Union Budget, a Gift to Corporate India
THE union budget for 2019-20, presented by Finance Minister, Nirmala Sitharaman in parliament on July 5, fails to live up to the expectations of the vast majority of the people – workers, farmers, agricultural workers, women and the disabled. The first budget of the Modi-2 government is a gift to the corporate India and foreign financial interests who will strengthen their hold on economy. Below we publish the statements issued by various organisations on July 5, on the budget.
ANTI-PEOPLE & ANTI-WORKER: CITU
The budget has turned out to be deceptive assurance for the mass of the people without any substantive provisions and a series of bonanza and giveaways for the corporates in various forms. If the policy-intentions of the government pronounced in the economic survey presented before parliament on July 4 are taken into serious account, the budget proposals are in the same direction to achieve a single goal, to ensure bigger transfer of resources in favour of the rich and corporate, extracting and looting more viciously from the mass of the common populace, the working people in particular, who are actually creating wealth from the country.
When the country’s economy has been seething in continuous slowdown in employment-generating investments in real economy and the overall employment level is at a 45-year low, budget proposals has not bothered to address any of these basic problems in a substantive way except pronouncing funny steps of setting up 80 ‘livelihood business incubators’ and 20 ‘technology business incubators’ to develop skilled entrepreneurs in agro-rural industries, which are actually envisaged to facilitate corporate entry and take-over of agriculture including land rights and destruction of petty production. In fact, the budget remained in a complete denial mode in addressing the agrarian crisis by way of augmenting public investment in agriculture and agricultural infrastructure, easy credit facility to small and marginal farmers and assured earning to agricultural workers.
The basic problem of squeezing size of the domestic markets because of declining consumption level owing to deepening impoverishment of the common people leading to cut in the existing capacity utilisation in industries and services and fanning increasing losses in jobs and livelihood found no attention in the budget exercise at all. The government sought to assuage the people by announcing its target of making India a 5 trillion dollar economy in 2022 just like the prime minister in its previous incarnation announced to double the income of the farmers by 2021, but the situation has gone just in the opposite direction, leading to more crisis and increasing spate of farmers’ suicides.
The budget sought to pretend taxing the rich more by enhancing surcharge on individual income from above Rs 2.5 crore. But that has been more than neutralised and compensated by a sharp reduction in corporate tax to the tune of 10 per cent for almost the entire corporate community by bringing 99.3 per cent corporate entities to the minimum level of corporate tax of 25 per cent (from 35 per cent). This has been done despite the fact that it is this same private corporate community who are responsible for default in bank loans and also for organised pilferage from national exchequer by way of not paying their due taxes like income tax, corporate tax and other taxes, the amount of total default being Rs 7,35,000 crore at the time of previous budget. The budget has not mentioned a single line as to how such legitimate dues in national exchequer can be recovered, rather mentioned a slew of arrangements on simplifying tax procedure including assessment for “ease of living” for the tax payers, more so for the defaulters under their patronage. Side by side burden on people has been increased by increase in tax in petrol/diesel and other indirect taxes.
The budget pretends to give certain concessions in tax and interests in housing loan up to Rs 45 lakh in the name of ensuring so-called “affordable housing”. But this will be more beneficial to the large scale real estate businesses, which are in crisis than to the poor who really need affordable housing.
The budget announced more liberal entry of foreign capital/companies in all the crucial sectors of the national economy including in financial sector. While chanting the slogan of “make in India”, the government has already embarked on the path of destruction of indigenous manufacturing capabilities by way of liberalisation of import in defence production, railway rolling stocks and other crucial areas besides resorting to mass scale outsourcing of production to private agencies including foreign companies starving the concerned PSUs, ordnance factories, railway production units, etc. The budget will further speed up that destructive process.
The budget along with the economic survey has given a clear indication of phasing out the benefits for the micro and small and medium enterprises sector, stated to be for unshackling them to grow bigger; in reality, this is meant for patronising the big business/corporate sectors at their cost, affecting the second biggest source of employment as well as self-employment generation in the organised sector. In its earlier avatar, the Modi government has ruined large number of micro and small enterprises through its disastrous demonetisation and GST implementation.
The budget has shown its clear bias for the finance capital mainly engaged in speculations by way of announcement of a slew of concessions in respect of tax on capital gains, dividend payments etc., to Non Banking Financial Institutions (NBFCs) while announcing its decision to privatise all the NBFCs under public sector who are actually having business in the real, employment generating economy.
