Defeat BJP to stop Loot & Plunder by Corporates!
KN Umesh
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THE policies and measures adopted by the Modi led BJP government are focussed on facilitating loot and plunder of the nation and intensified exploitation of the workers by the big corporates, domestic and foreign, camouflaged under slogans like ‘Make in India’ and Atmanirbhar Bharat. While the government also claims that these are meant for job creation, the reality is otherwise. The quid pro quo has been exposed by the electoral bond revelations.
PRODUCTIVITY LINKED INCENTIVE (PLI) SCHEME
Along with loan write offs, Insolvency & Bankruptcy code, reduction in corporate tax, disinvestment, and removal of cap on FDI, National Monetisation Pipeline, Production linked Incentive scheme (PLI) is one of the much self acclaimed schemes of the Modi government. Scheme for Promotion of manufacturing Electronics Components & Semiconductors (SPECS) & Remission of Duties or Taxes on Export Product (RoDTEP) under Merchandise exports from India Scheme (MEIS) are, in addition, schemes for the big corporates.
In the guise of Make in India, Atmanirbhar Bharat claims to boost manufacturing sector and job creation. It was claimed that it would localise manufacturing, substitute imports, transform export basket from traditional commodities to high value added products, attract investment in core competency and cutting edge technology, and thus impact MSMEs positively.
Prime Minister Modi said ‘PLI Scheme will boost manufacturing, giving opportunities to youth while making India a preferred investment destination’. Minister for commerce & industry, Piyush Goyal claimed ‘PLI, revolutionising Make in India will help create jobs, promote exports and make India the factory of the world’. Finance minister, Nirmala Sitharaman in her 2019-20 budget said that PLI of Rs 1,97,291crore to the manufacturing sector over five years for the industries in 14 sectors shall strengthen the manufacturing sector in India, raising share in GDP to 25 per cent, create national manufacturing champions and 60 lakh new jobs and additional production worth of 30 lakh crores.
PLI is the scheme of providing incentive of 4 per cent to 20 per cent to firms across the sectors on incremental production in manufacturing over the base year, with the incremental investment. The 14 sectors are Key Starting Materials (KSMs)/Drug Intermediaries (DIs) and Active Pharmaceutical Ingredients (APIs), Large Scale Electronics manufacturing, Manufacturing of Medical Devices under Department of Pharmaceuticals, Electronics /Technology Products, Pharmaceuticals drugs under Department of Pharmaceuticals, Telecom & Networking Products, Food Products, White Goods (AC’s & LED) High-Efficiency Solar PV Modules under Ministry of New & Renewable Energy, Automobile & Auto Components, Advance Chemistry Cell (ACC) Battery, Textile Products: MMF segment and technical textiles, Specialty Steel, Drones and Drone Components. Including 20 per cent foreign multinationals and 176 MSMEs totally 1000 domestic firms owned by big business monopoly houses are approved for incentives. MSMEs as outsource vendors/on-site suppliers of corporates, in turn reduce the cost of component production/purchase cost doubling the PLI benefit to the corporates.
SPECS with Rs 76,000 crores outlay provides financial incentive of 25 per cent on capital expenditure of the company. Tatas, Muregappa Group-CG, Micron, and multinational companies from Japan, Thailand and Taiwan setting up semiconductor plants at Sanand, Gujarat and at Assam are given Rs 59,000 crores. RoDTEP under MEIS provides for reimbursement of taxes/duties paid by the companies.
PLI & ELECTORAL BONDS NEXUS
Some of the companies which are approved applicants/beneficiaries of PLI appear in the list of electoral bonds purchasers. Hetero Drugs Ltd, approved applicant under bulk Pharmaceutical drugs has purchased electoral bonds worth Rs 30 crores. Texport Industries Pvt Ltd under Textiles and Mahindra & Mahindra, Maruti Suzuki, Vedanta, Bharti Airtel, Torrent Power, TVS Motors, Hero Motors, Bajaj Autos, Sun Pharmaceuticals and several others too have purchased electoral bonds and are beneficiaries of PLI too. Not a mere coincidence but a nexus, quid pro quo - “Give Bonds, take PLI”.
Subsidising the cost of capital investment through SPECS, the cost of production by PLI reimbursing taxes & duties paid on exports by RoDTEP are the triple unseen pipelines draining public exchequer to the Corporates. It is nothing but direct funding to private capital. Further if the Corporates become defaulters-rescue & exit avenues of write offs & IBC are at service.
INSOLVENCY AND BANKRUPTCY CODE (IBC)
As per the Annual Report 2022-23 of the Insolvency & Bankruptcy Board of India under the Insolvency and Bankruptcy Code (IBC), during 2016-2023, 4515 out of 6571 corporate insolvency resolution process (CIRP)’s were closed, and liquidation process of 2030 were commenced. The 2030 corporate debtors ending up with orders for liquidation had an aggregate claim of Rs 9.20 lakh crores, while their assets on ground valued only Rs 64,000 crores resulting in loss of Rs 8.56 lakh crores to the creditor public sector banks. Reserve Bank of India report on “Trends & Progress of Banking in India” reveals banks were able to recover 23.8 per cent of its loans. The 12 large accounts against which banks initiated resolution had outstanding claim of Rs 3.45 lakh crores, while their liquidation value was Rs 73,220 crores. Some of these 12 large accounts, like Bhushan Power & Steels and others, have now become approved beneficiaries of PLI. The IBC 2016 does not provide for retrenchment/closure compensation or protection under Industrial disputes Act regarding safeguarding service conditions, completed service and pay for the workers of the firms undergoing the corporate resolution process through NCLT.
