February 09, 2020

Union Budget 2020-21: Deceptive and Anti-People

The union budget 2020-21 presented by finance minister Nirmala Sitaraman on January 31 has drawn severe criticism for its anti-people and pro-corporate nature. Several class and mass organisations have called for protest programmes in response to the cut backs on funds to welfare schemes and lack of measures to improve the crumbling economy.

The Centre of Indian Trade Unions (CITU) said that the union budget 2020-21 presented by the BJP government is full of sound but little substance. It said that in the background of continuing slowdown in the economy, widening impoverishment of the people at large, alarming rise of unemployment, the union budget did nothing to address any of these issues except pronouncing ornamental sound-bites.

The CITU said that the claim made in the budget speech about lifting 271 million people above the poverty line is the crudest example of such sound-bites with a deceptive intent. Numerous studies revealed the intensification of the poverty situation in the country including the National Sample Survey Office (NSSO) report on more than eight per cent fall in rural consumption expenditure and that testifies the falsity of such claim.

Commenting on the government claim about ‘Beti bachao and Beti padhao’ and other women-welfare related programmes being run across the country, the CITU said that in reality, women work participation rate has been drastically coming down during last few years consistently. It added that the same period also witnessed increasing incidents of violence and atrocities against women, many times with patronage of those in power. Worst discrimination against working women is continuing subjecting them to 31 per cent less wages compared to their male counterpart for the same work done, the union reminded. The cut down of funds to the ‘beti-bachao, beti padhao’ scheme further by over Rs 20 crore is an exercise of deception, the CITU said.

“There are numerous other examples of such false claims on peoples’ welfare and employment generation in the entire budget speech which do not match with budgetary figures. The budget speech talked loudly about augmenting investment in infrastructure countrywide, but most of the same appear to be dependent on the response of private sectors, which is not expected to be forthcoming in the present scenario of economic slowdown.  For example, 1,37,000 acre potential oil/gas fields were allotted for exploration by private sector entities during the last five years; nothing has been produced yet,” it said in its statement.

It said that a mere Rs 3.43 lakh crore increase in nominal term in total estimated expenditure in the current budget (2020-21) compared to revised estimate of expenditure in the previous budget (2019-2020) also explodes the falsity of such loud announcement on infrastructure and employment generating investment in the budget speech. On account of agriculture and allied services and rural development (which accounts for more than 50 per cent of the country’s population) budgetary allocation has been increased by mere Rs 19,000 crore compared to last budget which is actually a reduction or no increase in real terms, even if inflation is taken into account.

Budget speech made noise about ensuring ‘ease of living’ for individual citizens. But it moved in just the opposite direction, said the CITU. Food subsidy channelised through the Food Corporation of India (FCI) for public distribution system has been cut by Rs 76,000 crore, even when India’s ranking has drastically slid down in the Global Hunger Index. Even welfare schemes like MNREGA, Ayushman Bharat, PMJAY and PM-KISAN suffered drastic cut in allocations.  It spelt nothing about improving the conditions of the working people and did not respond to their basic demands viz., increase in minimum wage, universalising social welfare benefit, equal pay for equal work etc; scheme workers in anganwadi, mid-day-meal, ASHA  etc. The workers are still being subjected to humiliating exploitation having been denied even the statutory minimum wage and social security benefits, the CITU said.

Commenting on the government’s claim to reduce personal income tax rates for the benefit of the workers, the CITU said that the benefit would get more than neutralized by the discontinuance of the rebate they were entitled to arrive at taxable income as per the new scheme. On the other hand the government has become more than liberal in giving concessions to big business and corporate houses by way of sharp reduction in corporate tax, dividend-distribution tax and in the name of simplification of tax regime. While doing so, the Budget speech repeated numerous times the statement of the prime minister that those big business or corporate are the ‘wealth creator’ of the nation. In fact, they are looting the resources created by the producing people in industries, services and agriculture, the CITU said. As per the Receipt Budget presented along with the Budget (2020-21), total accumulated unpaid direct tax from the same corporate community during the last five years has reached Rs 7.63 lakh crore out of which Rs 1.30 lakh crore is not under any dispute.  The CITU slammed the government saying that it talks loud about ‘ease of living’ but in action they are obsessed with ensuring “ease of doing business” of a handful of big business houses, both foreign and domestic.

