(Weekly Organ of the Communist Party of India (Marxist)
February 22, 2009
INTERIM BUDGET 2009
Reactions Of Mass Organisations
The Finance minister who presented the vote-on-account for the fiscal year 2009-10 has shown utter disregard to the needs of the millions of peasants, agriculture workers and toiling masses whose problems have only been accentuated under the dual impact of the agrarian crisis and the present global economic crisis. On the contrary, the government has taken refuge in vacuous statements like ‘India is the second fastest growing economy in the world’ without proposing anything concrete to resolve the problems.
The ‘aam aadmi’ government has not bothered to take note of the agrarian crisis, the food crisis, unemployment and increasing prices under which the masses are reeling. It is shocking that the real import of the global economic crisis has not dawned on our policy makers and even as there are media-driven talks of bail-outs for the corporate sector, there are no bail-outs for the aam aadmi.
The universalisation of the public distribution system and a comprehensive public health system which are indispensable for ensuring better standards of living and providing relief to the poor have been ignored contemptuously. Claims of encouraging record food production are ironically accompanied by steep cut of 73 per cent in the allocation of food grains to the states under the APL category. Employment generation and rural development has taken a backseat. In times of falling prices for cotton, coffee, rubber and many other crops, the government’s attitude is only pushing peasants and agricultural workers into indebtedness and acute distress. In the context of the global economic crisis, the failure to link the NREGA to rural infrastructure development (including irrigational infrastructure), absence of any emphasis on increase in public investment in agriculture, rural development and social sectors coupled with the insensitivity to the insecurities of workers and farmers threatened by lay offs and price crashes has only exposed the true character of the UPA government.
The skepticism about the much-hyped loan waiver scheme, which according to the Finance minister has benefited 36 million farm households, has also turned true. Of the 89.33 million farm households in India nearly 43.42 million farm households are indebted. Small and marginal farmers constitute 83.8 per cent of the farm households and of them 46.28 per cent are indebted. A large section hence still remains untouched by the loan waiver. These figures speak louder than words about the inadequacy of the scheme. The loan waiver scheme has also not addressed the loans from informal sources. However, the present budget makes no mention of the issue of indebtedness.
The government has thrown to winds the crucial proposals of the national commission on farmers like the setting up of a price stabilisation fund for agricultural produce, the universalisation of the crop insurance scheme, increased public expenditure on rural development, food subsidy and employment generation. The recommendation of the commission to reduce the interest rates from 7 per cent to 4 per cent which would have benefited farmers in distress has also not found any mention.
The whopping Rs 60,000 crore shortfall of tax revenue collection in 2008-09 which is a direct impact of the economic slowdown will only have adverse impact on public expenditure and constrain the spending plans of the next government. This is already clear from the cut in allocations in the interim budget from last years' expenditure (revised estimates) on rural development, especially the NREGA, as well as on urban development and food subsidy. The revised estimates for plan expenditure on agriculture and social services also show that the government has failed to spend the amounts that were budgeted in 2008-09.
The projected central plan outlay for agriculture for 2008-09, which stood at Rs 9660 crores, has fallen in the revised estimates to Rs 9568 crores contrary to expectations of increased investment. The department of rural development allocation for 2009-10 has witnessed an absurdly low allocation of Rs 66070 crores, which is a reduction of Rs 9084 crores from the plan outlay of Rs 75154 crores, which includes the NREGA funds.
The vote-on-account is an indicator that there is no respite for the aam aadmi from the situation of acute distress and the situation in coming days is only going to worsen. The UPA government, which had under the pressure of mass movements and the Left parties taken certain palliative measures, has now revealed its true intentions by remaining unresponsive to the demands of the farmers and toiling masses. The tall claims of the aam aadmi government have proved to be farcical. The AIKS calls upon the people of the country to intensify struggles against this betrayal.
The All India Agricultural Workers Union (AIAWU) calls on agricultural labour to resist neo-liberal policies embedded in the interim budget despite their failure on a global level, that are likely to boost inflation, to lead to increasing pressure on rural jobs without any effort to expand the already flagging agrarian economy. This can only be done with adequate budgetary support to central plan expenditure, rural development schemes, NREGA, Sarva Shiksha Abhiyan, the mid-day meals scheme, the National Rural Health Mission and allocations for the public distribution system and with the cancellation of rural debts and provision of easy credit to working farmers at 4 per cent interest. Otherwise the existing policies will cause widespread distress on the one hand and wasteful expenditure on the other.
These policies will make even survival of landless labour impossible in the coming months. This must be countered with a major increase in funds available for the NREGA and other employment schemes and the inclusion of infrastructural works under these, as well as the writing off of the debts of agricultural labourers like those of farmers. A failure to do this will lead to increasing competition for work under distress conditions and will lead to the reduction of wages of casual and migrant labour that will be exploited by the very forces implementing these policies to divide the people. The only way to prevent this is to ensure the passage of a comprehensive central legislation for agricultural labour and struggle relentlessly to ensure that the full 100 days of work is provided under NREGA and the minimum wage for any part of the country is increased to Rs 200 per day to make up for the price rise. The present inflated price of diesel and petrol must be reduced by another Rs 5 to Rs 15 to reflect the fall in the international price of oil. This will go some way to curbing the price rise of all commodities.
