CPI(M) Polit Bureau has issued the following statement on February 1, 2018

THIS last full budget of the Modi government before the next general elections reflects, once again, its clear commitment to serve the interests of foreign and domestic big corporates while mounting further assaults on the vast majority of the working people of our country. This assault is, however, sought to be window-dressed to appear as its opposite.

The budget does not seek to mobilise revenues by increasing  direct taxes applicable  to the rich, in spite of the fact that the top one per cent of the Indian population  garnered 73 per cent of the additional wealth generated in 2017. On the contrary, governmental expenditures increasingly rely on indirect taxes which are a burden on the common people. In fact, the proportion of the direct taxes in gross central taxes are budgeted to come down from 51.6 per cent to 50.6 per cent.

A lot of fanfare is being created by packaging the budget as pro-poor by projecting massive expenditures on agriculture, rural development and national health care scheme of medical coverage of 10 crore households upto Rs 5 lakhs per year. The health care scheme is a mere repackaging of the existing one and no additional allocations have been budgeted. It is clear that this scheme will also be used to give handouts to insurance companies.  Experiences have shown that health or crop insurance schemes have resulted in a profit bonanza for corporates rather than benefits to the people.

This is a contractionary budget.  This means that there will be further reduction of employment opportunities and social welfare expenditures. The government expenditure to GDP has now reduced further from 13.2 per cent to 13 per cent. Last year, the levels of capital expenditure on central social schemes were below the budgeted targets, meaning a cut to meet the fiscal deficit target by reducing expenditures for people’s welfare.  With the tax revenue collection’s growth indicating to be below the targets, the government has reduced its expenditures directly affecting adversely the people’s livelihood.  The expenditure on agriculture and  rural  development, as percentage of GDP, is reduced from 1.15 per cent to 1.08 per cent;  the total health expenditure has fallen from 0.32 per cent of the GDP to 0.29 per cent;  central expenditure on education has fallen from 0.49 per cent of the GDP to 0.45 per cent;  the gender budget has fallen from 0.68 per cent to 0.65 per cent of GDP;  allocations for welfare of STs is below 1.6 per cent of the total budget and for SCs, it is 2.32 per cent.   This is totally inadequate seen in proportion to the share in population. The allocation for MNREGA has remained unchanged and Rs 4,800 crores are still owed to state governments from 2017-18.

Yet again, the government promises to declare a minimum support price at least one and a half times the production costs. The finance minister misled the country that the government had already declared such an MSP for a majority of Rabi crops.  This has never been seen in implementation across the country.  Similarly, other claims of extended crop loan facility etc are not concretised in budgetary allocations.  The allocation for food subsidy and procurement of crops is grossly inadequate to provide either support to the farmers or commitments under the Food Security Act.  There is no mention of a loan waiver for the farmers groaning under debt burden who continue to be pushed to commit distress suicides.

The middle classes have seen no direct benefit. The employees see a reduction in the earnings on their savings.  Even the so-called relief of Rs 2 per litre of petrol and diesel is offset by increasing the cess from Rs 6 to 8 per litre. 

In sum, this budget is a typical propaganda packaging exercise by this Modi government to hoodwink the people.  This contracts expenditures and disinvests public sector to reduce the fiscal deficit to appease international finance at the expense of imposing greater burdens on the Indian people.

The CPI(M) calls upon all its units to organise popular protests against such an anti-people budget that comes on top of the miseries imposed by demonetisation and the GST.