Union Budget 2022-23: Takes Service to Corporate to Further Heights

Union Budget presented by Finance Minister today is marked by total disregard of the concerns of the people of India and single minded pursuit of serving the interests of foreign and domestic corporate and reactionaries. It appears that the Union Govt. was keen to show to the ruling classes and their imperialist masters that repeal of three Agri Acts was forced upon them by the struggle of farmers and does not in any way represent any dilution in their commitment to serve the interests of these sections.

In the Union Budget 2202-23 there is no relief to the people of the country, any section of the people. There is no concern to address the agrarian distress which had propelled a yearlong protest of peasantry that had forced the Govt. to repeal the three farm laws. Even the issue of MSP which the Govt. has committed to ensure to every farmer has not even been mentioned except to announce allocation of Rs. 2.37 lakh crore rupees for procurement on MSP. There has been no announcement on irrigation. There is much talk about promotion of oil seeds production and millet cultivation but there is no concrete action on that. Moreover domestic production of oil seeds has been stagnant over the years. Some measures have been announced invoking the name of small peasants like making agricultural machinery available on rent but these lack any substance and are mere window dressing.

In fact some schemes like house constructions, tap water connection, infrastructure development will have rural component but the Govt. has refused see the need to address the concerns the issues of rural masses who constitute more than two thirds of the population of India. Any hope that in this Budget Govt. will address the concerns of farmers should have taken clue from the fact that this Govt. had allowed the peasants to suffer for a full year on Delhi borders; slandering them, refusing to even having any dialogue with them.

Rural India has in fact got a raw deal in this Budget, may be as a punishment for having rejected cherished agrarian reforms of this govt. Allocation for rural development has been reduced by 655 crores i.e. from 206948 crores in Revised Estimates (RE) to Rs. 206293 in this year’s Budget. Budget allocation for MNREGA has been from Rs. 98000 crores in RE to Rs. 73000 crores in this Budget. Even the allocation for agriculture ministry has been kept almost same i.e. Rs. 1,47,000 crores in RE and Rs. 151000 crores in this Budget. In fact the cut in subsidy for fertilizer has been reduced from Rs. 140122 crores in RE to Rs. 105222 crores in this Budget which will make fertilizers even more costly and out of reach of the peasants further increasing their cost of production.

The Govt. had earlier announced emphasis on One District One Product to develop raw material source for corporate. In the Budget, Finance Minister announced that Railways will give concession on the basis of One Station One Product thus paving the way for captive production for the corporate in different regions/areas.

Successive govts. have reduced the Budget exercise to buffoonery increasing taxes around the year, juggling the facts and figures and in short making whole exercise devoid of any substance. Yet this year’s exercise goes some way in taking this buffoonery to a virtual ridiculous limit. Yet one can discern the direction being taken by the Govt. Despite that what one could hear were showering of largesse on corporate in one way after another. The whole Govt. has gone on PPP mode i.e. partnership of public money and private profit making.

Last year the corporate tax was steeply reduced. Five years earlier by this very Govt. wealth tax was abolished. This year surcharge on corporate was reduced from 12% to 7%. Further tax incentives to the start-ups have been further extended. However, there was no relief to the common people including govt. employees except bringing standard deduction for state govt. employees being brought at par with Central Govt. employees. With IT limit remaining unchanged not even taking into account increase in prices govt. employees will pay more in income tax.

People of India have been squeezed through sharp increase in indirect taxes, and the Finance Minister has complimented herself on this success but no relief on this heavy burden on the common people. In fact that is the main tax revenue of the central and state govts. Over the past one year tax on fuel has been increased by 79%. Govt. has tried to cover up sharp increase in prices of essential commodities by recourse to “refined core inflation” to hide the burden on the people. These indirect taxes constitute a major reason for the price rise.

Despite people of the country having suffered heavily during pandemic, losing lives and jobs, there was no announcement regarding expenditure on health having reduced Union health budget by 10% last year. In fact allocation has remained the same not even accounting for inflation which amounts to actual reduction. This is criminal but the whole handling of pandemic by the Govts. have been nothing but criminal heaping death and helplessness on the people. Except some remarks like mental issues arising out of the pandemic or custom duties on some equipment there has been total silence on the major issues of providing health care services in India. It is important that for the people of India who are among the poorest in the world having gone even poorer during the pandemic except a small section of rich, out of pocket expenditure (OoPE) is calculated to be about 62.67% of the expenditure on health care while global average is 18.12% which pushes a large number of people into poverty. The emphasis of what remains is on telemedicine and digital health.

