifestyle changes, the middle classes now constitute at least one-third of Indian voters. By the next decade, 45 per cent of India may well be middle class in either lifestyle or aspiration. The age of punitive taxation is over.

JASWANT'S OPTIMISM
"Often budget exercises float over the wide mass of India, relating only to a few. This is not so here."	"Our reform agenda must not be held hostage to yesterday's debates nor to its selective interpretations."
"Our taxation has to move away from a suspicion-ridden regime to a trust-based system."	"The essential entrepreneurial character of our citizens is our greatest asset. This energy has to be released."

Last year, Yashwant Sinha forgot some of these ground rules. "I am sorry, the demand does not come from the middle class," he told India Today after his Budget 2002 left the middle class furious. Prime Minister Atal Bihari Vajpayee was forced to replace him with a man who is the nearest Indian equivalent of a western conservative. The personality of a finance minister invariably leaves its stamp on a budget. Manmohan Singh was an old school pinko-turned-reformer with a cautious bent of mind. P. Chidambaram was a committed reformer in a government dominated by neo-Luddites. His audacity was an aberration. Sinha, a former bureaucrat who drifted from the Janata Dal to the BJP, was both cautious and politically unsure. Buffetted by conflicting advice and a relatively fragile economy, he faltered horribly last year.

There are two things going for Jaswant. First, he is a politician interested in the big picture. He has the requisite clout to decisively define the political direction in an important election year. Second, unlike those who have stumbled into a reformist course because it is either expedient or fashionable, Jaswant is genuinely committed to deregulation and debureaucratisation. This shows. Budget 2003 is a landmark. Not only has India found a new champion of its economic resurgence, the middle classes have never had it so good.