At the same time, the government must prevent land being gifted to unscrupulous land mafias hiding behind the mask of corporate industrialists as in the Satyam case, and immediately hand over these lands to the landless poor with adequate government credit and input support to overcome the flagging production and demand for foodgrains. This must be supported with a universal public distribution system with adequate supply, increased expenditure on rural development and an increase of the central plan expenditure to the level it was at before the 1990s. The mid-day meals scheme, the National Rural Health Mission and the Sarva Shiksha Abhiyan need an increase of at least 30 per cent in their outlay. There is nothing short of organised and protracted struggle to ensure that governments committed to selling out the resources and handing over the opportunities of the people to profiteers who will exploit our social capital for personal gain are reversed. The failure of the government to recover taxes and debts from corporates or prevent them from indulging in massive scandals that can ruin the economy is proof enough that a fight for an alternative set of policies is needed and must be taken up at once.
The interim budget of the central government is virtually the interim election manifesto of the Congress party and an exercise to gloss over the failures and paint an illusory success ‘story’. While being loud-mouthed about aam aadmi, the interim budget statement conveniently remained silent about the conditions of the workers, the job losses, the wage losses and consequently rising unemployment, increasing incidence of suicides among the workers besides the farmers community. The bail-out packages have been pocketed by capitalists while lakhs of workers are out of jobs.
The Finance minister had boastfully mentioned that the food godowns are full, but the majority people are going hungry as the public distribution system has been made to practically collapse. The matter of rise in per capita income is nothing but a statistical jugglery. The gains of GDP growth is being wholly cornered by the affluent few with the rise in number of multi-millionaires and billionaires, while mass of the common people are facing impoverishment and distress.
It is nice that the budget mentioned about the better performance by public sector units, and it made obvious that private sector performance is dismal. Then why is the UPA government hell bent for privatisation of public sector units and pampering the private capital?
The total failure of the public-private-partnership (PPP) projects in infrastructure is clearly visible with the major private players backing out in investing in such projects. But still the interim budget statement is pushing through that approach including making provisions for so called viability gap funding for the private players. CITU opposes the privatisation of ICDS and mid-day meal schemes.
The speech is silent about any tax relief to wage earners. Also it is silent about increasing the salaries of ICDS, mid-day meal, ASHA workers who are actually implementing the several schemes the Finance minister is boasting of while they themselves are starving. This is nothing but cruelty.
The Finance minister has mentioned about national common minimum programme committed by the UPA, but this government violated every aspect of the NCMP. Right from the issues of workers, women, peasants, to foreign policy and other areas, the UPA government has ignored, violated or contemptuously scrapped the NCMP in their five years of governance. His statement on NCMP is a travesty of truth.
The AIDWA expresses its deep disappointment that the interim budget placed by the Finance minister on behalf of the UPA government in parliament on February 16, 2009 has not addressed the extremely negative impact of the global economic crisis on the Indian economy, and especially on the women of this country.
At a time when job losses are becoming an everyday reality, and affecting huge sections of unorganised workers in many sectors including textiles, garments, leather work, gems and jewellery, including the diamond workers, and construction, all of which have a high concentration of women workers, the government has refused to increase public spending to ensure relief for this section.
The crisis in the rural sector needed, among other measures, an expansion of the NREGA, and removal of the limit on the number of days of work. Unfortunately, the allocation for rural development has witnessed a reduction. Urban development and poverty alleviation allocation has also been cut.
With prices of essential commodities still riding high, and food costs increasing, it was expected that the Finance minister would suggest measures to strengthen food security. Unfortunately, the interim budget has actually reduced the allocation for food subsidy. The food subsidy reduction by 1300 crores would mean a further weakening of the public distribution system, which has already witnessed sharp cut in allocation of food grains for APL cards. The demand for a universalised PDS which is the cornerstone of food security has been completely ignored.
The allocation for ICDS at Rs 6705 crores is inadequate, and cannot provide for the 14 lakh anganwadis to become functional, as per the Supreme Court directive. Budget allocation for mid day meals at 8000 crores is also far from satisfying the basic requirements. This will further exacerbate the malnutrition status of women and children, particularly those from already marginalised sections like adivasis and scheduled castes. The allocations for health and education fall far short of the commitments made in the CMP to move for 6 per cent GDP for education, and 2-3 per cent for health.
In the background of the severe impending recession, this interim budget will not serve to provide relief for the working sections, and the marginalised sections of the people, especially the women. It represents a blatant failure of the UPA to protect and safeguard the interests of the people.
As a direct consequence of the anti-people, neo-liberal policies, the Indian economy is currently witnessing a recession, with job cuts and unemployment on the rise. In such a situation the interim budget of the Congress led UPA government has failed to address the serious concerns on the fast deteriorating economic situation in the country. Under the impact of the global economic crisis, the millions of workers in almost all the sectors of economy are losing their jobs. During the last 4-5 months, lakhs of workers in the sectors of textile, garments, gems and jewellery, construction, IT etc., have lost jobs. One of the best examples of the real scenario has been the gradual fall registered in the overall growth of the economy. The rate projected by the government has come down to 7 or below 7 percent. The UPA government has failed to fulfill the promise of employment generation, spending 6 per cent of the GDP on education, 2-3 per cent of the GDP on health or universalising the PDS.
In such a situation, neither the tall and misleading claims made by the Finance minister about the performance of the UPA government nor the claim of being the second fastest growing economy is going to provide any relief to the youth of our country in particular and the people in general. The annual plan expenditure of Rs 2.85 lakh crore, which is less then 5 per cent of GDP, amounts to an extremely weak stimulus and an inadequate response to the prevailing economic crisis.