People's Democracy

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


No. 10

March 07, 2010

Organisations Determined to Protest Retrograde Budget


Inflationary Budget: CITU

THE Centre of Indian Trade Unions (CITU) has denounced the general budget 2010-11 as the cynical and insensitive response of a corporate-captive government to the woes of common people hit by an unprecedented price rise of essential commodities, especially the food items. The CITU has warned that the budget is bound to re-fuel the inflationary expectations along with inflation.

Deploring the government�s single point perverted agenda to reduce subsidy instead of bringing down the prices, the CITU said the budget�s pro-rich bias is clear in its tax proposals. Through extraction of over Rs 60,000 crore through indirect taxes imposed on the common people, the budget has more than absorbed the revenue loss of Rs 26,000 crore in direct taxes, mostly on account of concessions to big corporates. The government�s insensitivity is glaringly clear from the hikes in fertiliser prices across the board when there is a decline in agricultural production. It increased the urea price before the budget and then increased the prices of potassic and phosphatic fertilisers through the nutrient based subsidy (NBS) policy. The latter is sure to push the profits of fertiliser manufacturers and importers, leading to cost hikes in agricultural production.

The CITU also criticised the government�s decision to re-introduce import duty on crude oil as well as petroleum products and to increase the excise duty on diesel and petrol by Re 1 per litre. As a result, petrol and diesel prices have gone up by around Rs 2.60 per litre, which will have a cascading effect. This is coupled with its hidden agenda to deregulate the pricing of petroleum products under the cover of Parikh committee recommendations. The CITU has reiterated that the government cannot brush aside the parliamentary committee recommendation to eliminate import duty on crude oil and to reduce of excise duty on petroleum products. It also noted that the proposed cess of Rs 50 per tonne on coal would not only increase the price of coal but also of electricity that is another major input for agriculture. All this would jeopardise the food security in the country even while the budget talked of a food security bill.

Another crude joke is the allocation of only Rs 1000 crore for social security of 47 crore unorganised sector workers, with the further restrictive conditionality of �below poverty line.� This would itself exclude 90 per cent of these workers from the purview of social security benefits. Similarly, the budget ignores the plight of 1.4 million anganwadi workers and the need of universalisation of ICDS. 

The CITU noted that the budget did not include a single proposal made by trade unions during the pre-budget discussion while most of the corporate houses� suggestions has found place in it, including a continuation of the stimulus package meant for them.

The CITU charged the finance minister of misleading the parliament by claiming expanded ownership through the PSU disinvestment programme. The minister knows well that the retail investors� participation was nominal in the case of NTPC and REC and that the SBI and LIC had to subscribe the shares. The declaration that the government will mobilise Rs 25,000 crore through PSU disinvestment in the current year is totally illogical as the PSUs had a reserve surplus of Rs 5,35,840 crore on March 31, 2009. In fact, during 2008-09 the reserve and surplus increased by more than Rs 50,000 crore, a part of which can be utilised for new investment and job creation.

The CITU strongly denounced the lack of any positive steps in this budget to curb the price rise, create and protect employment, and ensure social security for millions of workforce. It called upon the workers to oppose the anti-people budget through a satyagraha action on March 5.


Celebrations for Traders: AIKS

THE All India Kisan Sabha (AIKS) too has condemned the insensitive increase in the prices of petroleum products, and reduced food and fertiliser subsidies, when people are in distress.

At a time recession has hit all sectors of the economy and the country faces an unprecedented drought as well as floods in many regions, when the prices of essential commodities have sky-rocketed, any responsible government would have come up with concrete measures to provide relief to the people. But, the AIKS noted, the Congress-led UPA government has betrayed the people and resorted to further burdening the poor, while granting direct tax concessions to the high income earners.

The food subsidy bill has been cut by Rs 424 crore --- from Rs 56,002 crore in 2009-10 to Rs 55,578 crores. This is in real terms a drastic reduction, given the high rise in prices. The allocation for strengthening the PDS is a paltry Rs 30 crore. The proposed Food Security Act has also reduced the entitlement and the price of rice is pegged at Rs 3 per kg even as many states provide rice below that. The government is clearly pursuing the neo-liberal agenda of cutting down food subsidies at the people�s expense.

