Reduction in subsidies: CPI(M) calls Budget 2024 regressive, contractionary

The Communist Party of India (Marxist) has vehemently criticised the Union Budget 2024, calling it regressive and contractionary. In a strongly worded statement, the CPI(M) highlighted significant cuts in subsidies and a lack of focus on expanding economic activities, which they argue will exacerbate the miseries of the people and stifle investment and employment generation.

The party pointed out that while the government's revenue earnings increased by 14.5 per cent, expenditure grew by only 5.94 per cent. Instead of using the increased revenues to boost economic activity, the government has chosen to reduce the fiscal deficit from 5.8 percent to 4.9 percent of GDP, a move the CPI(M) claims is designed to appease international finance capital.

Key subsidy cuts include a reduction of Rs 24,894 crore in fertiliser subsidies and Rs 7,082 crore in food subsidies.

Expenditure on education, health, and rural development have remained almost unchanged as a percentage of GDP.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) continues to be neglected. With Rs 41,500 crore already spent in the first four months of the financial year, only Rs 44,500 crore remain for the next eight months, which the CPI(M) argues is grossly inadequate to address the deep unemployment crisis in rural India.

Terming the employment linked incentive scheme, proposed by the FM Sitharaman "another avenue for subsidizing corporates" CPI(M) said "such measures cannot effectively address the unemployment issue, which is rooted in the shrinking purchasing power among the people".

Despite the government's rhetoric of 'cooperative federalism,' the CPI(M) claims that state governments have been given a raw deal, with Finance Commission grants to states reduced from about Rs 1.72 lakh crore in 2022-23 to about Rs 1.40 lakh crore in 2023-24, and further to Rs 1.32 lakh crore in the current Budget.

This reduction is seen as politically motivated, benefiting states like Andhra Pradesh and Bihar under political compulsions, given the NDA government's reliance on support from allies such as the Telugu Desam Party and Janata Dal (United).

Calling the Budget as one aimed at enriching the rich while impoverishing the poor, with no proposals for wealth or inheritance taxes on the super-rich, the CPI(M) said the Budget fails to address the pressing issues facing the people and the economy.