Central Budget for 2014-15 presented by the Union Finance Minister today has been in macroeconomic sense a continuation of neoliberal model of Manmohan Singh- Chidambaram. It ignores the big concerns of people which BJP emphasized during recent election campaign like price-rise, unemployment and declining economic growth. No concrete measures have been announced on addressing rise in the prices of essential commodities. Moreover Govt. decisions like raising railway fare and freight, increasing prices of petroleum products including kerosene and cooking gas will fuel further price rise increasing economic burden on the common people already groaning under economic hardships. Similarly the Union Budget is devoid of any measures of addressing stagnation in industry and agriculture, the core sectors of economy providing employment to large sections of people. Finance Minister has resorted to tokenism in addressing these serious issues and setting up committees. BJP Govt. has lived up to Modi’s announcement of adhering to Manmohan Singh’s economic policies and Arun Jaitley sounded like his predecessor in announcing schemes after schemes with token allotments, mostly recycled and renamed versions of the existing schemes, while giving largesse to foreign and domestic corporate. This budget shows that Modinomics is but a continuation of Manmohanomics. He even retained fudging of Budget figures which BJP had criticized while in opposition like figures for revenue (an increase of 17%) etc. and comparing his budget proposals with previous year’s actuals on social spending which have always been lower.
Finance Minister prefaced his budget proposals with serious situation of global economy, declining growth in emerging economies and growing conflicts in Middle-East. From there he proceeded to lament “extremely limited fiscal space” for any meaningful measures. With these he set the tone for doing little for the people’s problems with empty rhetoric of higher growth after 3-4 years without any road map as to how this is to be achieved only to deceive the gullible and keep up the election demagogy. While neglecting agrarian-industrial crisis, there is lopsided emphasis on construction and infrastructure sectors to spur growth which in the absence of agrarian-industrial growth would only result in deeper economic crisis and higher debt burden on the economy.
Revenue deficit continues to rise with revenue (central share of taxes) falling nearly 30 percent short of non-plan routine expenditure of the Govt. Debt servicing burden has increased to nearly one third of govt.’s total expenditure and more than half of its revenue collection. Added to this nearly one third of the govt. expenditure goes to armed forces and central armed police forces and further over a fifth on Govt. employees leaving nothing for expenditure on the people. This is reflected in tokenism, empty announcement of schemes which are not carried and even plain platitudes offered to the people.
Saddled with nearly 22 lakh crores of foreign debt with high debt servicing charges, the Union Budget sets all score on further inviting foreign capital (FDI) and private public partnership (PPP) mode for all its initiatives and for pulling the economic from the abyss in which it has fallen thanks to the very same policies being pursued by the successive govts.
For raising of money, Central Govt. has, like its predecessors, sought to raise more than 60 thousand crores from disinvestment with nearly three fourth of it coming from selling govt. stakes in PSUs. This selling of family silver to meet routine expenditure shows that BJP Govt. wishes to continue with the earlier policy of serving corporate interests at the expense of people with whose toil these enterprises were built.
Union Budget does indicate direction to be pursued by the Govt. Arun Jaitley has announced review of subsidies though not announcing any cut in the Budget thus hanging a Damocles’ sword over food, fuel and fertilizer subsidies. On the other hand, he was particularly vague on Non Performing Assets of nationalized banks held by big capitalists.
On the other hand the Govt. has gone all out to invite the FDI allowing 49% of FDI in defense production and insurance thus giving foreign companies from imperialist countries control over defense production and capital formation. The Budget has announced a number of sops for foreign funds investing in Indian share market and also to Indian companies soliciting loans in foreign markets. Besides, the Finance Minister has announced intention of his govt. for speeding mining, particularly of mineral resources. Financial sector reforms like strengthening trade in currency derivatives and dealing with corporate lending, are also targeted at giving greater role to international financial sharks.
For the agriculture, the largest employer of labour force, the Union Govt. cares little except for increasing credit without bothering that Indian peasantry has become hugely indebted resulting in a large number of suicides by peasants. There is scanty allotment for irrigation through “Pradhan Mantri Sichai Yojna” while large part of agriculture in the country continues to be rain dependent. There is no attempt to address the systemic causes of agrarian stagnation. However, the Govt. besides increasing credit availability to landlords, is also planning to allow use of MGNERGS labour for agricultural purposes benefitting them. No attention is paid to declining rate of growth in agricultural production even in the areas of so-called Green Revolution. On the other hand, process of interlinking of rivers has been started which is disastrous initiative involving huge displacement, reduction in area under cultivation, big use of power and infringing states’ rights over river waters.
Industrial sector particularly manufacturing, the second largest employer, has also remained neglected. No attempt has been made to address the causes of deep seated crisis affecting this sector. Lip service is paid for Medium and Small Enterprises which is the main employer in industrial sector by setting up fund but making no arrangement for market for their products. Textile industry which is also a big employer has also got cursory attention with a measly 200 crores allotted for six textile megacentres.
With no plan or policy for improving the performance of manufacturing sector, Govt. plan for Industrial Corridors and setting up urban centres in these corridors which involve huge displacement of peasantry, will only be a bonanza for real estate barons.
The whole emphasis of the Central Govt. has been to promote construction industry and infrastructure for which a number of sops have been announced. In this regard, the orientation of last two years’ budget is being carried forward. And for this, large-scale influx of FDI and corporate funds is being sought. However, no mention is made of huge construction work force which continue to labour and live in inhuman conditions. Govt. has announced its intention to operationalize the existing SEZs and to start six new SEZs which are but another name to give unbridled powers to foreign and comprador capitalists to scuttle labour laws and shirk taxes besides getting peasants’ land at throw-away prices. BJP Govt. has again brought to prominence SEZ mode of industrial development, ostensibly to promote exports. There was not even a mention of workers or their interests in the Budget speech.
BJP Govt. has continued the neglect of basic social sector spending with Health and Education again getting raw deal. Again the intention of opening new institutions is not matched by allocations. Similarly while the Finance Minister talked eloquently about promoting solar power, the allocation does not signify serious intent in this regard.
While some tax cuts have been announced on the articles of consumption for the urban middle class, economic burden has been increased on the common people. Moreover, neglect of rural areas has been most obvious in the Budget proposals. No effort to check price rise or increasing employment can be seen in this Budget.
The Union Budget while being an exercise in fudging of figures, subterfuge of its intent and tokenism for the people, is actually a Budget for the corporate. It has been a payback time with corporate having gone all out to bring Modi led BJP to power. It ignores the concerns of the common people, rather increases their burden. It seeks to perpetuate and invigorate the very policies which have brought economy to crisis and increased poverty, destitution, misery and hardships of common people. Issues of workers, peasants, youth and oppressed have been given a short shrift.
July 10, 2014 Central Committee, CPI(ML)-New Democracy