The AIKS has taken note of the increase in customs duty on crude petroleum and restoration of basic duty that was waived off for diesel. All such moves will have an adverse impact on the price situation and burden the common man. Farmers who depend on diesel for irrigation purposes will be badly hit.

Fertiliser subsidy has been cut by Rs 3000 crore compared to last year and urea prices increased by 10 per cent. As the public sector fertiliser companies have been systematically closed down, the Nutrient Based Subsidy regime increase India�s vulnerability vis-�-vis the fertiliser cartels. Since the subsidy on the nutrients will remain fixed, the selling price of fertilisers at the farm level will be decontrolled and companies will decide the retail price of fertilisers. This will push the fertiliser prices up as the market price will be pegged to the import parity price, apart from including the import duties and transportation cost. It has been our experience that fertiliser prices in the international market rise whenever India increases imports.  

The share of rural development expenditure in total budget expenditure has declined from 21.06 per cent in 2008-09 to 16.18 per cent in the 2010-11 budget. Our rural development expenditure is only 2.59 per cent of our GDP at market prices. The expenditure on agriculture and allied activities is now 9.75 per cent of the total budget expenditure --- down from 15.74 per cent in 2008-09. This is only 1.56 per cent of GDP at market prices, compared to 2.50 per cent in 2008-09. The AIKS said, �Such a callous approach in times of crisis is unheard of.�

The expenditure on the NREGS has increased by Rs 1000 crore, which amounts to a decline in real terms. This is to be seen in the context of increasing unemployment and increasing food prices as well as the unprecedented drought in many parts of India. The UPA government clearly lacks concern for the plight of the rural poor and unemployed.

The Kisan Sabha has demanded immediate withdrawal of the cuts in fertiliser and food subsidy, reopening of the public sector fertiliser companies in order to achieve self-sufficiency, and withdrawal of the hike in petrol and diesel prices forthwith. It has asked all its units to protest against the anti-people proposals in the budget.


Insensitive to Education: SFI

APART from taking note of the other retrograde proposals made in the budget 2010-11, the Students Federation of India (SFI) has also noted the insensitive attitude of the government towards addressing the problems in the education sector. The latter in India is marked by a dearth of funds, with more than 90 per cent of our relevant age group population having no access to education. The UPA has, this year too, conveniently ignored the promised spending of 6 per cent of GDP on education. There is only a small increase of Rs 5000 crore for primary education, way below the required amount to fulfil the promises made in the Right to Education Act. The MHRD�s own estimates put the required spending in the Eleventh Plan at Rs 1.73 lakh crore, which means an annual requirement of Rs 34,600 crore per year as opposed to the Rs 22,000 crore announced in the budget. As for higher education, the revised estimates for 2009-10 suggest that the allocation to higher education was only Rs 14,389 crore in place of the Rs 15,429 crore original allocation in the 2009-10 budget. This shows the government�s deceitful role in spending money on higher education. This year too, there has been a meagre increase of Rs 1,461 crore compared to the 2009-10 budget. This exposes the empty rhetoric of HRD minister to expand the number of universities and other higher education institutions in the country. To put it simply, the budget has completely belied the student community�s expectations.

The SFI has lambasted the flawed approach in the budget which seeks to control the fiscal deficit by taxing the poor more and the rich less. Blinded by its neo-liberal dogma, the UPA is pursuing the path of financial deregularisation. The budget also talks of opening up the retail trade sector, which can have disastrous implications for the livelihood of millions of people.

Apart from its pro-rich bias and the increased neo-liberal thrust, this budget also seeks to undermine the federal structure of our country, where states are not allocated their rightful 50 per cent share in the sharable taxes. There is also a squeeze in central assistance in real terms.

The SFI believes that the budget�s misplaced priorities and pro-rich bias have addED salt to the people�s injuries. In education sector also, more and more assaults of commercialisation and privatisation are bound to follow in the absence of an increase in spending.