Education has fared no better. The whole emphasis is on distance education which is in fact distance from education for the vast majority of people. Finance Minister laid emphasis on E-vidya (outsourced to 200 TV channels). The allocation on education has remained virtually stagnant i.e. this year Budget allocates Rs. 104278 crores while last year’s budget allocated Rs. 93224 crores. And this despite the fact that the Minister had to admit loss of two years of formal education which means loss of two years of any education for the children from the poorer or even average income families. However like all social sector allocations there is no guarantee that even the allocated amount will be spent. While ruling class parties quarrel over their education models model pursued by all of them is against education to poorer sections of society, in fact virtually taking them out of the formal education.

The cuts by Govt. have affected all poor – rural and urban. In fact the pandemic has reduced the difference between poverty levels in rural and urban areas, with urban poor being hit the worst. This callous disregard can be seen in sweeping cut in food subsidy. Food subsidy amounted to Rs. 5411330 crores in 2020-21 Actuals and was Rs. 286489 crores in 2021-22 RE but has been allocated only Rs. 206831 crores in this budget. It means a number of schemes will be stopped or curtailed. That too when India ranks 104 among the 116 countries in Global Hunger Index and has added nearly half of those rendered absolutely poor during the pandemic i.e. far in excess of our share in the world population.

Union Govt. has only repeated the failed policies regarding industrial development. Firstly contribution of manufacturing in our GDP has steadily declined over the years due to the policies pursued by successive govts. Gross Value Addition (GVA) from manufacturing has decline from 17.5% in 2011-12 to 14.4% in 2020-21. Micro, Small and Medium Enterprises (MSMEs) provide for bulk of the employment in industrial sector and they were hit hard during the pandemic. In fact there was little effect on large industries and the brunt was borne by MSMEs. Despite talking about helping MSMEs the Union Finance Minister extended little help to them. She only rehashed the credit schemes announcing Rs. 2 lakh crores in loans and a further Rs. 5 lakh crores in loan guarantees. What MSMEs need are institutional safeguards including sectors marked for them for they can hardly stand in face of large companies facing extinction or becoming their local clients where nearly all the value is siphoned off by big capital – foreign and their compradors. Of the 63 million MSMEs, nearly 94% are tiny (micro) and only 0.57% medium size. However, they employ most of the industrial labour and are critical to industrial growth at present. They face formidable existential challenge from corporate backed by the Govt.

Form the policy of the RSS-BJP Govt. as further evidenced by this Budget, there is total emphasis on helping foreign and domestic corporate players. Much is made of the Capital Expenditure (Capex) by Modi Govt. announcing nearly 35.4% increase in capex in this Budget though it is nearly half of that if compared with revised estimates. Interestingly take over by the Union govt. of debts of Air India, whose hand over to TATA has been completed, has been announced to be part of capital expenditure of Union Govt.! Handing over of AI (with almost all the debts taken over by the Govt.) and converting all the loans of Vodaphone Idea (VI) into equity by the Central Govt. is now form of capital expenditure. It may be broadening the corporate base of RSS-BJP govt. which has been seen to favour the two- Ambani and Adani. Finance Minister announced that strategic partner for Nilachal Ispat has already been selected.

In fact Modi Govt. has taken the privatization spree to a new level. Till now it was handing over of the profit making enterprises or indebted enterprises but without debt to private players. But now even that has run its course. Now the Govt. is building new enterprises only to hand them over to private players. Finance Minister has announced “growth through public investments”. See it in combination with Modi’s repeated assertion that Govt. has no business to be in business and contours of the policy is clear. It is not enough to give loans to corporate but to take over all the risks and hand them over in working profit making state. The whole push of Finance Minister on Infrastructure with seven transport engines was in fact a push for PPP i.e. public money and private profit.

This desperate drive for service to corporate is part of the service of the imperialist interests. Not only foreign corporate are important players in different sectors, investment of imperialist MNCs is increasing in major corporate houses including Ambani, Adani, Mittal while older ones any way were deeply tied to foreign corporate. Even the startups which are much touted by the present govt. are in fact vehicles of foreign investments. The very size of these startups and also the area in which they are springing indicate their origin or support. Most of these are vehicles of imperialist capital to take advantage of tax incentives.

This budget follows the failed policies in face of rising problems of the people. It runs counter to what is needed for the people. It does not address agrarian distress, is clueless on declining manufacturing. It takes the essential needs of the people – food, shelter, health and education further away from their reach. Finance Minister has bandied the vision for 25 years, so-called Amrit Kal, but it will only increase people’s challenge to this anti-people govt. of fascist forces. One thing may be of use to them i.e. E passports in case people’s movements rise to challenge them, some of them already having made arrangements for residence abroad, many had from earlier.

This brazen attack on the people must be opposed. Militant People’s Movements must be built and developed. Alternate vision and policies must be propagated to draw the people into struggle that the present dispensation must and can be changed. Mobilize the people and unite with all the struggling forces to build people’s movements.

Central Committee
CPI(ML)-New Democracy

February 1, 2022