‘Callous budget’ that has betrayed the hopes of the people: P Chidambaram

Congress leader P Chidambaram on Wednesday said that the Union Budget has "betrayed" the hopes of a vast majority of Indians and shows how far removed the government is from the people and their concerns about life, livelihood and the growing inequality between the rich and the poor. Read his full analysis here.

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The Budget for 2023-24 and the Budget Speech of the Hon’ble Finance Minister show how far this government is removed from the people and their concerns about life, livelihood and the growing inequality between the rich and the poor.

Let me begin by pointing out, with regret, that the FM has not mentioned the words unemployment, poverty, inequality or equity anywhere in her speech. Mercifully, she has mentioned the word poor twice in her speech. I am sure the people of India will take note of who are in the concerns of the government and who are not.

Let me turn to the numbers.

Last year, the government estimated the GDP for 2021-22 at Rs 232,14,703 and, assuming a nominal growth rate of 11.1 per cent, projected the GDP for 2022-23 at Rs 258,00,000 crore. The GDP for 2021-22 has been since revised upward to Rs 236,64,637 crore. In today’s Budget papers, the GDP for 2022-23 has been estimated at Rs 273,07,751 crore which yields a growth rate of 15.4 per cent, much above the earlier estimate. Given this impressive number, real GDP ought to have grown in double-digits. Yet the FM (and the Economic Survey) put the GDP growth at only 7 per cent this year (para 2). Will the government explain?

The claim of real GDP growth is in the face of lower capital expenditure. Please see the following numbers:

Please note that both Capital Expenditure of the central government and the Effective capital expenditure are lower than the Budget Estimates. So, what drove growth in 2022-23? We know that private investment is down, exports are down and private consumption is stagnant. So, how does the government explain the 7 per cent growth in the current year?

Besides, in 2022-23, the growth rates in Q1 and Q2 have been estimated at 13.5 per cent and 6.3 per cent, respectively. So, we already have 9.9 per cent growth in the first half of the year. If the whole year will only yield 7 per cent, does that mean that Q3 and Q4 will record growth rates of only 4 to 4.5 per cent. For the whole year, therefore, quarterly GDP growth rate is sliding: 13.5, 6.3, 4.2 and 4.0 per cent.

There are other numbers which are disconcerting: the lesson to be drawn is that the government is not spending what was promised on key schemes:

No taxes have been reduced except for the small number who have opted for the new tax regime. No indirect taxes have been reduced. There is no cut in the cruel and irrational GST rates. There is no reduction in the prices of petrol, diesel, cement, fertilizers etc. There is no cut in the numerous surcharges and cesses which are, any way, not shared with the State governments.

Who has benefited by this Budget? Certainly, not the poor. Not the youth looking desperately for jobs. Not those who have been laid off. Not the bulk of the taxpayers. Not the homemaker. Not the thinking Indians who are shocked by the growing inequality, the rise of the number of billionaires and the wealth being accumulated in the hands of the 1 per cent of the population. Certainly, not you,

This much is clear: The government is determined to push the fortunes of GIFT city, Ahmedabad, at the cost of other commercial and financial centres. The government is also determined to push the ‘new’ tax regime for which there are few takers for a variety of reasons. Besides, making the new tax regime the default option is grossly unfair and will rob the ordinary tax payer of the meagre social security that he may get under the old tax regime.

The Economic Survey listed all the headwinds that the world — and India — will face, but did not offer any solutions to face these headwinds. The Budget speech did not even acknowledge the headwinds. The government is living in its own imaginary world.

Three stark facts are acknowledged the world over :

1. World growth and world trade will slow down significantly in 2023 (for India,

2023-24).

2. Many advanced economies will go into a recession.

3. The global security situation, thanks to the Ukraine war, and other brewing conflicts, will deteriorate.

If all three materialized, what will the government do? What kind of burdens will that place on the people who are suffering owing to inflation and unemployment? There were no answers provided either in the Economic Survey or in the Budget Speech.

This is a callous Budget that has betrayed the hopes of the vast majority of the people.