Union Budget 2019: Left Calls It 'post-election Payback Gift To Corporate India And Foreign Interests' In Socialist Critique

Union Budget 2019

Following Union Minister Nirmala Sitharaman's Budget speech, the Left party CPI(M) criticised the Modi government citing the Budget to be a 'payback gift after elections to corporates and foreign financial interests' 

Written By Aishwaria Sonavane | Mumbai | Updated On:

Following Union Minister Nirmala Sitharaman's Budget speech, the Left party CPI(M) criticised the Modi government citing the Budget to be a 'payback gift after elections to corporates and foreign financial interests' 

The party accused the government of presenting a Budget that is full of 'several promises' and 'commitments' that would aid corporates and did not incorporate the needs of farmers.

The press release said, "The Budget and the speech were full of several promises and commitments that would help big corporate capital and the wealthy to strengthen their grip on the Indian economy and foster greater integration of the Indian economy with international financial markets. Nothing, however, was there for India’s working people – kisans and workers – who would be left to fend for themselves in a world of shrinking opportunities for employment and livelihood." 

Sitharaman increased the FDI limit from 49% to 100% and opened the scope of FDI's in various sectors like aviation, media, and animation. 

The Finance Minister in her speech also said that this move by the Government will cover 99.3% of the companies and only 0.7% of companies will remain outside this rate.

"My tax proposals will aim to stimulate growth, incentivise affordable housing, and encourage start-ups by releasing entrepreneurial spirits. It will also be geared towards promoting the digital economy. I aim to simplify tax administration and bring greater transparency. So far as corporate tax is concerned, we continue with a phased
reduction in rates. Currently, the lower rate of 25 % is only applicable to companies having an annual turnover up to 250 Crore. I propose to widen this to include all companies having annual turnover up to 400 crores. This will cover 99.3% of the companies. Now only 0.7% of companies will remain outside this rate," Sitharaman said. 

"There were no references, however, to the issues of remunerative prices and debt relief that India’s farmers are in desperate need of. On labour, the creation of a more anti-labour labor code was also presented as a ‘reform’," the press brief added. 

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CPI(M) accused the Modi government of leaving out on the "economic slowdown, agrarian distress, industrial stagnation, and joblessness." 

It accused the government of giving "several tax concessions to corporate." The Left party further pointed out how despite the Budget being presented by a woman, the expenditure on women has fallen from 5.1% to 4.9% of the total budget. 

It said, "The budget shows very little increase in spending for people. Total subsidies as a percent of total expenditure have remained almost unchanged at about 12 percent. The first Woman Finance Minister of the country had presented a budget in which the expenditure on women has fallen from 5.1 percent to 4.9 percent of the total budget. Even the Nirbhaya Fund for women's safety has not seen hardly any increase."

It criticises the government for showing a 'complete denial' by the government of the 'real economic situation' of the country. 

It said, "The Union Budget for 2019-20 reflects the complete denial by the Government of the real economic situation of the country, which is living proof of the inability of a private capital led development process to either address the agrarian crisis or create employment opportunities outside it. This 2019-20 budget, therefore, is bound to mount further economic burdens on the vast majority of our people."

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Here is the press note: 

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

The first budget of the second Modi Government presented by Nirmala Sitharaman was a payback gift after the elections to corporate India and foreign financial interests. The Budget and the speech were full of several promises and commitments that would help big corporate capital and the wealthy to strengthen their grip on the Indian economy and foster greater integration of the Indian economy with international financial markets. Nothing, however, was there for India’s working people – kisans and workers – who would be left to fend for themselves in a world of shrinking opportunities for employment and livelihood.

The finance minister’s speech listed a long menu of pro-corporate ‘reforms’  - opening up the Indian economy even more to foreign portfolio and direct investment (including the pension sector), creating a ‘financeable’ model for highways, promoting PPP in several areas including railways and metro development, etc. and even commercialization and financialization of social welfare through a ‘Social Stock Exchange’.

There were no references, however, to the issues of remunerative prices and debt relief that India’s farmers are in desperate need of. On labour, the creation of a more anti-labour labour code was also presented as a ‘reform’.

While all of these were talked about, the FM’s speech was generally short of any real details regarding the revenue measures and expenditure commitments of the Union Government for 2019-20 and was completely silent on the problems of economic slowdown, agrarian distress, industrial stagnation and joblessness that everyone knows currently afflict the Indian economy.

As regards the actual Budget, the Finance Minister chose to not disclose the actual figures for revenues and expenditures for 2018-19 even though they are available by now. Instead the revised estimates presented in the Interim Budget on 1 February were retained in the final Budget – obviously in order to conceal the verifiable fact that the actuals of both revenues and expenditures in the previous year were significantly lower than in the Budget Estimates and even the Revised Estimates of the Interim Budget. This manipulation of the Budget accounts only serves to establish that the expenditure commitments for 2019-20 lack credibility as they will be cut if needed to meet fiscal deficit targets.

The estimates of gross revenues from Central taxes for 2019-20 have been reduced relative to the Interim Budget by almost Rs. 91,000 crores, and 40 per cent of this loss will have to be borne by State Governments. The reduction in estimated revenue collections is attributable to reduced projections for GST (by nearly Rs. 98000 crores) and Income Tax (Rs. 51,000 crores) – an indirect admission of the failure of the so-called reform measures of the Government that it had claimed would improve tax compliance.

What is shocking is that instead of addressing the fundamental problems in the taxation system and raising more resources from direct taxes except through extremely piecemeal measures – the Finance Minister has chosen to give several tax concessions to the corporate sector even while burdening the common people with additional excise duties on petrol and diesel to the tune of Rs. 2 per litre. Hitting at the public sector is the Government’s chosen additional route for raising resources. On the one hand disinvestment of public sector enterprises to the tune of Rs. 1.05 lakh crores is being planned. Further, PSEs will be bled by squeezing more of their profits out of them for the Government – and this amount has been raised from Rs. 1.36 lakh crores in the Interim Budget to 1.64 lakh crores in the final one. Even after all of this, the projected figures will keep the expenditure to GDP ratio the same!

The budget shows very little increase in spending for people. Total subsidies as per cent of total expenditure have remained almost unchanged at about 12 per cent. The first Woman Finance Minister of the country had presented a budget in which the expenditure on women has fallen from 5.1 per cent to 4.9 per cent of the total budget. Even the Nirbhaya Fund for women's safety has not seen hardly any increase. There has been a marginal increase in spending on welfare of Scheduled Castes and Scheduled Tribes but this continues to be much less than their share in the population.  Only 2.9 per cent for welfare of Scheduled Castes and 1.9 per cent of total expenditure for welfare of Scheduled Tribes. Decline in allocation for Umbrella Scheme for Scheduled Castes by 2000 crores. Share of allocations for the Ministry of Minority Affairs has remained unchanged. In the context where government's own statistics are showing a massive increase in unemployment, the Finance Minister has cut the allocation for MGNREGA by Rs. 1000 crores as compared to the revised estimates for last year. Spending on even the Swachh Bharat Abhiyan, First Modi Government's flagship programme, has been reduced by about 4500 crores.

The Union Budget for 2019-20 reflects the complete denial by the Government of the real economic situation of the country, which is living proof of the inability of a private capital led development process to either address the agrarian crisis or create employment opportunities outside it. This 2019-20 budget, therefore, is bound to mount further economic burdens on the vast majority of our people.

The CPI(M) calls upon the Indian people to join the protests that are bound to emerge in the coming days against the various aspects of these anti-people proposals in order to force the government to adopt policies aimed at improving people’s livelihood.

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