People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 10

March 09, 2008


BUDGET 2008-09

Basics Untouched: CITU

The Centre of India Trade Unions (CITU) issued the following statement on February 29, 2008.

THE Centre of Indian Trade Unions (CITU) considers that the budgetary proposals for the year 2008-09 essentially reflect continuation of the same policy of globalisation despite some sops in it.

In the finance minister?s proposals there has been some rise in allocations in existing schemes, but no tangible impact will be there. Some of the schemes are still now on paper as recruitment is banned and there is no manpower to make the scheme operational, let alone be effective.

A meagre increase of Rs 1000 crore in the allocation for Integrated Child Development Services (ICDS) scheme is totally inadequate for its universalisation while exporters got more than Rs 8000 crore extra as relief from appreciation of rupee value. The rise in remuneration for anganwadi employees is granted after their long drawn agitation but it is much less than expected.

Allocation for agriculture is totally insufficient. Massive government investment for irrigation was needed, but the budget proposals are totally inadequate. So, private initiative, private indebtedness, failures and suicides will continue. There is no move to strengthen rural market systems which are in danger because of globalised operations and poor farmers and small producers are suffering. The finance minister failed to attend to the uneconomic operation of small and medium farmer

On the other hand, taxation on long term capital gains in security transactions has not reintroduced, although huge amount of money is being earned or transacted in share market.

The basic thrust of privatisation, pushing public sector companies to share market remains the main guiding principles of this budget. Several proposals are there to ensure greater role of private sector in country?s economy.

The increase of Rs 1000 crore for PDS is misleading because it covers only the extra expenditure incurred for import of foodgrains.

Even after 8 per cent growth of the economy, there is not a single word about lifting ban on employment, which means that contractorisation and outsourcing will continue. There is increase in the rate of interest on PF and Post Office Savings. There is no support for senior citizens to increase their income.

The increased income tax exemption limit is however less than expected but is welcome. However the tax on perquisites (perks) is retained, which was expected to be abolished.

The allocation for the social security scheme for unorganised workers is too little and does not touch even the fringe of the problem. On the whole the budget fails to give any meaningful relief to unorganised sector workers, rural poor and unemployed youths, who constitute 85 per cent of the total population of India. But by all indications, with a slow down in the growth rate of economy and increased money supply, foreign and domestic, this budget will fuel inflation from day one.

On the whole the working class and poor people of the country will not feel happy after hearing the budget proposals.

Inadequate Relief ForFarmers: AIKS

The All India Kisan Sabha issued the following statement on the union budget 2008-09.

THE All India Kisan Sabha(AIKS), while welcoming the debt relief measures announced by the finance minister in Budget 2008-09, is of the firm opinion that these would not be able to take care of the bulk of small and marginal farmers owning more than 2 hectares of dryland. These would also not help farmers who have taken debts from private money-lenders, which constitutes 2/3rd of total farm debt. Moreover, it is disappointing that there is no provision for adequate credit on 4 per cent interest as recommended by the M S Swaminathan Commission to protect the farmers from future debt trap

The increase in Plan outlays on agriculture falls far short of expectations of the farming community in so far as investment on agriculture proposed in the union budget would fail to increase production and productivity to generate adequate employment in the rural sector to meet the present acute agrarian crisis.

The union budget does not provide food subsidy to the required level and there is no provision for expansion of Public Distribution System, as universally demanded, to meet the challenge of rising prices of food and essential commodities in the absence of which the tall talk of assuring food security for the entire nation becomes an empty slogan.

The AIKS regrets that the union budget remains silent on crop insurance schemes for farmers to provide protection to large number of peasants from crop failures due to natural calamity and other factors beyond their control.

The meagre increase on outlays for elementary education is disappointing and the total public expenditure on education falls short of NCMP commitment of 6 per cent of GDP expenditure on education.

The budget proposal for 20 per cent increase in NREGA outlays would prove to be extremely inadequate because the number of districts covered has almost doubled.

The All India Kisan Sabha urges the UPA government to establish a Price Stabilisation Fund to take care of price fluctuations of food and other essential commodities. Further the natural calamities fund should be augmented to take care of all natural calamities such as floods, frosts, erosion, droughts etc.

