The Anti-People Budget
By Spandan, AIITEU Delhi NCR
The BJP-led Union Government presented its financial budget on February 1st 2022. At a time of great economic distress in the country, the hopes of the people were pinned on the budget to provide some respite. What we got instead was policies which only favour BJP’s corporate friends.
India has been going through its worst phase of unemployment. Recently, when Indian Railways provided openings for 35000 jobs, 1.25 crore applications were received for the same. Inflation has also been peaking, with soaring prices for all essential commodities. 84% people have had income cuts and 59% MSMEs have either scaled down or shutdown resulting in huge job losses (Oxfam,2022). This is an indication of an increasing wealth inequality and the market’s response to it.
These privatisation measures towards monopolisation cause job losses as there is constant reduction in the workforce, and as a result, fewer people being able to afford things increases prices of goods. This is verified by the fact that the richest 1% of the country increased their wealth by around 35% during the pandemic.
The scenario calls for increased government spending on welfare measures while providing income tax relief to the working people and increasing corporate profit tax. Let us analyse the key provisions of the budget which went in the opposite direction.
Declining trends in government expenditure for social and economic welfare
The expenditure on welfare schemes needed a boost but the expenditure on rural employment guarantee schemes (MGNREGS) was cut from Rs. 98000 crore to Rs. 73000 crore. Subsidies on essential commodities — food, fertiliser and petroleum were cut by 28%, 25% and 11% respectively. Allocation for procurement of wheat and paddy was cut by Rs 11000 crores whereas allocation for the housing scheme (PM Awas Yojana) was also cut down from Rs 20390 crores to Rs 20000 crores.
The increase in LPG prices to facilitate the entry of Reliance into its market by reducing government subsidy to zero has resulted in nearly 42% rural households returning their LPG cylinders. At the same time, the allocation on the rural LPG scheme (Ujjwala Scheme) has been reduced to half from over 1600 crores to 800 crores.
Given the serious suffering of the people during the pandemic, it was expected that the government would increase allocation for health. But that was not to be. The Modi government’s apathy towards the health of the people was again displayed in the allocation to health in this Budget. The Health Ministry’s share in the total budget expenditure has gone down from 2.35% last year to 2.26% this year. As a share of GDP, it came down from 0.38% to 0.35%. The allocation for school education too, of Rs. 37,383 crore in this Budget, is less than the pre-pandemic level of Rs. 38,750 crore proposed in the 2020–21 Budget.
This only indicates that more people will be pushed towards unemployment, there will be an additional problem of debt because of inflation & survival costs, especially for essential commodities. More people would be forced towards hunger with the ration scheme coming to an end.
Anti-worker, pro-corporate budget
There were expectations of some respite in income tax for the working people especially with income cuts and inflation, but the slabs were left unchanged. The corporate taxes weren’t increased either. Corporate taxes, which have constantly been cut with a major slash right before the pandemic in 2019, could have been reversed but there has been no intent to do that either. The gross increase in the budget expenditure is 4.6%. With inflation at 5.3%, there is a net reduction in government spending at this time.
The corporate media, with its own vested interests, is only talking about how the shrinking economy has strained the government. But the fact is that the cuts in corporate taxes in 2019 has caused a loss of Rs 1.45 lakh crores. The wealth tax was removed in 2017 and as per Oxfam report if only 1% wealth tax was applied on the pandemic earnings of the top 11 billionaires in India, the Jan Aushadhi public health scheme could be improved by 140 times.
The concessions given to the corporate houses have been 1.97 lakh crores in the last two years. The corporate tax dues from the last two years which have not been collected is nearly Rs. 2.35 lakh crores while those under dispute are Rs 7 lakh crores. Our country is also paying the highest taxes on oil and petroleum products. All these indicate that the government has only been working for the corporations instead of the people, piling more misery on the masses everyday.
Wholesale loot of public assets
It has been announced that ‘bad banks’ with a starting capital of Rs.59,000 crores by the end of Q1 will purchase non-performing assets (NPAs) and bad loans, which in turn, is going to force banks into giving more carefree bad loans.
The privatisation of the strongest of public services has already been announced by the government and a National Monetisation Pipeline has been created for the same whether it is defence or banking or coal. The IPO for LIC has been announced, which is an indication that it will be privatised soon. Air India was recently sold to the Tata’s and the government announced clearing off its losses of nearly Rs. 51000 crores.
Seeing the two trends together exposes the entire privatisation game for corporate benefits. The government constantly reduces its spending on public services and instead uses it to bail out the corporations. The public services thus incur additional operational losses due to negligence and lack of optimisation.
We must understand that some losses incurred by public resources are out of responsibility — that is the reason taxes are collected in the first place. For instance, Air India had many flights for remote locations even though they didn’t run on full capacity. This was because of a responsibility to connect all places, and to provide a service even to the few people who needed it. The market with its profit motive would not run those flights or have unaffordable ticket prices. But such losses, both because of responsibility and government negligence are highlighted and a narrative for privatisation is set. Privatisation has a primary profit motive and thus it increases unemployment and inflation at the same time. This, in a nutshell, is what is happening in our country right now.
Being in line with the neoliberal policies, the pro-corporate government even on welfare measures, instead of collecting higher taxes and spending on people, have inculcated the habit of issuing bonds. Thus, for lowering carbon emission and for investments in renewable energy, green bonds have been announced. As per bonds, the government would issue debts and pay interests to receive corporate capital for its expenditure. Application of these policies for a domain like renewable energy would mean providing a CSR outlet to companies to save taxes on it and at the same time provide interest on the same. Somehow the media with the investments of the same corporations who are benefiting by government measures would always propagate that welfare and profits go hand in hand despite perpetual evidence against the same.
As mandated in Article 112 of the Constitution of India, the Union Budget is an Annual Financial Statement from 1 April (the beginning of a new financial year) to 31 March (the end of the financial year). It is meant to give an account of how much the government has spent on the welfare of the people and what it intends to do in order to meet the needs and challenges that are faced by the people for the coming year.
The 2022 budget is a statement of the government’s intention to ignore the problems of the working people by spinning a story of prosperity which does not exist in real life. It is nothing but a contempt and mockery of the people’s misery.
Its implications of further profiteering during the crisis and destruction of livelihoods is proof that the government and the private media only serve the interests of the business class. The rich keep getting richer while the working masses are pushed into poverty and this will continue as long as the political will of the government is to work for those who funded its election campaign instead of the people who elected it.
