The Modi Government’s first Union Budget has continued and severely intensified the offensive on common people and benefits to corporations that marked the previous UPA-II regime. The Budget has opened the floodgates of disinvestment of PSUs to the tune of 43000 cr, with FDI being increased to 49% in defence, insurance and e-commerce.The Budget is remarkably silent on MNREGA and Food Security that directly affect the poorest sections, also on concrete measures to quell inflation, such as taking essential items off the list of commodities that can be traded in the futures and forward trading market. The Finance Minister, on being asked, said that the existing allocation for MNREGA will stand. Allocations for MNREGA have not been increased for years, in spite of steep inflation, and the Modi Government has continued with the same policy.
Total social sector expenditure has plummeted steeply from 10.8 % in 2013-14 to 4.42 % of the total budget in 2014-15, and from 26.7 % in 2013-14 to 16.7 % in 2014-15 of total planned expenditure.
The huge infrastructure outlay in railways, roads, and ports has been allocated in the PPP framework. Experience has shown that PPP has been a system which has involved huge corruption, and which has meant private profits at public cost. In this case, the huge outlay will prove a bonanza for the real estate sharks who will use the PPP model to milk profits.
The allocation for schooling and higher education is highly inadequate and reflects the Modi Government’s lack of any concern for the country’s youth. The Budget allocates a mere 500 cr for 5 new IITs – contrast this with the 200 cr allocation for a single statue of Sardar Patel, a pet project of Modi’s Gujarat Government that the Centre has now adopted! The Budget indicates that education will be left to predatory mercies of privatisation, which will put it out of reach of the vast majority of students in the country.When it comes to employment too, the Budget fails to recognise the vast army of para teachers, ASHA, anganwadi and other rural health and education workers as government employees. The Modi Government continues with the model of insecure, casualised employment that exploits youth and women and also affects the quality of education and health services. Similarly, the Budget allocates a mere 500 cr for 5 new AIIMS like medical institutions in 5 states. Again, this amount can be put in perspective by contrasting it with the 200 cr allocation for a single statue. Some of the Budgetary decisions have immediate benefits to specific corporations.
FDI in e-commerce has also been introduced; this in spite of an earlier white paper by the Department of Industrial Policy & Promotion (DIPP) stating that FDI in E-commerce would go against the spirit of restrictions imposed on FDI in multi-brand retail. BJP’s posture has been one of opposition to FDI in multi-brand retail, yet it is allowing it in by the back door with FDI in e-commerce. Modi’s team is known to have close connections with the e-commerce giant, eBay CEO Pierre Omidyar, with BJP MP Jayant Sinha having earlier served as head of the Omidyar Network in India. The Finance Minister has also virtually put a hold on the restrospective taxation legislation that was enacted after the Supreme Court’s ruling in favour of Vodafone in 2012. This legislation allowed for retrospective taxation of overseas transactions which involve assets primarily in India. Now, the Finance Minister has set up a high-powered committee to vet each case before invoking this law. It may be remembered that the Finance Minister Union Finance Minister Arun Jaitley recently recused himself from matters pertaining to the Rs. 20,000 crore Vodafone tax dispute and delegated decisions in this matter to his junior Minister Nirmala Sitharaman. It may be presumed that he recused himself because of a conflict of interest emerging from possible prior association with the corporation in his capacity as a lawyer. Surely a conflict of interest is also indicated if the retrospective taxation legislation that directly pertains to the Vodafone case and similar matters, is weakened by the present Finance Minister?
The Budget extends the 10-year tax holiday to power companies.The Finance Minister has also indicates that ‘hurdles’ in the path of mining will be removed and mining will receive a boost. Those hurdles, of course, have been the adivasis fighting for their survival and their rights to forests and land. The need of the hour was the nationalization of mining, to end the open plunder of our precious mineral resources by corporations and MNCs, resulting in huge corruption. Instead the Budget Speech indicates that hurdles in the path of this plunder will further be removed.The Economic Survey also indicates a shift to a regime of cash transfers and erosion and undermining of the MNREGA.All in all, the Modi Government’s first Budget is openly pro-corporate and anti-poor in its orientation, and does nothing to alleviate price rise and usher in the relief promised to the people by Modi’s election campaign.
– Central Committee, CPI(ML)