PM Modi’s statement “IBC has rescued businessmen from deeper perils, provided them an exit avenue”, denotes the intention. IBC enabled Ease of Doing Business ranking of India to climb 23 notches to reach 77 from 100.
LOAN WRITE OFF
Until March 2023 only 14.07 per cent of Rs. 15.32 lakh crores write offs of the huge debts of corporates since 2014, has been recovered. The corporate tax was reduced from 30 per cent to 22 per cent and further to 15 per cent for some domestic corporates, in 2019. The share of corporate tax in total tax receipts has come down from 34.5 per cent in 2014-15 to 27.2 per cent in 2024-25. The share of customs duty has come down to 6% from 15.1 per cent, while share of income tax has increased to 30.2 per cent from 20.8 per cent.
DISINVESTMENT
The record highest disinvestment of Rs.4, 41,194 crores of public sector undertakings was done during Modi Rule. Through National monetisation pipeline Rs 2,29,000 crores is monetised in just two years 2021-23 by almost privatising i.e., leasing out public assets owned by government like coal mines, roads, power transmission & distribution companies, state road transport corporations, railways, airports, sea ports so on and likelihood of around Rs 1,50,000 crores in FY24 is foreseen. Which is a sale of national assets to the Corporates both foreign & domestic at a throw away price.
JOB CREATION
The jobs in these PLI approved/beneficiaries companies have stood stagnant or decreased. For example, in Wistron (infamous for non adherence to labour statutes and violence at factory), now owned by Tatas, vendor of Foxconn, contract manufacturer for Apple has only 2520 employees. Similar is the case of Samsung, Pegatron, Dixon and other beneficiaries.
Automobile and auto components have laid off 3.5 lakhs since April 2019; Maruti Suzuki reduced its temporary workforce by about 6 per cent. Ashok Leyland, Tata Motors, Eicher, Mahindra & Mahindra, Kia India Pvt ltd, Toyota Kirloskar, Mitsubishi, TVS, Honda, Hero, Suzuki, etc –approved Original Equipment Manufacturers (OEMs) & BOSCH and other approved Auto components manufacturers for PLI have not added to jobs; rather they have pushed the regular employees out of jobs through forced VRS and other means.
The approved beneficiaries of food processing industries like Britannia, HLL, Anmol, Haldirams, ITC foods, MTR foods, Hutsun and others too have not added to the number of employees.
In metals &minerals for specialty steel approved applicants Jindal, Tata, Arcelormittal-Nippon, Bhushan, JSW, Kirloskar Ferrous, Kalyani, LLYOD no increase in employment is visible.
The share of contract workers has increased to 42.5 per cent in 2022 from 13 per cent in 2013 in manufacturing sector of India as per CMIE survey. The India Employment report 2024 released by ILO & Institute for Human Development (IHD) says, “Employment scenario in India is grim. Youth account for 83% of the unemployed workforce & share of youngsters with secondary or higher education in the total unemployed youth has almost doubled from 35.2 per cent in 2000 to 65.7 per cent in 2022”. Then where are the jobs claimed to be created/expected?
But the production is increased through increased productivity norms imposed on the workers and PLI is claimed on incremental increase in production. The PLI received constitute the better portion of incremental investment made by the beneficiary firm year on year.
LOCALISATION & VALUE ADDITION
In mobile manufacturing where exports are claimed, localisation in the components manufacturing like camera module is only 25 per cent, display assembly 25 per cent, mechanics 20 per cent, die cast 15 per cent and connectors 5 per cent. This means that the rest are imported. Value addition of mobile phones is less than 20 per cent and in Apple Inc it is hardly 12 to 15 per cent.
ENHANCING EXPORTS & IMPORTS SUBSTITUTION
The recent WTO’S Global Trade Outlook and Statistics report says India accounts for 1.8 per cent of global exports of goods. In 2023, export of goods has contracted by 4.71 per cent. Global Trade Research Initiative (GTRI) says Indian exports & imports have dipped by 2.6 per cent in 2023 compared to 2022. The 16.9 per cent share of goods exports in India’s GDP in FY14 has declined to 13.3 per cent in FY23, and is further expected to decline to 11.4 per cent in FY24.
SHARE IN GDP
The 17 per cent share of manufacturing sector to GDP in 2010, declined to 15 per cent in 2014 and to 13 per cent in 2022.
Thus, there are no jobs created, no import substitution, no transformation in export basket, and no investment in core competency & cutting edge technology. Only money flowed from national exchequer to private corporates to boost their profit.
It is clear that the Modi led BJP government is using its control over the State to transfer public money to the big Corporates and receiving corporate funds to keep itself in power. This is nothing but anti national. Make in India, Atmanirbhar Bharat and job creation are just ‘jumlas’ to deceive the people, particularly the young who are desperately looking for jobs.This cannot be allowed to continue
Contrary to the ‘Na khaonga, Na khane doonga’ claim of Modi, a decade of Modi Raj has deepened the regime of loot and plunder of public funds. In addition to corporate loot, the Modi government has been promoting the divisive and Manuvadi ideology of the RSS to disrupt class unity and weaken class struggles against these disastrous policies. This corporate communal nexus in governance is against the interests of the workers and the people of our country.
Vote to Defeat the BJP and its allies to free the country from the regime that guarantees loot and plunder by the corporates and divisive politics of RSS.
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