CPI-ML New Democracy

On Union Budget 2020-’21 : Attacks on the People Intensified

Union Budget presented by the Finance Minister for the year 1920-’21 bears all the marks of the crisis ridden economy and the Govt.’s attempts to put the burden of the crisis on the people. With glum faces of treasury benches, Finance Minister laboured for nearly two and a half hours to search for any announcement for the galleries. Failing to find one she sat down after over two and a half hours. The whole Budget exercise was a brazen attempt to not acknowledge the dire straits in which the economy finds itself, it is equally brazen in its prescriptions of the very measures which are responsible for the downslide of the economy and increasing hardships of the people.

Over the years the present govt. has perfected the art of statistical jugglery to the extent that every aspect has become suspect. RSS-BJP Govt. has dished out suspect figures and prohibited publication of uncomfortable ones. Even two months before the end of the financial year, Finance Minister presented the figures for the whole year which could only be guess work. This Govt. has changed the very method of calculation of growth and even this changed method could not and has not been able to hide the dark tidings of economic slowdown with growth rate numbers of plummeting to lowest over past seven years and that too the doctored numbers. Finance Minister did not even acknowledge the highest ever unemployment rate with CMIE calling it 7.3%, highest over half a century. Given the hardships faced by the people, declining consumption in the rural areas, declining wages in both rural and urban areas and declining sales of the essential commodities, any growth is inconceivable.

RSS-BJP Govt. is loath to admit the very fact of economic slowdown, forget the deepening economic crisis engulfing the country. Such admission would demand analysis of its causes and redressal of the same which the corporate masters- foreign and domestic- would not permit. They have turned a blind eye to the basic cause of economic slowdown- the decline in demand- which is the result of declining purchasing power of the people, whose overwhelming majority consists of peasants and workers. There is not a single measure addressing this situation, no step in the direction of increasing the purchasing power of the peasants, agricultural labourers and industrial workers.

Rather the Govt. in the service of the foreign and domestic corporate and protecting the big landlords, has gone on to rob the people. It has cut the expenditure on the social sectors and chanted the mantra of privatization to address all the problems of the people. Even in the year gone by, the Govt. robbed the public sector banks including RBI and also public sector enterprises, went on divestment of PSEs, cut the expenditure on the social sector which is any way abysmal and yet the fiscal deficit rose and this rise is due to service of the corporate and not measures for the people.

Budget proposals of RSS-BJP Govt. continue the same track of divestment of public sector and cut in the social sector expenditure while increasing the burden on the people through increase in indirect taxes on different commodities. This Budget marks the biggest attack on the people in the recent past. Sector after sector have been denuded of the financial support while freebies are being handed to the corporate in the form of tax cuts.

The Govt. has targeted dis-investment of Rs. 2.11 lakh crores of which Rs. 1.20 lakh will come from the sale of Public Sector Enterprises and Rs. 90 thousand crores from the public sector financial institutions including PSBs and LIC. The latter is to be divested through floating an IPO. Sale of PSEs like Air India, BPCL and Concor is being undertaken. There is also an announcement of the plan for monetization of highway projects thereby increasing toll taxes. Privatization of Railways is being implemented with increasing sectors being given to private players. And all this money will fill the coffers of the corporate friends of RSS-BJP.

A very important aspect of the Budget is total neglect of the agriculture and rural areas. Over two thirds of the people live in rural areas while agriculture employs nearly half of the work force of the country. There is effective deduction in the allocation for agriculture, irrigation and rural development. While agriculture and irrigation have been allocated Rs. 1.60 lakh crores, rural development was allocated Rs. 1.23 lakh crores. This allocation is only 2.5% higher than last year which is lower than inflation rate which makes it effective deduction. Regarding agriculture, in the 16 point plan there is not a single measure addressing the agrarian crisis. On the other hand there is a cut in the fertilizer subsidy which means increase in the prices of fertilizers thereby further increasing the cost of production while taxes on diesel resulting in its high prices further increases this cost. But there is no mention of any increase in MSP for the agricultural produce or increase in its coverage. This Budget is out and out anti-peasant. The only measure the Govt. announced is increase in the allocation for the credit- a bane for the already indebted peasantry.