Coming down heavily on the government’s move of disinvestments in public sector undertakings, the CITU said that it is going to further damage the national economy in a big way. It has decided to disinvest shares of LIC also despite its high performance and consistently huge contribution to the national kitty in funding the development expenditures. It is going ahead with the merger of public sector banks thereby provoking reduction of bank-branches having direct negative impact of the employment and also on banking services to people of remote areas. “Budget mentioned about infusing additional capital in public sector banks; but open-ended provision for loan-defaulting corporates for exit through Insolvency Bankruptcy Procedure (IBC) has already been compelling the public sector banks to forego more than 60 to 70 per cent of their loan portfolios resulting in bigger drainage of resources from the banks than the infusion of capital.

The Modi Govt claims to have special concern to benefit the Medium, Small Micro Enterprises (MSMEs) through the budget and it has announced a number of concessions for the business houses in the name of benefitting the MSMEs. These MSMEs are the worst hit by the economic slowdown besides being virtually crushed by demonetisation and GST and those concessions will benefit them little. Rather the MSMEs need capital at concessional rates and direct support in marketing and timely payment from the big industries for their supplies, where they are suffering most.  Budget provided nothing in this regard.

This BJP government led by Modi has totally ignored the demands of the workers and toiling people, raised only a few days’ back, on January 8, 2020 through a countrywide general strike in which 25 crore toiling people were involved. CITU called upon all sections of workers to continue and intensify their united struggles till their demands are achieved.

The All India Kisan Sabha said that the budget is a document of betrayal to agrarian community and condemned the approach of the government’s towards the peasantry. It called for country-wide protests on February 13 under the All India Kisan Sangharsh Coordination Committee. The AIKS said that under the garb of the budget speech, the Finance Minister went on to make a political speech which was devoid of any information on budgetary allocations. However, a look at the budget document reveals that agriculture and allied activities have seen massive cuts in allocations.

“If one combines allocations for agriculture and allied activities, fertiliser subsidies, irrigation, rural development and land resources, one finds that the Revised Estimates for the current year is almost 25 thousand crores rupees less than what was originally budgeted for this year. The overall allocation for the coming year is less than the allocation for the current year even in nominal terms,” it lamented.

The budget documents show that the Revised Estimate for almost every scheme of the Ministry of Agriculture and Farmers' Welfare has been reduced in the current year, and that these cuts are maintained for the coming year. Another area where a very large cut is seen is in fertiliser subsidies. Even in nominal terms, the allocation towards fertiliser subsidies for the coming year is 11 percent less than the allocations for the current financial year. The real decline is likely to be even higher. Kisan Sabha has maintained that deregulation of the fertiliser sector will spell the death knell for Indian agriculture. Cutting down fertiliser subsidy will directly result in increasing the cost of fertilisers and reduce farmers' income.

Instead of investing to ensure ‘input sovereignty’ of Indian agriculture, the Finance Minister has proposed to achieve this through the Paramparagat Krishi Vikas Yojana which is nothing but a way for the government to wash its hands off from the responsibility of ensuring that farmers receive appropriate agricultural inputs at affordable prices. The budget has no proposals for expanding access to irrigation, providing support to sharecroppers or ensuring livelihood security of rural workers. Rural India is going through a phase of massive unemployment. The budget presented by the Finance Minister has no proposal to deal with this.

In the current financial year, owing to a severe economic stagnation, the government was forced to increase allocations for MGNREGA by about Rs 11,000 crores to meet the huge demand for employment. However, this was partly done by reducing the spending under the PM Gramin Sadak Yojana. For the coming year, allocations for MGNREGA have been reduced again by about Rs 10,000 crores, the AIKS reminded.

Terming the drastic decline in food subsidies as alarming, the AIKS said that the revised estimates for food subsidies show a decline of about 41 per cent over the budgetary allocations. The budgetary allocation for this year is 18650 crore less than the allocation for last year. This decline is entirely on account of the decline in allocations to FCI for lifting the grain for distribution under National Food Security Act. Over the last few years, government has been cutting down the spending on food subsidies, and forcing FCI to borrow to meet the shortfall, with the aim of window-dressing its fiscal deficit numbers. This has, however, resulted in a massive debt burden of over 2 lakh crores on FCI. Food Corporation of India plays a critical role in implementing the National Food Security Act and maintaining food sovereignty of the country. Instead of providing adequate funds to this critical institution, the government is making it economically non-viable.

