People's Democracy

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


No. 04

January 22, 2012

Central TU Leaders Meet FM for

Pre-Budget Consultations


Leaders of eleven central trade unions -- CITU, AITUC, BMS, INTUC, HMS, AIUTUC, AICCTU, UTUC, TUCC, LPF and SEWA – met the union finance minister Pranab Mukherjee on January 16 and discussed about the forthcoming budget. They placed before him their demands in the form of the following memorandum:


WE thank you for inviting the Central Trade Union Organisations for the pre-budget consultations. We hope that our suggestions will be taken up with all seriousness and will find appropriate reflection in the forthcoming budget.


We are seriously concerned about the situation of the country’s economy in the present global scenario. We are afraid the seriousness has not been truly reflected in the note on “State of Indian Economy”, sent by the ministry of finance (MoF) to us. In the midst of acute agrarian distress, unacceptable levels of inflation leading to sky rocketing prices, huge job losses, mounting unemployment, there is an urgent need to revisit these areas of concern which has been glossed over in the note. For example, the note deals with GDP growth since 2005 in two and half pages without mentioning a word about employment growth during this period. For a proper assessment of actual impact of the economic growth on the people, the employment data should be released every quarter along with estimate of GDP which will show how most of the gains of GDP growth are being wholly appropriated by the employers/investors leaving common masses high and dry. We urge upon you to initiate suitable mechanism to bring in public domain the actual linkage of employment growth with GDP growth for realistic assessment of the state of economy.


We further urge that the coming budget should be people-oriented addressing the issues of poverty, unemployment and social infrastructure. We place here our specific proposals with this end in view.


·        Take effective measures to arrest the spiraling price rise and contain inflation; Ban speculative forward trading in commodities; Universalise and strengthen the Public Distribution System; Rationalise the tax/duty/cess on petroleum products as a part of anti-inflationary measure.

·        In view of huge job losses and mounting unemployment problem, the ban on recruitment in government departments, PSUs and autonomous institutions should be lifted as recommended by the 43rd Session of Indian Labour Conference (ILC).

·        All stimulus packages to the corporates must be made conditional to ban retrenchment, VRS, lay-off, closures, wage-cut etc. and to create employment.

·        The massive workforce engaged in ICDS, Mid-day meal scheme, Vidya volunteers, Guest teachers, Siksha Mitra etc. be regularised and the workers engaged in the Accredited Social Health Activities (ASHA) be brought under the coverage of statutory minimum wage and social security. Universalisation of ICDS be done as per Supreme Court directions by making adequate budgetary allocations.

·        The scope of MGNREGA be extended to urban areas as well and employment for minimum period of 200 days with guaranteed statutory wage be provided, as unanimously recommended by 43rd Session of ILC.

·        Steps must be taken for removal of all restrictive provisions based on poverty line in respect of eligibility coverage of the schemes under the Unorganised Workers Social Security Act 2008 and allocation of adequate resources for the National Fund for Unorganised Worker (as fixed percentage of GDP) to provide for Social Security to 43.5 crore unorganised sector workers including the contract/casual and migrant workers in line with the recommendations of Parliamentary Standing Committee on Labour and also the 43rd Session of ILC.

·        Public investment must be increased for creation of assets and decent employment. For the purpose, the public sector units should be strengthened and expanded. Disinvestment of shares of public sector units should be stopped forthwith and their huge reserve and surplus of more than Rs 6 lakh crore be used for rehabilitation of sick CPSUs and for modernisation and expansion of other CPSUs. The CPSUs are having average debt equity ratio of 0.75:1 as compared to 2.3:1 in private sector, PSUs should be allowed to have more access to debt market of banks and financial institutions instead of resource mobilisation in equity market through disinvestment.

·        The financial sector, including banks and insurance which stood the test of time even during the recent global meltdown should be encouraged, enlarged and improved instead of imposing the so called reforms which will adversely affect them and weaken their public sector character. The proposed move of Banking and Insurance and Pension Reforms must be stopped forthwith. Industrial houses should not be permitted to start banking operations.

·        Requisite budgetary support for addressing crisis in traditional sectors like Jute, Textiles, Plantation, Handloom and Coir etc.

·        Budgetary provision for elementary education should be increased, particularly in the context of the implementation of the right to education as this is the most effective tool to combat child labour.

·        Ongoing export of raw materials/mineral resources should be restricted and strictly monitored either directly or through appropriate fiscal instrument to promote value addition and consequent employment generation domestically. In particular, iron-ore export should be banned and domestic steel makers should be allotted captive blocks on a preferential basis. 

·        The system of computation of Consumer Price Index should be reviewed as the present index is causing heavy financial losses to the workers. The revision of DA should be done every three months instead of six months.

·        Rate of interest on EPF must be enhanced in view of high inflation and as a part of social security. Threshold limit of 20 employees in EPF Scheme be brought down to 10 as recommended by CBT-EPF. Pension benefits under Employees Pension Scheme (EPS) unilaterally curtailed by the government should be restored. The government and employers’ contribution be increased to allow sustainability of EPS and for provision of reasonable minimum pension as recommended by Parliamentary Standing Committee on Labour. The interest rate on Special Deposit Scheme (SDS) be raised to 9.5 per cent to begin with.

·        Assured Pension for all

·        Universal coverage of all employments under Minimum Wage Act and fixation of statutory minimum wage not less than Rs 10,000 per month with indexation

·        Removal all ceilings on payment and eligibility of Bonus, Provident Fund; Increasing the quantum of gratuity.

·        No Contractorisation and outsourcing of work of permanent/perennial nature. Till the contractorisation is abolished, payment of wages and benefits to such workers at the same rate as available to the regular workers of the industry/establishment 

·        Income Tax exemption ceiling for the salaried persons should be raised to Rs 3 lakh per annum and fringe benefits like housing, medical and educational facilities should be exempted from the income tax net in totality.

·        Entry of MNCs and big corporate in retail trade must be prohibited.





In this regard we propose the following:


·        Increase duty on imported power plant equipments

·        Impose windfall tax on petroleum products exported from standalone refineries to curb their windfall profits.

·        A progressive taxation system should be put in place to ensure taxing the rich and the affluent sections who have the capacity to pay at a higher degree. The corporate service sector, traders, wholesale business, private hospitals and institutions etc. should be brought under broader and higher tax net. Increase taxes on luxury goods and reduce indirect taxes on essential commodities as at present the overwhelming majority of the populations are subjected to indirect taxes that constitute 86 per cent of the revenue.

·        Increase export duty on ongoing iron ore export.

·        Concrete steps must be taken to recover huge accumulated unpaid tax arrears which has already crossed around Rs 3 lakh crore on direct and corporate tax account alone, and has been increasing at a geometric proportion. Such huge tax-evasion over and above the liberal tax concessions of around Rs 2 lakh crore on direct and corporate tax account as on 2009-10, should not be allowed to continue.

·        Effective measures should be taken to unearth huge accumulation of black money in the economy including the huge unaccounted money in tax heavens abroad. This money should be directed towards providing social security. 

·        Concrete measures must be expedited for recovering the NPAs of the banking system from the willfully defaulting corporate and business houses. Defaulters should not be allowed access to fresh loans.

·        Tax on long term capital gains must be introduced; so also higher taxes on the security transactions must be levied.

·        ITES, outsourcing sector, educational institutions and health services etc running on commercial basis should be brought under service tax net.


We hope, the suggestions made above will receive serious consideration. We also urge you to hold post budget discussion with trade unions as is held with the corporate associations/federations.