RSS-BJP Govt. has attacked the most oppressed sections of society the most. There is a cut of Rs. 9,580 crores (13%) in the allocation for MNREGS (as compared to RE for the year 2019-’20). There is gigantic cut in the allocation for food security act which has been substantially reduced. Despite all talks for the oppressed castes, RSS-BJP Govt. has continued cut in the plan outlay for the Scheduled Castes. This cut has become particularly serious over the last two years. There are similar cuts in the other schemes meant for the poor and oppressed.

Despite its chant of Make in India, there is no measure to revive industrial growth. The measures for the MSMEs are mostly cosmetic and will have no effect of spurring growth. The only measure alluded to by the Finance Minister is increasing contractualization through her averment of strengthening Contract Labour Act. Sector after sector are facing decline or stagnation but no measures were announced for overcoming that. The only measures are increasing privatization which cannot but have more deleterious effect on the conditions of the working class particularly its organized sections. Unorganized workers any way do not enjoy any rights.

Finance Minister talked of aspirational India but hit the aspirations of the common Indians the hardest. The allocation on Health (nearly 67 thousand crores) was only 3.8% higher than last year which does not even cover inflation. Allocation for much touted Ayushman Bharat has remained stagnant which means effective reduction despite low coverage of this repackaged scheme. Allocation for basic sciences has not been enhanced while allocation for medical sciences has been reduced. Finance Minister announced novel scheme for the private medical colleges to utilize govt. district hospitals. The whole health sector is being driven on PPP mode. The total allocation in the Union Budget for Health sector represents 2% of the Budget and only 0.3% of the GDP.

Similar treatment has been given to Education with only roughly 3% of the budget and roughly 0.45% of the GDP marked for it. The Govt. has announced increasing privatization and has come down heavily on the higher education particularly on social sciences. In short Education has been given a shabby deal in the Budget.

Despite all attempts Union Budget could not hide the grave situation of the economy and the people. Indians are the hungriest people in the world as shown by World Hunger Index. We are on the top in the prevalence of communicable diseases which have been eradicated in the major part of the world. In face of such high unemployment rate no measures have been announced to increase employment and provide no relief to the unemployed show scant regard for the youth of the country.

On the taxes, there has been juggling with rates without any real benefit to the middle classes and well paid workers. Lowering of rates while doing away with exemptions will in fact mean increase in the burden for the needy. On the other hand, corporate taxes have been reduced probably learning from the last year when the Govt. had to beat a retreat barely days after announcing increase in the taxes on the corporate.

There has been increase in the custom duties but a perusal of the items on which taxes are increased shows that these are mainly imports from China. Coming after Modi Govt. refusal to be part of RCEP, it only demonstrates that the Govt. is targeting China in its international trade practices.

One of the most glaring aspects of the Budget proposals is sharp increase in the allocation for internal security. Budget for the Home Ministry has been increased form Rs. 1,19,025 crores (last year) to Rs. 1,67,250 crores this year, an increase by over a third. On the other hand, the allocation for the defense forces has not been increased. This demonstrates, Govt. protestations notwithstanding, that the RSS-BJP main thrust is to suppress the people of the country. They raise the bogey of foreign threat but they know that the main threat comes from within the country. Their fascist drive is facing resistance from the people and increased allocation for the Home Ministry means further increasing the security apparatus to suppress the people of the country. They consider the people of the country as their main enemy. This is the department whose allocation increased so sharply and people should know the future direction of the RSS-BJP Govt.

RSS-BJP Govt. has systematically eroded the financial powers the state govts. which is line with their continued attack on the federal structure. While imposition of GST has eroded the power of the state govts to raise resources, there has been reduction in the states’ share of the taxes. Though this reduction is only marginal at present but shows the direction. This is on top of the with-holding of the states’ shares in the taxes. Further, the share of the South Indian states in under strain. This reduction is also important in view of the most of the social sectors including health and education being primarily state subjects.

The whole Budget is anti-people and must be opposed. It clearly shows that the RSS-BJP Govt. is determined to increase the burden on the people to serve the interests of corporate- foreign and domestic- and landlords. It is devoid of all considerations for the people. It will further suppress the purchasing power of the people.

The Budget speech of Ms. Nirmala Sitharaman was not totally bereft of new content. She deciphered the Indus Valley script besides naming that ancient civilization as Saraswati-Sindhu Civilization gladdening the hearts of the powers behind the throne, the mandarins of Nagpur.

Central Committee

CPI(ML)-New Democracy

February 1, 2020