All in all though the union budget 2008-09 has taken some positive and welcome steps, the low public investment on agriculture and other halting and inadequate steps as enumerated above will fail to improve the lives and living conditions of crores of rural working people in our country.

Cosmetic At Best: AIAWU

The AIAWU issued the following statement on the Budget 2008-09

Given the fact that the vast majority of India?s people live on between Rs 9 and Rs 20 per day, the 2008-09 budget is cosmetic at best and a cruel joke at worst. Even the much touted amount of Rs 60,000 crore for waiving the debts of small and marginal farmers owning two hectares or less is meaningless as the majority of such farmers do not get loans from banks while the debts of private money-lenders remain as before. So the relief is in words only.

While welcoming the NREGA?s extension to the country as a whole, the inadequate sum of Rs 16,000 crore will only fill the pockets of the corrupt with the poor as only a shield to protect them. We are aware of the corruption already being resorted to under this scheme and the poorest sections will raise even broader and more determined efforts to ensure that the issue of Employment Guarantee does not remain only a promise on paper as the allocated amount leads one to believe. A minimum of Rs 30,000 crore is necessary to ensure that the scheme provides at least a safety net to the poorest and the most vulnerable sections of the people.

As regards the Public Distribution System, the allocation is less than that of last year taking into account the price rise since then. The sharp cut-backs in the quotas of states where the system functions the best, like Kerala and West Bengal, reflects the true attitude of the government to the proper implementation of the rationing system. The government must be prepared either to increase the allocation adequately or face resistance on the streets. Also the recent raising of petrol and diesel prices will ensure that inflation will increase and the poor will find it even more difficult to subsist than before. In these circumstances the allocation for the PDS must be raised by at least Rs 10,000 crore.

As regards Education and Public Health, the allocation is well below the 6 per cent and 2-3 per cent of the GDP respectively promised in the Common Minimum Programme. And the fact that the finance minister has chosen the last budget of the UPA to pay lip service to the ?aam aadmi? and the Common Minimum Programme speaks volumes about the seriousness with which it was drafted and also the will to implement it.

A major element that is missing in the budget is a commitment to land reform, which is necessary to tackle the agrarian crisis on a war footing. The reliance on merely private investment in agriculture or enough government investment to attract it is no solution. The budget therefore is only an exercise in pulling the wool over people's eyes and will in no way help to better the conditions of some 80 crore toiling people of this country. The debate on the budget will continue and one hopes the government will do its best to ensure that some more concrete steps are evolved in ensuring an end to the widespread misery that they have imposed on these sections as a result of their policies of profits over people.

AIDWA On The Union Budget 2008-09

THE AIDWA welcomes the fact that the finance minister has finally taken cognizance of the huge agrarian crisis in the country and taken steps to bring relief to farmers, who include a large number of women. However, the measures for debt waiver and debt relief do not address the critical issue of loans taken from private moneylenders. Secondly, many regions in the grip of the crisis such as Vidarbha in Maharashtra and Rayalseema in Andhra Pradesh are dry land areas, where holdings are usually more than the proposed 2 hectares. The crucial question of the reduction in the rate of interest to 4 per cent on agricultural loans has been ignored. Finally, it is not just debt relief, but a rejuvenation of the entire agricultural sector through a massive increase in public spending that will alleviate this crisis.

Finally after four years, the UPA government has heeded to the voice of lakhs of Anganwadi employees. However, their demand for an increase in wages has been met only partially. The increase in the remuneration of workers by Rs 500 and helpers by Rs 250 is still nowhere near the minimum wages paid in different states, and there is no provision for their retirement benefits. Secondly, the budget does not reflect the allocations to universalise the ICDS scheme and make 14 lakh anganwadi centres functional by the end of 2008 as per the Supreme Court directive, especially at a time when child malnourishment and infant mortality continues to remain high in the country.

Given the huge increase in the prices of essential commodities, especially wheat, rice, pulses, etc, it was expected that the budget would suggest measures to curb inflation, which has been further exacerbated by the recent increase in fuel prices. The UPA had given an undertaking in the Common Minimum Programme to strengthen the Public Distribution System and move towards universalising it. However, the meager increase in the food subsidy allocation from Rs 31,456 crore last year to Rs 32,667 crore, is hardly adequate to ensure basic food security for more than 70 per cent of our population that lives below the poverty line. This cannot meet the needs of food-deficit states such as Kerala, as well as states that have been adversely affected by the recent cuts in allocations of foodgrains.