The budget targeted for earning Rs 1.05 lakh crore from strategic sale and disinvestment of PSUs –another dubious method of handing over national productive assets on a platter to private business. Along with, the budget has proposed the minimum public holding of shares in companies would be made 35 per cent (from present 25 per cent) making the disinvestment of PSU shares to the tune of minimum 35 per cent a fate accompli.
Budget did not bother to make any provision for increasing the remuneration of more than one crore scheme workers, forgetting all the ‘jumlas’ they have pronounced before the election, neither it has done anything to make the minimum pension at the survival level of Rs 6,000/-(linked with price-index changes) as demanded by the entire trade union movement. In fact almost all social and welfare expenditures including even allocations under MNREGA marked a reduction in the current budget in real terms.
In totality both the economic survey and budget have found only single means to promote growth of the economy as well as employment, i.e., by pushing through labour law reforms to induce total flexibility in implementation of labour laws even after it has been totally diluted through four labour codes meticulously designed for removing all the rights/protection provisions for the workers and also pushing out the majority of the workforce out of the regulatory purview and coverage of most of the labour laws. The government’s obsession for going up to the ladder of “ease of doing business index” led them to completely ignore the issue of “ease of human survival” of the working people who are actually creating the GDP for the entire nation. The budget is an indicator of many more anti-people and anti-worker measures being on the anvil. It is utterly destructive for the national economy and a betrayal to mass of the working people. CITU calls upon the working people to unite and protest against this anti-people budget.
EMPTY RHETORIC FOR FARMERS: AIKS
The budget has nothing concrete for farmers and is merely empty rhetoric, the All India Kisan Sabha (AIKS) has said. It does not address the issue of remunerative prices for farmers’ produce or suggest any steps to free them from indebtedness. Rather, the government adds to the burden of the peasantry by proposing Rs 2 cess on diesel which will increase the cost of production significantly. The government is moving in the direction of greater deregulation. This has led to increasing agricultural costs as opposed to savings in cost of production. A major cause of the crisis in agriculture is the huge increase in prices of inputs that has taken place as a result. With a huge rise in the cost of seeds, fertilisers, diesel and electricity as a result of decontrolling of prices of these inputs and imposition of GST, the government needed to restore price regulation and bring prices of input costs under control. Not only has the finance minister done nothing about it, to add insult to the injury, she has declared that farmers should not buy any inputs and instead practise “zero budget farming”. In an extraordinary drought situation, more was expected in the direction of rural employment generation. The allocation for MGNREGA has been cut by Rs 1,000 crore as compared to the revised estimates for last year.
The allocation for ‘market intervention scheme and price support’ is grossly inadequate for meeting the requirements of procurement. Also, since the government has introduced schemes such as price differential payment the benefit of which goes to traders rather than to farmers, it is not clear how much of the Rs 1,000 crore additional allocation will be used for procurement. This is particularly important in the context that very little increase in MSP has been announced two days ago for Kharif 2019. It also talks of promoting Israeli model in irrigation which is also a vehicle into Indian countryside for Israeli companies like Netafim with dubious records on Palestinian rights.
The budget speech claims that the government will invest widely in agriculture infrastructure, support private entrepreneurship for value addition in farm sector and Pradhan Mantri Matsya Sampada Yojana to address critical infrastructure gap in fisheries sector. In the name of modernisation, the sector would be opened up for corporate fishing companies. While there is talk of promoting dairy sector, the government is also fast-tracking the mega free trade agreement RCEP (Regional Comprehensive Economic Partnership), which will be the death knell for dairy farmers. The mention of starting 10,000 ‘farmer producer organisations’ and support for private entrepreneurship does not talk of peasant cooperatives. There is talk of increased emphasis on contract farming. The move is to facilitate direct procurement by big retailers and promote FDI in all sectors, including retail.
What lies in store for the distressed peasantry in the budget 2019-20 was clear from the tone and tenor of the economic survey, NITI Aayog and the announcement of minimum support prices of Kharif crops a day before the presentation of the budget. It has come as a big disappointment to the peasantry and is tailor-made to boost corporate profits at the expense of the cultivators. According to the economic survey, the inter-ministerial committee to examine issues relating to doubling of farmers’ income (DFI) and recommend strategies, identified seven sources of income to double farmers' income by 2022, namely, improvement in crop productivity; improvement in livestock productivity; resource use efficiency or savings in the cost of production; increase in the cropping intensity; diversification towards high value crops; improvement in real prices received by farmers; and shift from farm to non-farm occupations. No new programme was given to increase the income of farmers from these seven identified sources except listing the initiatives which are already in place.
