February 16, 2020

Budget 2020: How BJP Govt Destroyed Economy & Squeezed the People


IN the union budget presented before parliament on February 1, 2020, a vivid and shocking picture of how the Modi led BJP government has destroyed India’s economy emerges. It also reveals exactly how a rich man’s sarkar goes about brutally increasing the burden on people in order to continue handing out concessions to the corporate world and turning the whole country into a source of profit.

Due to neglect, mismanagement and perversion of priorities, the BJP government created a slump in the Indian economy. This has led to a massive dip in the government’s revenue. Gross tax revenue fell by Rs 2.98 lakh crore in a single year, a decline of over 12 per cent over the target kept in budget last year. Revenue from customs and excise duties fell by Rs 30.9 thousand crore and Rs 51.99 thousand crore respectively. That’s a staggering dip of nearly 20 per cent for customs and over 17 per cent for excise duties. The GST collections fell by Rs 51 thousand crore, an 8 per cent decline.
In the face of this devastating slump, and knowing that revenues were sliding relentlessly, the Modi government announced a cut in corporate tax in August last year. Due to this, the revenue from this only major direct tax on corporates fell by Rs 1.56 lakh crore! That’s an unheard of dip of over 20 per cent.

In a shameless attempt to hide these tax revenue declines and balance its books, the BJP government took an even more unprecedented step. It refused to pay the states their share of revenues as statutorily required. This cut amounted to Rs 1.53 lakh crore. This means that states were now bearing the burden of the centre’s policies, including the corporate freebies. With this ‘saving’ the BJP government managed to cover up a chunk of the losses and show in its books a total decline of only Rs 36.74 thousand crore. Meanwhile states were grappling on how to go about fulfilling their responsibilities without this mandated funds.

In such a way, the central government covered up its partisanship towards the corporate section and cocked a thumb at the people and the state governments. It also covered up the devastating effect of the slowdown in the process.

The expenditure budget for last year presented in this budget reveals how the BJP government passed on the whole mess on to the people. Remember: people across the country were already reeling under massive unemployment, price rise, loss of existing jobs, and cuts in income as a result of the slowdown. In such a dire crisis, not only were they expecting a strong move from the BJP government to provide some relief, but increasing government spending would have also been a good way of tackling the crisis. More money spent by the government could have pumped up the buying power in the hands of people, which would in turn increase demand for goods and services, thus pushing up the economy.

But, blinded by the dogmatic belief in neoliberal policies, and ever sensitive to what global capital would like or dislike, the government adopted the very opposite policy. Over the year, it reduced spending on central sector schemes by over Rs 97.6 thousand crore, while funds for centrally sponsored schemes (like MGNREGA, PMGSY, etc) were cut by Rs14.79 thousand crores. In addition, various other central expenditures were cut by Rs 30.58 thousand crores.

The impact of this was that diverse schemes and programmes suffered – work in MGREGA to house building in PMAY, to rural road building (PMGSY) and so on. Directly or indirectly, this squeeze added to the misery and distress of people.

What it showed to people was that the Modi government doesn’t care for them. It is willing to sacrifice them for the benefit of corporate (both domestic and foreign) sections.

For getting a clearer picture of the all round nature of this policy of funds squeeze, take a look at the chart below.

Food subsidy, which ensures that food grain reaches people at affordable prices, was cut by over Rs 75.53 thousand crores. Spending on health went down by Rs 1169 crores. Even spending on agriculture and allied sectors (like fisheries) suffered a squeeze of Rs 30.68 thousand crores. These are cuts that would affect large number of people and on life and death issues.

That the BJP government was willing to do this so that it could fill up corporate pockets is a bitter lesson being learnt by Indians. It’s a great betrayal for those who voted Modi back into power just a few months back. Combined with all the other disastrous decisions recently taken by this government to fan communal flames and encourage strife among people, the BJP government’s record stands tarnished beyond any redemption.