The AIKS said that the government is trying to force the state governments to enact model laws related to land leasing, agricultural marketing and contract farming. The model law on land leasing aims to open a back-door for grabbing lands of poor farmers by big capitalist farmers and corporations. Contract farming arrangements promoted through the proposed law on contract farming will leave farmers at the mercy of large and multinational food corporations. Introduction of the new model law on agricultural marketing is nothing but a way of deregulation of agricultural marketing. All these proposed laws will force states to dismantle crucial legislative provisions that protect land and livelihoods of poor farmers.

The All India Agricultural Workers Union also said that the budget ignores the concerns and interests of rural workers and socially and economically deprived sections of the society. 

Instead of addressing the systemic economic crisis the finance minister has made policy announcements, which will further lead to financialisation of agriculture and integrate it with agri-businesses. This will lead to the further over-exploitation of the agricultural working class. The lack of concern for generation of rural employment is seen in the overall decrease in budget allocation for MGNREGS by 13.3 percent. Allocation for MNRTEGS was Rs 71,001 crore in the revised budget for the year 2019-20 which has gone down to Rs 61,500 crore in this budget, the AIAWU said. 

All the schemes for the weaker sections including SC, ST, minority and women has not seen any increase in allocations in real terms. The budget for total Central Sponsored Schemes/ Projects for Social Justice and Empowerment has decreased from Rs 1,029.61 to Rs 941 Crore. Allocations for the national fellowship for SC students has seen a decrease from Rs 360 crore in the last budget to Rs 300 crore in this budget. The AIAWU said that the budget is the continuation of the policies of exclusion by the BJP government, which chants the fake slogan of Sabka Sath Sabka Vikas.

Agricultural workers are demanding land for housing sites, subsidized education, and scholarship for students from deprived sections, public health services, more allocation of PDS and work under MNREGA but this budget ignores all these pressing issues related to the lives of rural poor, it said and called upon all its units to hold protests against this budget.

The All India Democratic Women’s Association rejected the budget 2020-21 calling it an anti-women budget and said that it will increase the burden of women, particularly of women from the working class, minorities and other socially vulnerable sections. “The size of the government spending remains at 13.5 percent of the project GDP in the estimates of 2020-2021, a mere 0.3 percent more than the revised estimates of 2019-2020. The proportion of the total gender budget to the GDP has reduced from 0.69 percent of revised estimates for 2019-2020 to 0.63 percent of proposed estimates for 2020-2021,” the women’s association said. 

The AIDWA said that the allocations for the Ministry of Women and Child Development are an abysmal 0.98 percent of the total projected expenditure in 2020-2021. In the wake of increasing violence against women it is also surprising that the funds for women’s safety have hardly seen any substantial increases. It further noted that women specific allocations for women from minorities, scheduled castes and scheduled tribes have increased by a mere 8.2 percent since 2019-2020 and constitutes only 4.3 percent of the total gender budget. 

“This drastic fall in women’s employment is a result of persistent agrarian distress and collapse in non-agricultural work which has been caused by the faulty neo-liberal policy reforms of the government.  The current budget only deepens this crisis by further integrating the agricultural sector with big finance capital and reducing budget for rural employment generating schemes particularly the MGNREGA by 13.3 percent and reducing the gender specific rural employment budget by 10 percent,” AIDWA said.

AIDWA said that the budget makes it clear that the government is not interested in addressing the problems of jobless growth which has characterized the systemic economic crisis that has resulted in a historic low in the worker population ratio among women being i.e., 16.5 percent and pushed 8.52 percent of the women outside the workforce  between 2012 and 2018.

Another important feature of the economic crisis, which has been suppressed by the government, is the fall in household consumption expenditure by about 40 percent between 2012 and 2018, thus reflecting an increase in poverty within the country. The direct impact of this is seen in the fact that India has an abysmal ranking of 102 out of 117 countries in the Global Hunger Index 2019 and a third of its children and women face severe malnutrition. The government has allocated 65000 Crore for addressing the problem of malnutrition, but these allocations are not seen in any substantial increases for the expansion of either the ICDS or Midday meal programme. Further the food subsidy has only gone up by 0.6 percent over the actual expenditures of 2019-2020, and has in fact decreased by about 3.7 percent over amount allocated in the budget estimates of 2019-2020. This will adversely impact the food security of a large section of our population, AIDWA noted.

The Finance Minister has announced policy measures which will lead to the privatization of health care and education. She has introduced FDI into the Higher education and introduced measures where most of the increases in health and education are linked to credit and insurance based schemes. There is hardly any expansion in social infrastructure through public spending as the policy shift makes it clear that the main intent of reforms is to attract private investment in these sectors. This will have a negative impact on the access of women and girl children to affordable and good quality healthcare and education. 

