Politics

Opposition Parties Call Budget 2018 a ‘Big Jumla’ and ‘an Assault’ on India’s Working Class

According to the opposition, the budget is mere ‘lip-service paid in the name of the farmers and the poor’ and will not have any real impact.

The Congress said that finance minister Arun Jaitley “failed the fiscal consolidation test”. Credit: PTI

New Delhi: While many touted the Narendra Modi government’s unprecedented thrust on agriculture and healthcare in the current budget as populist measures, ahead of eight assembly elections this year and parliamentary polls early next year, the opposition parties panned the finance minister’s proposals.

Most claimed that the outlay in the two sectors is far from adequate to address the persistent concerns of the rural poor, who have been reeling under distress because of multiple factors.

The opposition was of the view that although the government may believe that its sudden emphasis on the rural sector may help the BJP politically, the poor allocations in several central programmes will not have any real impact as far as generating jobs and rejuvenating the economy are concerned.

‘A big jumla

“In the last four years, the level of real agricultural gross domestic product (GDP) and real agricultural revenues have remained constant,” said former union finance minister P. Chidambaram.

He added, “Jobs is the number one issue. Jobs are not being created. Industry – especially MSMEs – create jobs. Industrial gross value added (GVA) growth has declined from 9.8% in 2015-16 to 6.8% in 2016-17 to 2.7% in 2017-18. In the same period, manufacturing GVA has declined from 12.7% to 7.9% and credit to industry 2.1%.”

“In light of the above, the budget proposals should have been bold and radical, and backed by adequate provision of funds. Unfortunately, the budget proposals are a big let down,” he said.

In a press statement, the Congress listed what it called a “list of big disappointments”.

Regarding fiscal deficit, it said, the finance minister “failed the fiscal consolidation test. All deficits have crossed the budget estimates. Against a BE fiscal deficit target for 2017-18 of 3.2, the fiscal number will be 3.5. Similarly, for 2018-19, against a target of 3.0, the finance minister has pegged it at 3.2. Both these slippages will have serious consequences and raise grave doubts about India’s commitment to fiscal consolidation”.


Also read: Budget 2018-2019 As It Happened


It further said that the government has not taken any measures to boost exports and has imposed “additional custom duties to restrict imports”. It added that the prime minister’s speech at Davos (where World Economic Forum was held recently) has already been forgotten.

As far as the government’s promise to increase minimum support price for farmers by 1.5 times the inputs, the party said that there are no details as to how it would do that.

“The Swaminathan Committee has been remembered in the last year of the government’s tenure. Besides Rs 2,000 crore for e-markets and Rs 500 crore for Operation Green (whenever the cabinet will approve the schemes) amount to pittance. There is nothing to indicate that farmers’ real income will rise.”

The party also took a dig at the big government announcement of providing Rs 5 lakh to 10 crore families for healthcare, calling it a “big jumla”.

“Assuming that each family will avail of Rs 50,000 (one-tenth of Rs 5 lakh), the amount required per year will be Rs 5 lakh crore! If the insurance companies will foot the bill, the premium at Rs 5000-15000 per family will require an outgo of Rs 50,000-1,50,000 crore per year. Is the finance minister serious?” it asked.

The grand old party said that the only way the finance minister has environed to increase jobs is the Mudra scheme but if the average size of the Mudra loan is measured, it amounts to only Rs 43,000, an amount which can barely generate more jobs.

It said that the finance minister appears to have given up on private investment completely as there was nothing in the budget to boost private investment or encourage banks to lend or investors to borrow.

Chidambaram said that the budget is a clear dampener for taxpayers, and will impact the middle classes. “Only corporates with income up to Rs 25 crore get a tax relief of 5%. For individuals, standard deduction is back, but long-term capital gains tax is also back. For the middle class earner and saver, one cancels the other. Actually, by way of LTCG and 4% cess, the taxpayers will pay the government Rs 31,000 crore more whereas the gain through standard deduction will be only Rs 8,000 crore.”