The allocations for health and education in the budget remain far below the targets set in the CMP. For example, there has been a nominal increase of only Rs 1000 crore for the National Rural Health Mission. The decision to shift the burden of the Sarva Shiksha Abhiyaan to the states shows the lack of commitment of the central government to implement the Constitutional guarantee of the right to education. All other measures appear to be token gestures.

While the proposed number of beneficiaries of the National Old Age Pension Scheme, has been increased from 87 lakh to 157 lakh, the condition that they must belong to the BPL category has not been waived, keeping many needy old people, particularly women and widows out of its purview. Similarly, the government has announced that every worker in the unorganised sector of the country falling under the BPL category will be provided a health cover of Rs 30,000 under Rashtriya Swasthya Bima Yojana. As is well known, the current BPL criteria are so fraudulent that they effectively exclude most of the poor. Moreover, it is incumbent on the government to provide budgetary support for social security rather than depend on insurance companies to provide these services. The AIDWA demands that instead of such token targeted social security schemes, the UPA immediately enact a law to provide universal social security to the entire unorganised sector, a very large part of which consists of women.

As far as gender budgeting is concerned, we welcome the fact that more ministries have provided a gender budget analysis of their expenditure. However, the figures quoted by the finance minister are deceptive, since in terms of a proportion of the GDP, the allocation for women specific schemes has only gone up by from 0.50 per cent to 0.52 per cent! We also welcome the proposal to increase the upper limit for income tax, especially for women and senior citizens.

Unemployment Not Tackled: DYFI

The union budget 2008-09 has failed to address the burning problem of spiraling unemployment in the country, as there are no concrete proposals and allocation for employment generation for crores of educated unemployed youth. Though it has been announced in the budget that under its phase III, the remaining districts of the country will be covered in the NREGA with effect from April 1, 2008, the allocation made for its universalistation is well below what is required. The total budget allocation for rural employment has increased only by one thousand crore rupees. The Sampoorna Grameen Rozgar Yojana (SGRY) will be subsumed in the NREGA. So there is no allocation for this scheme. For Swarnajayanti Gram Swarozgar Yojana (SGSY), which covers all aspects of self employment including Self Help Groups (SHGs), there is an increase of only Rs 300 crore.

In a situation of rampant unemployment in the economy as indicated and revealed in the Economic Survey, this attitude of neglecting the important aspect of employment generation will further aggravate the situation. Today, youth constitute the overwhelming majority of our population and for the development of these vast human resources, allocation for employment generation is very meagre. Democratic Youth Federation of India demands for more budget allocations for employment generation.

Minimum Promises

Also Unkept: SFI

The central executive committee of the SFI issued the following statement

The central executive committee of the Students? Federation of India (SFI) feels that the UPA government has yet again let go an opportunity to show its sincerity in implementing the promises it had made in the NCMP. The Budget 2008-09, being the last full-fledged budget for this government, it was expected that social sectors like education would witness substantial increases.

Though allocations to education were increased by 20 per cent when compared to the previous year allocations, the allocations as a per cent to the total budgetary allocations remain the same. The Economic Survey placed in the parliament stated that education was allotted only 4.58 per cent of total budgetary allocations last year and this remains the same even for this year. This is once again far short of the demand of the academic community that is asking for an allocation of 10 per cent of the total budgetary allocations. Unless this is done the NCMP promise of 6 per cent of GDP for education cannot be realised. As the Economic Survey points out it is only a paltry 2.84 per cent for the year 2007-08. Thus the UPA government failed in implementing one of its important promises made in the NCMP.

The finance minister in his budget speech mentioned that the Mid-Day-Meal scheme would be extended to all the upper primary school children throughout the country. This is welcome initiative but the resources allocated to the scheme cast a question mark over the materialisation of this intent. According to the amount allocated to this scheme last year each child got Rs 2.03 per day, but this year the amount is going to be further reduced to Rs 1.59 per child per day. So all the tall claims of providing ?nutritious and healthy food? will not materialise.

According to Oversight Committee this year?s budget should allocate Rs 3518.72 crore for higher education if the government is serious about implementing the 27 per cent reservations for the OBCs and simultaneously increase the number of seats in higher education institutes by 54 per cent. But the budget has allotted only Rs 2522 crore for this purpose and this casts serious apprehensions on the government?s motives.

