People's Democracy

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


No. 13

March  27, 2011




'Budget Favours

Rich and Corporates’ – II


Below we publish the second part of the excerpts from the speech delivered by CPI(M) Polit Bureau member and MP, Brinda Karat, in Rajya Sabha on 10 March 2011 while participating in the discussion on Union Budget-2011.


COMING to the petroleum tax regime, I think it is a tax which should have been removed but which was not removed. This is very important when we talk about price rise. Petroleum taxes are something about which, I believe, this government is not giving the full picture. They are very selectively giving statistics to the country and, therefore, misleading the country. We are being told, “What can we do? We are suffering a huge loss.” That is simply not true. For one litre of petrol, we are paying 48 per  cent in taxes. And, on one litre of diesel, we are paying  approximately 32 per cent in taxes. What does that mean? It is giving huge revenues to the government because there is also an element of ad valorem tax on this. So, in a single year, the government of India has benefited to the extent of Rs 1,11,000 crore in revenue mobilisation from these taxes. This year, according to the latest figures of the petroleum ministry, the revenue is going to go up by another Rs 25,000 crore, that is, to approximately Rs 1,35,000 crore. Therefore, I say that it is completely wrong and anti-people on the part of this government to continue with this tax regime. The people must be given relief because, as we all know, high prices of petroleum and the deregulation of petrol prices have further fuelled inflation. Therefore, remove these taxes on petroleum.




I would now like to come to a crucial aspect in this Budget, and that is the cuts in subsidies. We know the chorus of voices from corporate India saying, “Cut subsidies; cut subsidies.” And, they have started cutting subsidies on fertilizers and on kerosene; and, on food. What about fertilizers? At a time when farmers of country are in such acute distress - you have two lakh cases of suicides of farmers staring you on the face – and you are removing subsidies and substituting with the so-called Direct Cash Transfer. What exactly is going to happen when this cut in subsidy starts working? The first point is that the prices of fertilizers are going to shoot up. Today, it is Rs 5300 per tonne of urea. The global price today is Rs 16,000 to Rs 18,000 per tonne of urea. We are importing, approximately, 70 lakh tonnes every year. We are not using our entire installed capacity which is about 200 lakh tonnes. Seven fertilizer units in India are closed down. The government is doing nothing to open these units, and we are importing fertilizers. Once you remove the subsidy on fertilizers, the fertilizer prices are going to shoot up. And, I know that this government wants to introduce private participation in the fertilizer sector. They are waiting for complete deregulation of the fertilizer sector. Just as you did with petrol, you are going to do it with fertilizers, and you are going to make farmers suffer. Therefore, I entirely oppose this cut in fertilizer subsidy. It is an anti-farmer step and I demand that the government should withdraw this cut in subsidy.


What is this direct cash transfer? We had ruling party members saying it is very good, Brazil has done it, Mexico has done it and all Latin American countries are going in for it; what is wrong with it? Please understand what has happened in Brazil. In Brazil, direct cash transfer is a supplementary income to the worker whom they consider is living in poverty. It is a supplement. There, it is not substituting government's provisioning of essential services. We are not against such direct cash transfer in principle. You give it to a widow; you give it to a disabled person. We are giving it in Bengal to workers of closed factories. That is direct cash transfer. We have nothing against that aspect of it.


What are we opposing? We are opposing direct cash transfer as a substitute and replacement for the government's responsibility to provide subsidised essential services. You are going to give it to BPL families when your BPL estimates are so very dubious! In essence, you are going to exclude people from cheap foodgrains. Moreover, suppose you are giving cash for a particular commodity. You give money to a family. In India, in a patriarchal society, do you have any guarantee that the money you give to a family would go precisely for that purpose? If you are going to give money tomorrow for food, do you have any guarantee that it would go only for buying food and not for something else? Therefore, we oppose direct cash transfer and we ask this government not to follow this agenda of retreating from the basic responsibilities of a welfare State.


I now come to this whole point of cuts in expenditure. I have a whole list here of cuts in expenditure. I know that this government is claiming that we have increased expenditure on social services by 17 per cent, etc. If you factor in inflation, then it is not so much. In any case, even according to the Economic Survey, at page 294, if you look at the percentage of GDP, the expenditure on social services has been coming down over the years even as growth has been going up. Last year, in 2009-10,  it was 7.27 per cent; in 2010-11, it came down  to 6.63 per cent. This year, it is around the same as it was last year. I would like to share with the House a calculation made by the Centre for Budget and Governance Accountability; they have calculated what the total expenditure on the rural economy — they include agriculture and allied activities, rural development, Special Area Programmes, irrigation and flood control and village and small industries. As per their calculation, this expenditure has declined from 2.8 per cent of the GDP in 2010-11 to 2.3 per cent of the GDP in 2011-12. Is this inclusive growth? On rural development, you have cut the ministry’s Budget by Rs 2000 crore. Is this inclusive development? On MGNREGA, you are saying that you are going to link wages with the price index. Yet, the allocation for MGNREGA has been cut by Rs 100 crore. Is this inclusive development? We talk about the food security legislation. We are hearing different versions of the food security legislation. We have been demanding a universal public distribution system. We are demanding that the stocks which are there, 2.7 times over what the buffer stock is, should be distributed to the states. But, what are you doing? You have actually cut the food subsidy by Rs 27 crore. I ask you, is that inclusive development?