Finally, the leader said that social sector schemes like MGNREGA, Pradhan Mantri Awas Yojana, National Drinking Water Mission, Swacch Bharat Mission, National Health Mission, interest subsidy for short term farm credit etc, saw substantial cut in outlays.

‘An attack on people’s livelihood’

The biggest Left party, the Communist Party of India (Marxist) said that the budget reflects that the government was committed to “serve the interests of foreign and domestic big corporates while mounting further assaults on the vast majority of the working people of our country”.

The budget does not seek to mobilise revenues by increasing direct taxes applicable to the rich, in spite of the fact that the top 1% of the Indian population garnered 73% of the additional wealth generated in 2017. On the contrary, governmental expenditures increasingly rely on indirect taxes which are a burden on the common people. In fact, the proportion of the direct taxes in gross central taxes budgeted to come down from 51.6% to 50.6%,” a statement released by the politbureau of the party said.

It said that although the budget is being presented a pro-poor because of its emphasis on agriculture, rural development and healthcare, most of the schemes dealing with these sectors have received very poor allocations.

“The health care scheme is a mere repackaging of the existing one and no additional allocations have been budgeted. It is clear that this scheme will also be used to give handouts to insurance companies. Experiences have shown that health or crop insurance schemes have resulted in a profit bonanza for corporates rather than benefits to the people.”

The party said that if the total budget estimates are calculated, “the government expenditure to GDP has now reduced further from 13.2% to 13%”.


Also read: The Budget Fails to Grasp India’s Problem is Weak Aggregate Demand


“This is a contractionary budget. This means that there will be further reduction of employment opportunities and social welfare expenditures… The expenditure on agriculture and rural development, as percentage of GDP, is reduced from 1.15% to 1.08%; the total health expenditure has fallen from 0.32% of the GDP to 0.29%; Central expenditure on education has fallen from 0.49% of the GDP to 0.45%; the gender budget has fallen from 0.68% to 0.65% of GDP; allocations for welfare of STs is below 1.6% of the total budget and for SCs, it is 2.32%. This is totally inadequate seen in proportion to the share in population. The allocation for MNREGA has remained unchanged and Rs. 4,800 crores are still owed to state governments from 2017-18,” said the Leftist party.

It said that since the government was unable to meet the fiscal target, it further reduced its social expenditure as a precautionary measure. It said that all the expenditure on central social schemes last year were below the budgeted targets as a result, adversely affecting people’s livelihood. It said the government has pursued the same policy even this year.

It accused the finance minister of misling the people by saying that it has declared the MSP for rabi crops last year as no such thing was implemented. It added that schemes like extended crop loan facility were never realised because the government did not allocate sums for it despite the announcement.

“The allocation for food subsidy and procurement of crops is grossly inadequate to provide either support to the farmers or commitments under the Food Security Act. There is no mention of a loan waiver for the farmers groaning under debt burden who continue to be pushed to commit distress suicides,” it said.

Similarly, it said that the middle classes, too, did not accrue any benefits. “The employees see a reduction in the earnings on their savings. Even the so-called relief of Rs 2 per litre of petrol and diesel is offset by increasing the cess from Rs 6 to 8 per litre.”


Also read: Expert Gyan: Is Budget 2018 Really Putting Farmers First?


Similarly, CPI (ML-Liberation) also said that the budget was high on “big announcements without concrete allocation or measures of implementation”. The party said that while the government talks about implementing Swaminathan committee recommendations and increase the MSP 1.5 times the input cost, “the input cost calculation formula of the government takes only running costs into account without factoring in the fixed costs incurred by farmers.”

It added that the budget is silent about the basic demands of trade unions regarding minimum wages, ho and social security.

“The budget also refuses to tackle the two other major economic concerns of the Indian people – unemployment and mounting inequality. There are no tax proposals for the super-rich even as we know the top 1% claimed 73% of the wealth added in 2017. The budget talks big about healthcare, but instead of strengthening the public healthcare system it only proposes to increase the health insurance cover for the poor which will only benefit private hospitals and insurance companies at the cost of the public exchequer.”

It said that the budget was a mere “lip-service paid in the name of the farmers and the poor”.

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