Callous towards Children: AIFAWH

REFERRING to an increase in allocation for the Integrated Child Development Scheme (ICDS) by Rs 538 crore in the budget, the All India Federation of Anganwadi Workers and Helpers has described it as grossly inadequate. The reason is that today only around 42 per cent of the children below 6 years of age are covered by the ICDS while the scheme is to be universalised by 2012 as per a directive of the Supreme Court. The UPA government has assured the apex court that it will universalise ICDS �with quality� by 2012. But the budget betrays a callous attitude towards the most important programme for the overall development of the children below 6 years, who constitute more than 15 per cent of our population.

In the Eleventh Plan, the revised plan outlay for ICDS is Rs 72,877.52 crore. But the budgetary allocations made by the government so far in the plan period, including in this fourth budget, is only Rs 26,998 crores, i.e. nearly one third. This is highly condemnable. The Federation has warned that the decision to implement the World Bank proposals would result in dismantling of the ICDS.

This budget is shockingly insensitive to the plight of anganwadi workers, who work far below than even half the minimum wages and helpers who work below than one third the minimum wages, in most parts of the country. No allocation has been made either to increase their honorarium or to provide them any social security. Talking to a delegation of the Federation in 2006, the prime minister had promised some social security and pension to the anganwadi workers and helpers. Even after four years, the government has not taken any measure in this regard.

The budget makes only a limited mention of the ICDS: �ICDS platform is being expanded for effective implementation of the Rajiv Gandhi Scheme for Adolescent Girls.� It is in fact increasing the workload of those already burdened.

The Federation has urged upon the anganwadi employees to join in thousands the �Mahapadav� in Delhi in the last week of April, on issues like social security benefits, increase in honorarium to minimum wages, and regularisation.


Jobs in Agriculture Threatened: AIAWU

THE All India Agricultural Workers Union (AIAWU) has condemned the refusal of the central government to integrate the agrarian economy in its growth plan by reducing the expenditure on rural development to a miserable 3.87 per cent. This is despite the fact that rural people in the country are reeling under drought that hit nearly two-thirds of the districts last year. Fertiliser subsidy has been cut down. So more jobs are likely to be lost in agriculture and the starving poor will get less food from the PDS whose outlay has come down further by Rs 400 crore. Thus if the prices fall, it will be because the poor cannot afford to buy.

Among other things, the AIAWU has noted that after the distress sale of lands by the poor peasants, there are plans to hand the same over to land mafias with government support. On the other hand, distressed peasants are on the verge of becoming landless and entering an already burgeoning rural labour market.

The AIAWU has demanded that the budget for rural development be raised by 8 to 10 per cent of the total budgetary expenditure with a minimum of Rs 34,000 crore for MNREGA. The subsidy on foodgrains must be increased by a minimum Rs 3000 crore to provide rice and wheat at less than Rs 3 per kg. It has also demanded reopening of the closed-down fertiliser plants  and withdrawal of the cess on petrol and diesel.


Hitting the Lower Strata: CCGEW

THE Confederation of Central Government Employees & Workers (CCGEW) has described as totally disappointing the latest budget, insofar as the common people and especially the workers are concerned. Taking note of the finance minister�s proposals regarding direct and indirect taxes, the Confederation said the increase in revenue resources from indirect taxation has been made on the specious plea that the global recession has turned the corner and that our economy is poised for an 8 per cent growth. But it seems that sustaining the growth in the economy by further burdening the common man and sparing the rich of taxation, seems to be the ideology of the finance minister. 

In case of salaried taxpayers, the finance minister has not thought it necessary to increase the non-taxable limit whereas he has offered more concessions to those in the higher income bracket of Rs 3 lakh and above. While those in the income bracket of Rs 3 lakh and 8 lakh would be enjoying lesser tax burden, even unskilled workers would be drawn into the ambit of income tax liability, for the minimum taxation limit has been pegged down to what it was in 2009-10. For no valid reason, the standard deduction available to the salaried taxpayers was withdrawn in 2005. The repeated pleas made by the workers year after year have fallen on the deaf ears. The deduction was not restored whereas such deductions continue to be made available to other category of taxpayers.

Thus, the Confederation says, there is no alternative for the workers but to organise militant struggles and force the government to withdraw its taxation proposals that inflict unbearable burden on people at the lower strata of society.