It is good that the budget talks about many new institutions but unfortunately it does not allocate resources that are required for their establishment. The budget also talks about the government?s intention to continue with the ?privatisation? of ITIs, at the behest of the World Bank in the garb of private-public partnership. Experience in states like Haryana has proved that this move is detrimental to the interests of the students and common people. Moreover the budget also states that the government has accepted the recommendations of the National Knowledge Commission, one among them is for an increase in the fees collected from the students. This is detrimental to the access of education to the majority in our country and cannot be accepted.

In spite of the ?increase? in allocations to education the budget fails to meet even the minimum promises made by this government, leave alone the aspirations of the people.

Hike In Remuneration For

Anganwadi Workers Too Low

& Too Late, Says AIFAWH

THE finance minister has announced an increase of Rs 500 and Rs 250 in the monthly remuneration of the anganwadi workers and helpers working in the Integrated Child Development Services (ICDS) scheme. The sustained and militant struggles of the anganwadi workers and helpers all over the country have forced the government to enhance the remuneration.

The AIFAWH expresses its disappointment that the increase announced by the finance minister is too low and too late. Though the prices of all the essential commodities have increased several times there has been no increase in the pathetically low remuneration of Rs 1,000 and Rs 500 for the anganwadi workers and helpers during the last six years. Besides, there has been a tremendous increase on their work load during this period. There is no mention of provision of any social security benefits and pension for the anganwadi employees, particularly those being forcibly removed from service on reaching 58 years of age.

The increase in the allotment for ICDS from Rs 5,293 crore to Rs 6,300 crore is too inadequate to meet the UPA commitment to universalise ICDS.

AIFAWH calls upon all the anganwadi workers and helpers to unite and continue their struggles, on their long pending demands of universalisation and strengthening of ICDS, regularisation of their services, improved working conditions and social security benefits.

AISGEF Reaction

AISGEF issued the following statement on February 29, 2008.

UNION Budget 2008-09, being an election budget, is an exercise in a delicate act of camouflaging the long term policy document of the government enunciated in pre-budget Economic Survey, Rail Budget on the one hand and the present General Budget on the other.

Budget which has been placed in parliament today is the object of immediate attention of the people because the day-to-day temporary issues are dealt, sometimes divorced from the long term policy document of pre-budget Economy Survey.

While the real policy document of the government, the Economic Survey, seeks to play havoc with the lives of the working class by suggesting abolition of 8 hours working day to be replaced by 12 hours a day, pushes entry of private capital in the the public sector including mining and oil field, nuclear power, advocates 49 per cent FDI in insurance, banking, retail sector and agriculture, along with outright auction of sick PSUs, decontrol of sugar, fertilizer and pharmaceutical, etc. All these are prescriptions of the outstandingly wild policy of IMF-World Bank dictated neo-liberal reforms, which means handing over the economy of the country to the indigenous and multinational capital. The General Budget has attempted to soften the real offensive in order to hoodwink the common people.

The debt waiver for the small and marginal peasants, increase in investment for education and health sectors, token increase of monthly remuneration of the Anganwadi workers, small increase in health insurance for unorganised sector workers, more relief for the middle class income tax payer, particularly the senior citizens, while at the same time keeping untouched Corporate tax which is reaping profits of astronomical dimension and blessed with unwarranted concessions are some of the features of this budget.

Added to this is the Railway Budget which is policy prescription for the privatisation of the Railways. The General Budget examined in the background of Economic Survey is nothing but a sugar coating for the bitter pill of intensifying the IMF-World Bank dictated neo-liberalisation and loot of the country?s resources.

Moreover, for the government employees another imminent danger is posed for the pension system as the Economic Survey pledges to implement the New Pension Scheme immediately for the recruits who joined after 1.1.2004. This is alarming threat to the other sections of employees who have till now resisted the imposition of New Pension Scheme for them.

Finally, there is no adequate fiscal policy stimulant to the Indian economy when the world economy is poised for slowing down following recession worries in US economy.

The AISGEF urges the employees and workers and the entire toiling masses to look at the General Budget in its entire policy background and voice their strong protest against the serous danger lurking behind the General Budget 2008-09.