Window Dressing on Issues Raised in Elections; Continuing Bonanza for Corporate and Elite: Says CPI (ML) New Democracy On Union Budget

Union Finance Minister (FM) presented the full Budget for the year 2024-’25 today on 23rd July (The interim budget was presented before elections). In this Budget too, the economic policy of Modi Govt. has been pursued. However, there has been some window dressing on the issues which dominated the just concluded elections wherein BJP was reduced to a minority amidst growing anger, especially of peasants and rural poor. That this time Modi Govt. is dependent on allies, especially TDP and JD (U) was also reflected in the Union Budget. However, all this has been within the framework of the pro-corporate economic policies of the Modi Govt. blending it with Hindutva under the slogan “Vikas bhi, Virasat bhi” hoodwinking the people with the first and distorting the history and traditions with the second. Incorporating the changes mentioned above this Budget largely followed the Interim Budget, increasing expenditure by nearly 1 percent. Concern for the Poor, Women, Youth and Farmers has been mentioned in the Interim Budget only to be brushed under the carpet.

Union Govt. has been boasting of robust economic growth but due to data fudging and doctored figures, the claim is dubious while India continues to be among the poor countries going by the per capita GDP. Further, this has to be viewed against the backdrop of growing inequality, a rising number of billionaires and growing poverty, destitution and unemployment. GDP growth is calculated (estimated to be 7.5%) adjusting nominal growth to the core (non-food, non-fuel) inflation which is 3.1%, obviously much lower than the actual inflation with rising prices of food and high prices of fuel taken out of the calculation. This growth is a jobless growth with corporate and very rich sections being the only beneficiaries.

Despite loud but largely hollow claims of a growing economy, Govt. cannot hide the abysmal conditions of the people and the crisis-ridden nature of the economy. More than 27% of the Govt. receipts are accounted for by the borrowings and nearly a quarter of Govt. expenditure goes into interest payment. As the Economic Survey has noted the corporations are swimming in profits but private investments are falling. This apparently paradoxical situation shows the character of the ruling classes and their subservience to imperialism. In fact Govt. is soliciting capital from imperialist countries while making available public money (state funds) to the corporate. This exposes the myth of sustainable growth.

The Finance Minister has announced a reduction in corporate tax for foreign firms from 40% to 35% and announced that rules governing FDI will be simplified. Govt. has announced the withdrawal of the Angel tax which was levied since 2012 on firms in which foreign investment exceeded real market value. All these measures coupled with a drive to implement four Labour Codes, invite capital from imperialist countries, hoping they would choose India as its destination with intensifying contradictions with China.

To attract foreign investment and serve the corporation, Govt. has used GST collections which increased by nearly 13%, to reduce fiscal deficit rather than invest it in increasing production or giving relief to suffering people.

While public money has always been given to corporations, the Modi Govt. has taken it further by including this money in the capital expenditure of the Govt. It means that big capitalists will be extracting profits directly from the state investments. This situation brings to the fore the comprador and bureaucratic character of the Indian corporations (big capitalists). The Finance Minister has allowed the CSR funds to be used for paying their apprentices who will work in their firms thereby exonerating them from any responsibility to society.

Over the past years, the big emphasis is on Govt. expenditure on infrastructure. This is mostly done in PPP mode thereby enabling corporate and big construction firms to earn exorbitant and guaranteed profit from the Govt. expenditure. This one-sided emphasis neglecting industries and agriculture is not viable while the govt. waits for FDI. In this sector, most of the jobs are contractual, low and without any safety provisions.

There is an attempt at window-dressing on the concerns of the people which came to fore in recent periods. There is no attention to the agrarian distress, Govt. claiming that it is already giving proper MSP brushing aside the demand of the peasantry for MSP at C2+50% according to the Swaminathan Committee recommendation. There is no redress of the growing indebtedness of the peasantry, no attempt to address the deepening crisis in agriculture. There is hardly any increase in the allocation for agriculture and allied activities. There is no increase in MNREGS allocation in fact it is less than the money spent last year. This expenditure has depended on the rural crisis and anger of the rural poor. On the other hand, FM announced that land acquisition will be made easier showing the intent of the Govt. This is bound to lead to further attacks on the people and environment. The cut in fertilizer subsidy is to increase the burdens of the farmers and give a push to organic farming with possible exports of this produce to the imperialist countries.

FM tried to make addressing the problems of unemployment as the main point of this Budget. According to the Economic Survey, 78.5 lakh jobs are to be created every year to absorb new entrants to the labour force. But the Govt. has played a hoax with this one of the most pressing problems of the Indian people. In one of the schemes, Govt. will pay one month’s salary to the new entrant into a formal sector job in three instalments subject to a maximum of Rs. 15000 and a minimum of one year of job. Govt. gets elected for five years but the youth will get only a month salary from Govt. and job for one year! Further Govt. will subsidize owners with regard to Provident Fund, who offer employment. Govt. will pay first two years of contributions to the EPFO which amount to roughly 72 thousand. The whole emphasis is on formalization so that Govt. could claim reduction in unemployment on this basis. Change in income tax rates applicable to employees is also marginal.

FM announced that one crore apprentices will be employed in 500 big companies over next five years. They will be paid Rs. 5000 per month as stipend, not even the minimum wage. This is nothing but extremely cheap labour made available to corporations while allowing them to pay them from CSR funds. These so-called apprentices will put pressure on regular jobs in the corporate sector with no requirement of absorption into job of apprentices by the concerned company. FM talked of unemployed youth but served the corporations.

FM made a lot of noise about helping MSMEs but all that was offered is more of credit. The Govt. is either incapable of or more likely, unwilling to recognize the real reason behind the crisis in this sector, the provider of the biggest employment in the industrial sector. MSMEs need to be protected from corporate, especially with regard to markets.

RSS-BJP Govt. had undermined the fiscal powers of the state through GST. Allocations to states are decided by the Centre and this allocation has been going down. Financial benefits are hung as dangles for the state govts. In this Budget, there has been greater allocation to AP and Bihar as BJP govt. at the Centre is dependent on the parties ruling in these states. 15000 crore Rs. have been allocated to AP for the capital and more to come while Bihar has been promised highways, airports, and medical colleges. It is not the question of these allocations but that these are bandied not as a right but as a favour. Purvodya i.e. development of eastern states will be largely limited to NDA-ruled states, and mostly related to infrastructure.

While allocation to education, health and social sectors was largely retained at the level of the Interim budget, there were no measures to tackle the increase in prices of essential commodities. No measures were taken to bring down the high prices of food and fuel. Govt. has been stubbornly rejecting demands to reduce tax on petrol or diesel at least to the level of the highest slab of GST which would bring their prices down considerably and would have much positive effect on economic activities in general.

Union Budget for 2024-25 is devoid of any concern for the people, rather it increases the burden on them. It is a continuation of the attack by the RSS-BJP Govt. against toilers- workers and peasants. CPI (ML)-New Democracy totally rejects these Budget proposals. CPI (ML)-New Democracy calls upon all ranks to mobilize the people against this anti-people Budget and organize protests.