CPI(M) Polit Bureau has issued the following statement on February 1
THE union budget 2021-22 is a betrayal of the people caught in the double crisis of pandemic and recession. It is a classic illustration of the Modi government’s unshakeable commitment to promoting the interests of a handful of big business houses at the expense of increasing distress and misery for the working people. This is reflected in the refusal of the government to increase public expenditure notwithstanding its bombastic claims. The budgeted central government’s total expenditure of Rs 34.8 lakh crores in 2021-22 is identical in nominal terms to that in 2020-21 – which amounts to slashing expenditure in real terms. This represents the complete abrogation by the government of its responsibility towards the people but shoring up the fortunes of a privileged few including through their greater control over the nation’s productive assets.
The apparent increase of the fiscal deficit to GDP ratio of 9.5 per cent in the year now ending (2020-2021) which government claims because of increased expenditure is primarily on account of revenues collapsing. This collapse happened despite the government’s cynical imposition of a heavy additional tax burden on common people through the sharp increase in taxes on petrol and diesel. Moreover total transfer of resources to states and UTs has gone down in this budget from last year’s revised estimates by more than forty thousand crores. Not only has there been a big shortfall in corporate and income taxes in 2020-21, the government is also keen to acknowledge the ‘distress’ of the corporate sector and the rich by not expecting them to pay in 2021-22 even the taxes they paid in the pre-Covid period. While the budget estimates for corporate tax and income tax in 2020-21 were Rs 6.81 and 6.38 lakh crores respectively, the same figures for 2021-22 are Rs 5.47 and 5.61 lakh crores.
Even the revised estimates of government’s expenditure in 2020-21 of Rs 34.5 lakh crores represents an inflation of the actual expenditure, and till the end of December 2020 only Rs 22.8 lakh crores has actually been spent. The supposed increase of about Rs 4 lakh crores in revised estimates of the central government expenditure difference over the budget estimates is mainly on account of budget provisions flowing from the discontinuation of NSSF loan to FCI for food subsidy and transferring it to the budget. And this budget provision for food subsidies is also destined to be cut by 41 per cent in 2021-22 as compared to 2020-21.
What the finance minister’s speech did not reveal was that under several heads, expenditure in 2020-21 was actually lower than budgeted. These include agriculture, education, social welfare, women and child development, scientific departments, urban development, pensions and disability affairs etc. Not only are these cuts being carried forward into the next year too, even in the few heads of increased expenditure in 2020-21, like health and rural development, the budget proposes to cut down expenditures. Despite the finance minister’s claim that health expenditure is being increased significantly, the budget documents show otherwise. The budget allocation for health for 2021-22 is Rs 74,600 crores which is Rs 8000 crores less than the last year’s revised estimates. It is through such cuts that the finance minister is achieving the cut in total expenditure. This is a gigantic hoax being played on the people!
The panacea for this government is to sell off India’s national assets and privatise even profit making public sector companies. The monetisation project announced in the budget included sale of valuable land held at present by public sector companies. The target is to mobilise Rs 1.75 lakh crores through disinvestment. The increase in FDI in insurance to 74 per cent is highly objectionable. This drive for privatisation is a subversion of the national interests and a mockery of the slogan of atma nirbharta.
The public health crisis created by Covid is far from over and the expenditures on vaccinations will be only one of the additional expenditures that is needed. The economic crisis, the most important aspect of which is the destruction of employment, livelihoods and incomes and the collapse of demand, requires a much bigger additional expenditure. A union budget in such a background which seeks to cut expenditures from even the woefully inadequate levels of the previous year and give concessions to corporates can only be a recipe for disaster. It will lead to greater people’s distress and increase the obscene inequalities which mark India today.
The Polit Bureau calls upon the people to protest against this pro-corporate budget and step up struggles for immediate cash transfers, free food and universal employment guarantee programmes.