The Union Finance Minister (FM) has presented the first Budget of the NDA Govt for the year 2024-’25 on 23rd July.
It is clear from this Budget that the NDA Govt is going to fully continue the anti worker pro corporate policy of the earlier two BJP Modi Govts.
While working class of India is burdened by price rise, impermanent low paying jobs and unemployment, the Budget has offered direct tax reliefs and all sorts of support to corporate, that too in the name tackling unemployment!
The pro-Corporate economic policies of Modi Govt.are mixed with communally divisive policies under the slogan “Vikas bhi, Virasat bhi” to divide the people and working class in a bid to diffuse struggles.
While workers, peasants and all common people reel under price rise, while all figures show that inequality in the country has deepened abysmally, the GDP growth is calculated (estimated to be 7.5%) adjusting nominal growth to non-food, non-fuel inflation. This obviously does not take into account the rising prices of food and high prices of fuel. This figure itself sets out how the Budget is a cruel joke against the people. Food inflation is around 9% and that is also the unemployment rate despite the attempt to fudge figures.
The Budget has announced reduction in corporate tax for foreign firms from 40% to 35%. Rules governing FDI will be simplified. Angel tax which was levied since 2012 on ” start ups” has been withdrawn. This shows clearly the red carpet the Central Govt wants to spread to invite imperialist capital. All this is coupled with the NDA Govt’s first announcement after taking over office of implementing the anti worker 4 Labour Codes within 100 days,i.e. by Sept 2024 end. Those Codes comply with many demands of Corporate to facilitate further exploitation of India’s workers.
*Due to Pro Corporate Policies* between 2014 to 2024 tax revenue from corporate tax increased from Rs.4.28 lakh crore to Rs.10.2 lakh crore, but tax revenue from income taxes increased from Rs.2.5 lakh crore to Rs.11.8 lakh crore thereby surpassing corporate tax revenue!
The percentage of Gross tax revenue ( GTR) of corporate tax decreased in same period from 34.5% to 26.6% while as a percentage of GTR, revenue from income tax has increased from 20.8% to 30.9%.
The concession in corporate tax in 2019 was supposed to have led to more investment and more jobs but have only led to loss of revenue. No jobs were created. Now further decrease in corporate tax is being done!
RATHER….
Further aid by public funds for Corporate is hidden in the big announcement aimed to lure youth- 1 crore youth between the ages of 21 years to 24 years will be placed as apprentices for one year in next 5 years in 500 big companies. They will be paid Rs 5000 per month and Rs 6000 one time cash. The companies will ” pay for the training” and 10% of this wage through CSR funds.
What a bonanza for Corporate! Who does not know that in MNCs and companies of big business houses, apprentices are ‘trained’ by making them work shoulder to shoulder with the rest of workforce or pushed into menial jobs? And workers for one year on a paltry wage lower than the minimum wage in any state of tbe country; that too paid by public funds and the CSR funds which are meant to be spent on community welfare.
It must not be forgotten that the Apprentice Act was diluted in the Modi Govt’s first tenure and no company is obliged to offer employment after the assigned period is over. There is no thought for the young workers- jobless and on the streets in their early twenties with just an “internship” certificate. Skill India yields the same but at least does not supply free workers. It is clear this is a scheme to supply at public cost one crore young workers to 500 big business houses for exploitation as modern “slaves”.
Over past years, there is emphasis on Govt. expenditure on infrastructure mostly in PPP mode. This enables corporate and big construction firms to earn massive guaranteed profit from Govt. expenditure. In this sector most of the jobs are contractual, low paid and without any safety provisions.
*ELI Schemes:*
The Finance minister has presented 3 ELI ( Employment linked Incentive) schemes all related to the EPFO, claiming that this is the Govt’s push to create jobs. The incentives are actually to the employers and to EPFO. The schemes are only for two years. The schemes are for first time employees in formal jobs, workers in manufacturing and additional job creations. In one of the schemes which is for first timers in formal sector, Govt. will pay one month salary to the new entrant into formal sector job in three instalments subject to a maximum of Rs. 15000 and minimum of one year of job. The salary eligibility is upto one lakh a month. The subsidy will be refunded by the employer if the job ends in the first year. The second scheme is for first time jobs in manufacturing sector. In this the Govt. will subsidize owners who have been registered with EPFO for 3 years and who employ a new worker with incentives to the tune of 8- 24% to both employee and employer for 4 years via EPF payments . In the third scheme which is applicable to all sectors, Govt. will pay Rs 3000 per month for two years towards contributions to the EPFO for every new worker drawing salary of upto one lakh a month. More details will be known when the schemes get notified.
Clearly one attempt is formalization, so that the Govt.can claim reduction in unemployment on this basis. For this funding is being offered to employers from public funds of the burden they will face if they cut PF of the workers.
Second and very important, a good part of the massive corpus of EPFO funds are now invested in share market. So, the Union Govt’s will now transfer tax payer money to this channel.
The Govt has claimed big relief for permanent employees of Govt sector, PSUs and big companies in income tax. But the cut off remains at 3 lakhs per annum and the change in income tax rates applicable to employees by making some slabs is also marginal.
MSMEs are the biggest provider of employment in industrial sector and are in deep crisis after the three big blows of GST, demonetization and lockdowns. They need to be protected from corporate, especially with regard to markets. But all that the Budget has done is to offer them bigger loans! Is this the way to tackle unemployment?83% of youth is unemployed, 12m jobs are needed every year but nothing has been envisaged to tackle this huge unemployment.
The Railways are the lifeline for the huge migrant polpulation travelling for livelihood. No announcement has been made of bettering maintanence, increasing trains on such routes, ensuring safe travel or better facilities etc.
Allocation to Education, Health and Social sectors hover where they were. No measures to tackle increase in prices of essential commodities or to bring down high prices of food and fuel has been announced.
There is nothing in this Budget for workers except recipes for more exploitation at the hands of Corporate and continuing burdens. For peasants, for common people too, the burdens are unaddressed or increased.
IFTU National Committee calls upon the working class to mobilize against this pro Corporate anti worker Budget. Intensify struggle to demand Repeal of Four Labour Codes. Build struggles in states to force state Govts against formulating Rules to implement the Codes and pressurize State Govts led by Opposition ruling class parties to demand Repeal of 4 Labour Codes.
IFTU NC also calls on the working class to demand withdrawal of the proposal to provide tax payer funded one crore workers to 500 Corporate companies over next five years. This is henious misuse of public funds. It is also an all out attack on the right to minimum wage- all “apprentices” are actually doing full work in big companies even now.
*We call on all IFTU units to oppose the pro Corporate Budget and also build united protests*