People's Democracy

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


No. 12

March 24, 2013


The Budget and the Mass of People


Suneet Chopra


THE background in which the budget 2013-14 has come is patently clear. For all the advantages gifted to it, Corporate India has failed to perform. The growth in the manufacturing sector has declined from 2.7 per cent in December 2012 to – 0.6 per cent in December 2013. The mining sector dipped further from – 3.3 per cent to – 4 per cent and electricity generation from 9.1 per cent to 0.7 per cent. That this should have happened when the government had lavished Rs 5,73,630 crores upon these sections, a figure higher than the projected fiscal deficit of Rs 5, 20,925, should inform us as to how successful Dr Manmohan Singh’s policies are in choosing and promoting what he sees are the motors of growth in our economy.


Instead of making the idle rich to pay the price for their non-performance, the budget has imposed burdens on the poor. While the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is being tardily implemented, despite the fact that it is a criminal offence to do so, this budget has failed to increase its allocation of Rs 33,000 crore which is the same as the last year’s allocation, ignoring the growing complaints about delay in providing job cards, providing work, and ensuring payments on time. There are complaints about the use of fraudulent standards of daily piecework, which have been proved to be at least two to three times higher than the average day’s work in recent trials in Punjab. There was an announcement of a general increase in daily wages all over the country, but t has remained on paper for lack f adequate allocation to back it up. So it appears that the government is prepared to allow the breaking of the law in order to prevent the implementation of a measure that has already helped to boost rural development and reduce distress migration in areas where the people or the state government have made a serious effort. That this legal responsibility has not been given its due tells us a lot about what the government thinks of its slogan of “inclusive growth.”


In fact, there has been a decline in the share of funds allocated by the centre for a number of its flagship programmes --- from 47.19 per cent in 2005-06 to 20.8 per cent in 2011-12, with virtually no improvement in the subsequent two budgets (2012-13 and 2013-14). Thus the states too find it difficult to implement the centre’s prescriptions. Moreover, all the states are not being treated equally --- if Bihar got Rs 129 per head for the MGNREGA, Uttar Pradesh got Rs 207 and Rajasthan Rs 537. Clearly, no proper standard exists. In other words, there are no criteria for these schemes by the centre, with every possibility of misappropriation and corruption built in the methodology of this government --- one of the most corrupt governments we have seen to date.


And on top of all this came recently a report of the Comptroller and Auditor General of India (CAG), pointing out a large scale bungling of money in the loan waiver scheme announced for distressed peasants in various parts of the country.


Our contention is further borne out by the allocations for the tribal and scheduled caste sub-plans. Not only are they roughly a half of what are the constitutional entitlements of these groups; their implementation too is dismal as the sub-plan funds are freely diverted to other heads. For example, the money meant for the SC development in Delhi was transferred to the account of the Commonwealth Games. Worse, this year no allocation was made in the budget for rehabilitating the bonded labour despite its continued persistence. Moreover, disinvestment of the public sector undertakings and their sale to private owners is putting to an end a large number of jobs available for these categories. This is in a situation where job reservations are not available in the private sector.


This also goes for the cuts in major subsidies, affecting the poorest and the most oppressed, who are largely engaged in or dependent on agriculture. These subsidies have sharply come down to 3.6 per cent of the GDP in 2011-12 from seven per cent in 2010-11. Further, while large areas of the country were hit by drought, which had been predicted as early as March 2012, the government did nothing about it. On the contrary, it raised the prices of diesel to make it even more difficult for farmers to use their pumpsets. Moreover, it decontrolled the price of phosphatic fertilisers, making them far more expensive for farmers.


The results are obvious. Yields in the major kharif crops have significantly declined --- of coarse gain by 12.3 per cent, of rice by 3.5 per cent, other cereals by 4.8 per cent, pulses by 9.8 per cent, oilseeds by 5.8 per cent and sugarcane by 7.3 per cent. T the same time, the growth of consumption expenditure has come down from over eight per cent on an average over the last few years to barely four per cent now. Aggregate subsidies are likely to fall by more than ten per cent in 2013-14. The subsidy on oil alone has come down to around Rs 65,000 crore from Rs 96,880 crore, leading to a sharp rise in the price of petrol. This is creating an inflationary pressure upon the consumers. To add to it, the fertiliser subsidy for 2013-14 is some three crore rupees less than the year before. This is sure to push up the price of fertilisers as well, making farming even less paying than it was before. This is bound to affect the access of food at affordable prices for the mass of the Indian people. Thus the present budget, with its failure to provide more than Rs 5,000 crores extra for the public distribution system, the Food Security Act and cash transfers and with its move to decrease the tax on future trading in agricultural products, is a sure recipe for disaster by speeding up inflation in the food articles. That this should have happened at a time when the prices of agricultural and food products are rising all over the world and in our country reflects on how out of touch our government is with the requirements of economic welfare of the majority of our people who live in the rural areas. One wonders what their true objective is: Is it to force the small farmers to sell their lands and join the labour market either as cheap rural labour or as a vast army of the unemployed migrating from one state to another?


With a growing mass of people seeking jobs, one would have expected a clear cut policy to give work to the jobless. But precisely this is not there. Obviously the government is relying on the private sector to provide jobs while the public sector either remains stagnant or is being sold off. Rural employment is not likely to see an increase. Jobs in most sectors are likely to contract. However, the government is busy telling the people, faced with hardship and starvation, that this is a world phenomenon. This shows a remarkable insensitivity and irresponsibility on the part of the government.


Even the Economic Survey has warned of nearly 20 million “missing jobs,” while the need is to plan for more jobs if we are to meet the demand of the growing number of agrarian unemployed coming into the urban areas. What is worse, no less than 96 per cent of jobs will be in the informal sector under various descriptions and of poor quality. Only about four per cent of these job seekers will be able to get proper jobs and job security. This situation is both desperate and undesirable. But the fat is that the government has actually planned for it.


The imperative is clear: If we are not to descend into anarchy and crime, we have to come forward in organised mass movements of workers, agricultural labour, peasants and the young unemployed to resist these measures. They will have to frame concrete demands based on land, housesites, work, food, education, health and security, and face the criminal elements whom the present policy of profit at any cost, unleashed by the free market economics, is breeding. Concrete demands must be framed by each section of the people and fought for till they are won.