There are many other examples. But, I would specifically like to come to the issue of the Scheduled Castes, the Scheduled Tribes and women. As far as the Scheduled Tribes are concerned, we had met the finance minister and requested him to monitor what the Planning Commission’s guidelines were on the Scheduled Tribes Sub Plan, the TSP, and the Scheduled Castes Special Component Plan. The allocations are supposed proportionate to their population. Unfortunately, far from being population proportionate, this year also, for STs, it is around 5 per cent while it should be 8.2 per cent. For SCs, it should have been at least 16 per cent but only around 9 per cent has been allotted in this Budget. The gap in terms of money is over Rs 30,000 crore. In other words, if the entire component as a proportion of their population had been there, it would have been that much more for these sections. I request you not to discriminate against these sections. Affirmative action is essential. I had made this point earlier and I would repeat it again that do not divide tribal areas into 'Maoist'-affected and non-'Maoist'-affected. This is the most absurd proposition of this government. All tribal areas deserve development. Why are you giving only Rs 25 crore in the name of ‘Maoist-affected’? Are you going to give it for the police? Then make it clear that you are going to give it for security purposes. If you are giving it for tribals, do not discriminate between tribals living in 'Maoist'-affected areas and non-'Maoist' affected areas. It is not going to help the tribal population.


I would also like to speak about the minority issue. What has this Budget got for minorities? Apart from something for some educational institutions — which is very good and we support that — there is nothing. One of the biggest programmes for the minorities is the Multi-Sectoral Development Plan (MSDP) for minority districts because the Sachar Committee has shown that where the Muslims live, it is one of the worst areas as far as civic facilities and infrastructure are concerned. Therefore, the allocation must be increased. What does this Budget do? The allocation for the most important component of that plan, the MSDP, is actually cut by Rs 100 crore. Is that fair? Is that just? Is that inclusive?


The prime minister’s 15-point new plan talks about increasing employment opportunities for minorities. The Ranganath Mishra Committee has recommended reservations for Muslims in jobs because a large population of Muslims are socially and economically backward. Therefore, they require that affirmative action. Why do you not implement it? We have tried to implement it. We have taken steps in West Bengal to try and implement it. I hope that the government of India will take a leaf out of the West Bengal government’s efforts to empower minorities in the field of increased employment rights.




The last point that I would like to make is a point which is very close to my heart, and that is the issue of women in the Budget. I will say I am happy that Anganwadi Workers’ and Helpers’ salary has been doubled. I welcome that, and I also hope you will take one step more by giving them a pension. There are 50 lakh ASHAs and Mid-day-Meal Scheme workers in the country. All of them find no place whatsoever in this Budget. Their work is seva (service) to the nation. They get only a pittance of Rs 500 per month.


I would especially like to mention about the 43 crore workers in the unorganised sector and the home-based sector, a large section of whom are women. These are those women who are sitting at home. For example, this bindi, which I am wearing, is made at home. The women are putting this bindi on a cellophane piece of paper and packing it. For the whole day’s work, they are not getting more than seven to eight rupees. They are not at all on the government’s agenda. Their work is not reflected in any calculation. Their work is not reflected in any laws. Therefore, I demand that the large number of women in the unorganised sector and unorganised sector’s workers, in general, who are being deprived of social security, should be covered. We do not want these present insurance schemes that are only going to help the big private insurance companies, and you are insisting on contributions from these workers. We want a proper social security scheme; we want laws for all these women. These are the working women of India. 


In conclusion, I would refer to the last sentence in the finance minister’s speech. He had said, “With oneness of heart, let us all build an India, which in not too distant a future, will enter the comity of developed nations.” There can be a oneness of heart only when there is equality and justice. You cannot have a oneness of heart when two-thirds of India lives in the darkness of myriad deprivation. Let the government reverse its deeply-flawed policies based on the neo liberal framework which has led to crony capitalism, which has created huge social inequalities and concentration of wealth. It is only then that India will indeed have a oneness of heart and be able to advance towards realising its full potential.