Lower growth in agriculture and allied sectors has also been noted in the economic survey. It also noted that total food grain production during 2018-19 fell to 283.4 million tonnes from 285 million tonnes in 2017-18. Nothing has been done to turn around the situation. The BJP manifesto in 2014 had stated “agriculture is the engine of India’s economic growth and the largest employer and the BJP commits highest priority to agricultural growth, increase in farmers’ income and rural development.” The economic survey, however, talks of private investment as the key driver of growth. The policy prescriptions are in the direction of withdrawal of state from investment in agriculture and rural development coupled with deregulation and opening up of the economy.
AIKS calls upon all its units to rise up in protest against the betrayal of the peasantry and be vigilant and resist any attempts to promote corporate interests.
DISAPPOINTING BUDGET: AIAWU
The All India Agricultural Workers Union (AIAWU) said it is deeply disappointed with the budget. There has been a low rate of growth of 5.8 per cent in the last quarter. It appears to be sinking lower with investment drying up and exports down. For farmers and agricultural labourers, we should have helped them by making inputs cheaper, outputs at proper rates and MSP at prices using the Swaminathan formula, giving MNREGA increased funds to increase consumption and create the village markets again that were destroyed by demonetisation, but the opposite has been done. Strengthening the budget allocations for health, education, SC/ST sub plans connected with them, decent wages for anganwadi workers, minimum wages to help cope with the inflation that is likely to hit us as oil prices rise if the West Asian crisis hits them, have all received no attention.
FAILS TO ADDRESS WOMEN’S ISSUES: AIDWA
In the budget speech, the finance minister quoted Swami Vivekananda, “there is no chance for the welfare of the world unless the condition of women is improved. It is not possible for a bird to fly on one wing”. She boasts that her government has provided adequate opportunities for women to develop and provide livelihood opportunities. However, this statement of the finance minister is hollow and full of half-truths if it is seen in the context of the current ground realities.
As the post-election Periodic Labour Force Survey 2019-20 confirmed, women’s employment has been at an all-time low and is driven by the agrarian distress within the country. This was reflected in the overall growing job crisis as well as the inability of the government to respond to the drought situation within the country. It is significant that this budget comes at a time when more than 500 million people are battling drought and there is a severe water crisis in all urban and rural centres of the country. Seen in this context, it is obvious that the union budget should have increased public expenditure to boost the rejuvenation of the agrarian sector which has seen a massive displacement of women’s livelihood.
However, this is not to be, as the size of the budget remains at 13.2 per cent of the GDP which has been calculated at the nominal growth of 12 per cent. The allocations for women-oriented schemes have decreased from 0.66 per cent of the GDP in 2018-19 to 0.64 per cent of the GDP in 2019-2020. The allocation for the ministry of women and child development has decreased from 5.1 per cent to 4.9 per cent of the total expenditure between 2018-19 (revised estimate) and 2019-20 (budget estimate). All the purported ‘good intentions’ of the government to benefit women are therefore not backed by its actions.
The scheme for the pension to widows (which falls under the National Social Assistance Programme) has seen a decline in funding, as has the public funding to the Pradhan Mantri Awas Yojana(PMAY). Food subsidy has gone up by approximately 7.1 per cent and this may not be enough to even cover the cost of inflation which is likely to rise after post-budget impact on petrol and diesel prices. There is also an increase for the much touted ‘ujjwala yojana’, but its shortcomings are not addressed.
One of the central features of this budget is the liberalisation of the financial markets which will make women vulnerable to non-banking finance corporations. It is well known that such financial companies charge high interest rates from women and put them in a debt trap. The budget projects women as a fertile market for such companies by stating that one woman in every SHG will be given Mudra loan of Rs 1 lakh (most of which are administered through small banks and NBFCs). But the budget does not say anything about giving interest free loans to SHGs. It also recapitalises public banks to service these NBFCs so that they can give credit to women. In this sense, this budget marks a new stage in the integration of women into financial markets, making them more vulnerable to corporate sharks. It is also significant that a budget that should have helped the rehabilitation of farmers’ families, who are experiencing distress, is actually providing micro-finance companies incentives to exploit women. The slight increases in the National Rural Livelihoods Mission need to be seen in the context as an attempt to boost the demand for credit by women.
Though the government claims that the safety of women is its priority, the allocations for the ‘Nirbhaya Fund’ has decreased and the allocations for the National Mission for Empowerment and Protection of women have decreased by Rs 50 crore.
The expenditure on major initiatives impacting women like the ICDS, midday meal scheme have hardly seen any significant expansion or increases, and the rise in allocation is only likely to meet the increasing cost of implementation. The maternity benefit scheme has seen an increase of Rs 100 crore and most significant rise in health expenditure is on health insurance. The National Scheme for the Education of the Girl Child has in fact only seen a decrease in allocation.
