People familiar with the current discourse on political economy were expecting a ‘populist budget’ from Finance Minister Arun Jaitley. Keeping in view the assembly polls in five states, they were thinking that compulsions of electoral politics will lead Prime Minister Narendra Modi to declare a budget which would, at least, give some assurance of a better life-situation to the common people. But when the budget papers were out, it was discovered that instead of opting for a so-called populist budget, Modi chose to continue with the old policies. Some took this status quo as ‘pragmatism’ and others considered it to be the result of instructions from the Election Commission of not violating principles of “level playing field” during polls in five assemblies.
But a close look at the budget only reveals an aggressive anti-poor stand of the present dispensation. If one looks around the economic scenario of the country after demonetization, he or she could easily understand that an intractable regime has only ignored the miseries of the common people caused by the loss of livelihood and massive economic dislocation from demonetization. And the government has adopted this stance in a year which is marked by polls in an important state like Uttar Pradesh makes one uneasy. It indicates a future change in the policies after polls are over. The future policies may be hard for poor with less spending on social sectors.
The hard stance of the government is apparent in its handling of social security programs. Handling of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the current budget is one of its examples. “At first glance it would seem as if the Finance Minister’s announcement of an allocation of 48,000 crore for MGNREGA is a dramatic increase of nearly 25 per cent over last year’s allocation of 38,500 crores. In fact, the increase is a mere 1 per cent, of 500 crore, as two supplementary allocations during the course of the year made the total budget of 2016-17, 47,500 crore,” says social activist Aruna Roy.
“For casual workers suffering from the distress of de-monetization, the MGNREGA is intended to provide livelihood security net for exactly such situations. However, with pending liabilities already piling up, the situation is likely to get worse in the next two months as budget releases will only be made in April,” she points out. How the government has ignored different sections of the society hardly hit by demonetization can also be seen in budgetary allocations to sectors like fisheries and handloom.
Budgetary allocations show a decreased funding to handloom sector. However, the funding to textile has increased. There is 35.5 per cent increase in allocation to Textile ministry where as there is 15 per cent decrease in allocation to handloom sector.
Pointing out the reduced allocation to fisheries, NGO Delhi Solidarity Group laments, “It is estimated that some 360 million people live in coastal areas. Though not everyone living in coastal area is dependent on fishing majority of them are dependent on fishing. With massive threat of displacement looming over the inhabitants of coastal regions of India, one would earnestly expect increase in the allocations. What fisher community got in fact is reduction!”
If a poll-year could not restrain the government from implementing demonetization so that lending to industries could be made easy, how can one expect the government to take care of the situation resulting from this disastrous move?
Social activists have pointed out the apathy. “The total spending on agriculture (including Ministry of Agriculture and Farmer’s Welfare, Ministry of Rural Development and Ministry of Water Resources), has seen some increase in absolute terms in this year’s budget, in actual terms, it continues to languish at 0.98 per cent of the GDP – even below the level of 1.07 per cent of the GDP reached during Jaitley’s first budget of 2014-15. And this for a sector, on which more than 50 per cent of the population depend on for their livelihoods. The total spending on all agriculture-related sectors is just
1.65 lakh crore, which is just 30 per cent of the total tax concessions and exemptions given to the rich this year! So much so for it being a pro-farmer budget!” points our Neeraj Jain, a young economist.
“While in absolute terms, there has been some increase in the total social sector spending of the government, which is only to be expected if inflation is to be accounted for, the total social sector expenditure of the government (492,635 crore) as a percentage of the GDP is only a low 2.92 per cent. It is definitely not such a large sum for the budget to be called a pro-poor budget. And it continues to be below the level of 3.23 per cent that was budgeted by the Finance Minister in his first budget of 2014-15, and is also below the level of 3.43 per cent that was estimated in the budget of the UPA Government in 2010-11,” he points out.
Some took this status quo as ‘pragmatism’ and others considered it to be the result of instructions from the Election Commission
Dipankar Bhattacharya, General Secretary of CPIML-Liberation has raised the important issue of amalgamation of railway budget with the general budget and attempt of sabotaging passenger amenities. “In the name of presenting an integrated budget by amalgamating the railway budget with the general budget, the government has further devalued the railways and sabotaged the pressing agenda of passenger amenities and safety and security. The token announcement of a future safety fund and bio-toilets does little to reassure the harassed and overburdened millions of common passengers for whom railway travel is becoming unaffordably expensive and insecure,” he says.
The budget proposals make it clear that the Indian Economy is yet to change its way. “The budget has also refused to address the burning question of growing inequality in India. While Modi waxes eloquent against black money and the corrupt rich, the wealth of the top 1 per cent super rich in India has jumped from 49 per cent of total national wealth in 2014 to 53 per cent in 2015 and 58 per cent in 2016. Instead of introducing wealth and inheritance taxes and ending corporate tax exemptions, Arun Jaitley has granted greater tax concessions to the super rich,” the CPIML leader points out.
But, we should not ignore one important fact that the government has copied policies of UPA in a massive way. The entire social sector programs have been imitated from the earlier regime led by Manmohan Singh. One can wonder what would have happened if these programs were not in place. Though, the imitation has been done in a weak manner, the budget reflects a visible plagiarism of policies.