The Finance Minister has introduced tax rebates for the middle class, with a rider that a person availing of this new tax structure will give up all previous income tax exemptions. This means that the actual reduction in taxes will only be very little. Further such tax exemptions will be applicable to less than 2 percent of the population. In contrast, several measures have been announced to provide tax holidays and reductions to the corporate sector, the women’s association pointed out and called upon the people to build resistance against the government.

The All India Federation of Anganwadi Workers and Helpers said that the budget has failed to address the issue of alarming levels of malnutrition in our country. It added that the budget figures presented by the Finance minister do not match her budget speech and many claims on Nutrition, Women and children and anganwadis and ‘Beti Bechao, Beti Padhao’ turned out to be lies.

For the scheme which the Finance Minister boasted about in her speech ‘Beti Bechao, Beti Padhao’, there is a Rs 60 crore decrease in allocation from last year and there has been no increase in maternity benefit scheme – Pradhan Mantri Matru Vandana Yojana since the last budget, the AIFAWH said.

The nominal increase in Anganwadi services is inadequate to cover the revised cost norms with annual cost indexation for Supplementary Nutrition (SN) in the anganwadi centres, which is an additional Rs 4,000cr per year. There is no mention of making mini centres to full centres, no minimum wage or pension for the anganwadi workers and helpers in the budget either, the union said.

“There is only a nominal increase in the National Nutrition Mission (Rs 300cr) which is again quoted by the Minister. This scheme is a digital monitoring mechanism operated through mobile app based reporting. Except for high levels of corruption involved in the purchasing of mobile phones it has not yet served any purpose. In many parts of India where malnutrition is rampant like tribal areas, there is no network and the system turned out to be a non starter,” it said.

There is no increase in the allocation for Mid Day Meal Scheme in the budget and it totally neglected nearly one crore scheme workers like Anganwadi, ASHA and MDM workers, who are the grass root level workers delivering the essential services to the people, the federation said.

This budget does not address the biggest issue the country faces today, that is the high prevalance of malnutrition, stunted and wasted children. This has put India behind countries like Ethiopia and Pakistan in the Global Hunger Index, the AIFAWH lamented. The government has again neglected the demands of the anganwadi workers and helpers for recognition as workers, minimum wages and pension.

AIFAWH said that its members would join the ‘Jail Bharo’ programme on March 6 along with other working women all over the country on the occasion of International Women’s Day against the policies which undermines women’s work and promote violence against women. AIFAWH called upon all the scheme workers to join in large numbers in the movement demanding recognition as workers, minimum wages and pension.

The National Platform for the Rights of the Disabled (NPRD) expressed its complete disenchantment with the 2020-21 budget. “Like last year, this year too, the Finance Minister made just one passing reference to the disabled (divyang) combining them with the elderly. In the “caring India” scheme of things, that the Finance Minister waxed eloquent, the disabled do not figure at all. Omission of flagship programmes of this government like the Accessible India campaign are glaring. Contrary to the claim made in the President’s speech on the opening day of this session that the “Government is working with utmost sensitivity towards fulfilling the hopes and aspirations of the divyangjan”, budgetary provisions exposes its total apathy and insensitivity,” it said in a statement.

The NPRD said that the budget fails to acknowledge the existence of the Rights of Persons with Disabilities Act, 2016. “It (the budget) 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. It is appalling that there has been a reduction in allocations for the ‘Scheme for Implementation for Persons with Disabilities Act’, 1995. The Demand for Grants for the Department of Empowerment of Persons with Disabilities shows a marginal increase of Rs. 225 crores only. Even the ‘Assistance to Disabled Persons for Purchase/Fitting of Aids and Appliances’ has seen an increase of a paltry Rs. 7.5 crores,” it said.

There has been no announcement of enhancing disability pension which continues to remain at a measly Rs. 300/- per month, the NPRD reminded. “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 the National Mental Health programme. In fact, there has been a decrease in allocations to the National Institute of mental Health and Neurosciences, Bengaluru and the Lokpriya Gopinath Bordoli Regional Institute of Mental Health, Tezpur,” it decried.

“The government remains content with bestowing divine status and a label of divyang, even while confining disabled citizens to the margins,” it said and lodged its strong protest against the ‘continuing abject neglect of the disabled community’.