The Budget placed by the Finance Minister in Parliament today is grossly inadequate in meeting the challenges of economic recession, growing job losses and declining purchasing power of the masses. The total expenditure is slated to increase by a mere 2% of GDP only, essentially to meet non-developmental expenditures like interest payments and implementing sixth pay commission recommendations. Therefore, this Budget neither provides a stimulus for growth nor meets the needs of "inclusive growth" for the aam admi.
While the Government has failed to provide the resources required to stimulate the economy the neglect of its role in terms of allocations is more significant in areas that touch on the lives of the mass of the people. Crucial sectors, like agriculture and rural development, where the effects of the prolonged agrarian crisis and the agricultural growth slowdown of 2008-09 have been severe, have been provided little support in terms of Plan outlays. The required lowering of interest rates to 4% on farm loans has not been done and instead only an incentive to repay loans on time has been announced.
The allocation required to implement the Right to Education is shockingly absent in the Budget. The increase in budgetary allocation for elementary education is less than Rs.200 crore. The non-seriousness of the Government for the universalisation the ICDS is seen in the meagre increase in allocation of only Rs. 360 crore. The allocation for the social security schemes for the unorganised sector workers is only Rs. 100 crore more than last year, belying the claims made by the Finance Minister. While the increase in minimum wage for the NREGA to Rs. 100 is welcome for the States where the wage rate is lower, a meaningful expansion of NREGA would have required a much larger allocation than the Rs. 2350 crore increase over what was spent in 2008-09. Similarly, the Rural Health Mission has been allocated only Rs. 1730 more than what was spent last year. It is unfortunate that the Finance Minister has given his stamp of approval to an increase in the price of foodgrains by Re. 1 per kg for Antodaya families and a cut in the allocation of food quotas by 10 kg to BPL families in the name of the Food Security legislation. None of the promises made to women including the widow pension scheme has received increased allocations.
The series of direct and indirect tax concessions in the wake of the global economic crisis has led to the tax revenue forgone reach as much as Rs. 4.18 lakh crore in 2008-09. Rather than withdrawing these concessions to enable greater resource mobilisation and spending in critical areas, the Finance Minister has chosen to extend these concessions for the entire financial year of 2009-10. The abolition of the Fringe Benefit Tax and Commodities Transaction Tax will also adversely impact tax mobilisation. Despite the welcome increase in the Minimum Alternative Tax levied on corporates from 10% to 15% of their profits, the Budget is revenue neutral on the direct tax front and direct tax revenues are expected to increase by 7% only, which is much less than the nominal growth of GDP.
The Government expects to garner Rs. 35000 crore from the sale of 3G telecom spectrum, confirming the massive scam in the allocation of 2G spectrum during last UPA Government, which led to a loss of Rs. 60000 crore to the exchequer.
The Budget far from meeting the requirements of the people will further widen the gap between the haves and the have-nots. The CPI (M) calls upon the people to be prepared for struggles to protect and improve their livelihoods.
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