AN ELECTION BUDGET THAT SERVES THE INTERESTS OF BIG CORPORATIONS

Prime Minister Modi has described this budget as an example of not only ease of doing business, but also ease of living. He claimed that the budget is farmer friendly, common man friendly, business environment friendly and development friendly.

Let us examine the truth of the budget. This is an election budget packaged as propeople while in content it serves the interests of international finance and big corporations. There is no increase in direct taxes to meet governmental expenses, which rely exclusively on indirect taxes. This is a burden on the vast majority of the people. The proportion of direct taxes in gross central taxes comes down from 51.6% to 50.6%. Fiscal discipline has been achieved both by offloading governmental share in public sector entities and by contracting the levels of governmental expenditure as ratio of GDP has come down from 13.2% to 13%.

In addition, as a percentage of GDP, the expenditure on agriculture and rural development has reduced from 1.15% to 1.08%. This nails the lie that this is a farmer oriented budget. Yet again the government has declared an MSP only for the kharif season of one-and-a-half times the cost of production. The cost of production, however, does not include the value of family labour or land rent. Even if such an MSP were to materialise, this will not address the crisis of the debt burden that continues to push more distressed farmers into committing suicides.

Notwithstanding the fanfare of a health insurance scheme, the total health expenditure as a percentage of GDP has fallen from 0.32% to 0.29%. Clearly, the claim of providing ten crore households with a health insurance of ₹5 lakh every year is to be handed over to private insurance corporates.

The contraction of expenditures comes also in education (from 0.49% of GDP to 0.45%) and gender (0.68% to 0.65%). The allocation for welfare of scheduled tribes (1.6% of the total budget) and scheduled castes (2.32%) is inadequate in proportion to their share of the population.

The budgetary allocation for rural employment guarantee remains the same as last year even while nearly ₹5000 crores remains as outstanding wage payments. Even the PM’s mission of Swacch Bharat has seen a reduction of nearly ₹15,000 crores.

The prime minister claims that this is a pro-middle class budget. There is no relief for salaried employees in terms of the tax burden. On the contrary, for crores of employees across the country, their earnings have been further curtailed by reduction of interest rates on their savings. The hype over a Rs 2 reduction in the price of petrol and diesel per litre is yet another gimmick. A new cess has been imposed by this budget which increases the earlier one from ₹6 to ₹8 per litre making this claim a mockery.

In sum, this is yet another exercise in propaganda by claiming to achieve ease of living for the people while actually promoting the ease of enriching the rich.