The cutbacks in the first post poll budget show the real character of the new government. It is significant that the government has slashed the rates of corporate taxes, but has not provided any relief to rural women or even middle-class urban women. The projected increase in petrol and diesel prices is likely to further increase the misery of and burden on women. The AIDWA calls upon all democratically minded people to expose this new government and build resistance against its neo-liberal policies.
NEGLECTS ICDS: AIFAWH
The All India Federation of Anganwadi Workers and Helpers expresses anger and disappointment over the callous attitude of the Modi-2 government towards the development of its children, of whom half are malnourished. There is no increase in the budget for ICDS which remains the same-Rs 19,834.27 crore for core ICDS services and Rs 27,584.37 crore for umbrella ICDS. The budget even does not take into account the necessary allocation to implement the increased remuneration of anganwadi workers and helpers. The increased remuneration is yet to be implemented in most of the states due to this.
In view of the tragic death of children in Muzaffarpur in Bihar due to malnutrition and given the poor infrastructure of anganwadis, ICDS should be strengthened to make it a permanent system of full-time anganwadi-cum-creche with increased budget allocation. But the government continues to neglect the interest of the development of our children. In the past few weeks, there was propaganda by the pro-BJP media and social media that the government is increasing the remuneration of anganwadi workers and helpers to Rs 18,000 per month which created some illusion among the workers, it also got exposed now.
AIFAWH call upon the anganwadi workers and helpers of the country to come out in large numbers on the AIFAWH ‘demands day’ on July 10, 2019 focusing the need to strengthen ICDS and register protest against the Modi-2 government's attitude towards poor women and children.
RAW DEAL FOR THE DISABLED: NPRD
The National Platform for the Rights of the Disabled (NPRD) expresses its complete disenchantment with the 2019-20 budget. It is a total let down as far as the disabled community in the country is concerned. It is regrettable that the finance minister, let alone making adequate provisions, did not even contemplate the necessity of even making a reference to the disabled community. The only time she did refer to the disabled was in the context of coins “identifiable” by the visually impaired and the deduction limit for disabled income tax payers. Both of these were done earlier. The finance minister maintained a complete silence on the flagship ‘accessible India’ campaign launched by the earlier version of the Modi government. While in earlier budgets, accessibility of railways was at least talked about, here the FM gave it a complete miss. In the ‘majboot desh ke liye majboot nagrik’ scheme of things, that the finance minister was waxing eloquent, the disabled do not seem to figure at all.
The budget fails to acknowledge the existence of the Rights of Persons with Disabilities Act, 2016. It continues to make provisions under the now repealed PwD Act, 1995. No allocations for the implementation of the various provisions contained in the RPD Act, 2016 are made. Even for the scheme for Implementation for Persons with Disabilities Act, 1995, the increase has been a mere Rs 15 crore. The demand for grants for the Department of Empowerment of Persons with Disabilities shows a marginal increase of Rs 134 crore only. The assistance to disabled persons for purchase/fitting of aids and appliances has seen an increase of a paltry Rs 6.58 crore.
While monthly pension for the disabled continues to remain at a measly Rs 300 for the past several years, the proposal to set up a ‘social stock exchange’ shows yet again the abandonment of the government’s commitment to the welfare of its citizens, especially the marginalised. It is shocking that even the meagre allocations made for research on disability-related technology products and issues has been stopped. Same is the case with in service training and sensitization, employment of physically challenged. Given the lack of commitment, it is no surprise that the National University of Rehabilitation Science & Disability Studies announced in 2015 and the National Institute of Mental Health Rehabilitation promised in 2016 are yet to see the light of the day.
The government seems oblivious of the alarming increase in the number of suicides and mental health issues coming to the fore as also the commitments made under the Mental Health Care Act 2017. This is exposed by its refusal to make any substantial increase in the allocations for mental health programmes and institutes. The announcements made to vigorously pursue privatisation of various public sector undertakings, including the railways, will affect the disabled also. With the government unrelenting on the demand to extend reservations to the private sector, shrinking employment avenues in the government sector will see the bourgeoning in the ranks of the unemployed disabled.
Disability budgeting and disaggregated data on allocations across various ministries for disability has been one of the key demands of the disabled people’s organisations. Unfortunately, this has not been forthcoming. Obviously, inclusiveness and the ease of living that the finance minister talked about does not take into consideration the disabled. The government remains content with bestowing divine status by labelling them ‘divyang’.