Budget shows Modi govt now has no inhibition serving interests of big corporates and crony capitalists

How does one characterize the Budget 2022-23 of the Narendra Modi government presented by the Finance Minister Nirmala Sitharaman on February 1 in Parliament? The Budget was presented when the third wave of the pandemic is not yet over, but its intensity is on the decline throughout the country. But the distress of the pandemic affected people continues and all studies so far have indicated that inequality in the Indian society has widened as the income level of the poor and the middle class has drastically gone down.

At the political level, Assembly elections are being held in five states in the country between February 10 and March 7, the results of which will be declared on March 10. It is natural that the voters in these five states have taken into account the impact of the Budget on their livelihood, which is certainly not positive. There is nothing concrete for the people at the vulnerable end of the Indian population. The Budget certainly cannot be termed populist which is generally the trend, offering some sops, in an election year.

Then how is it that Prime Minister Narendra Modi allowed a Budget to be presented which is not going to have any direct impact on millions of poor people in the five poll-bound states? It seems that the Prime Minister and his advisers are overconfident of the BJP doing well in the elections. What else explains planning for the future, spanning the so-called ‘Amrita Kaal’ of 25 years, while ignoring the distress at the present time. It is like building a swanky multi-storeyed apartment on the base of a ground floor which has many leaks.

The Prime Minister has every right to be futuristic but he ought to have taken care of some of the basics including ways to pep up public consumption in the immediate future to boost the economy on a short and medium-term basis.

Suggestions were given by leading economists for introducing a minimum basic income for the poor and simultaneously of imposing a sort of inequality tax on the super rich. Instead, the MGNREGA, the pivot of livelihood for rural poor and the public distribution system which ensures food security to the vulnerable, has been treated in a step motherly manner as if expansion of programmes for the poor is anti-growth. Meanwhile, corporate taxes have actually been cut.

The Oxfam Inequality Report on India released a week before the 20222-23 Budget has exposed in a candid manner how the two year pandemic has widened the inequality in the world including India. Specifically for India, the situation is even more grim as the present government has failed to put in place a social security system to protect the poor and the distressed, resulting in further deterioration in the livelihood of the poor.

The Budget has effectively brought down the allocation for MGNREGA to just Rs. 73,000 crore for FY 2022-23, which is even below the revised estimate of Rs. 98,000 crore in the current fiscal. This despite the fact that all recent studies have shown how MGNREGA, which was the brainchild of the Congress-led UPA govt, has been of big relief to the distressed in the rural areas during the last two years of pandemic.

The Modi government must be aware of this, but then, taking care of the poor is evidently not the priority in PM Modi’s list.

The PDS, which is a bulwark against hunger and malnutrition in rural India, has also been given a lower allocation from the revised allocation of Rs. 2,10,929 crore in 2021-22 to Rs.1,45,920 crore in 2022-23.

The big hike in the investments for infrastructure is certainly welcome, but the bigger half in India have to maintain their livelihood and their improvement in living conditions will lead to a hike in public consumption, leading to economic growth. The Modi government is, thus, aspiring for a new economy of global dimension without taking care of the minimum essentials of the livelihood of the vulnerable sections of society.

In the last eight years, the NDA government led by Narendra Modi has pursued a path that has only widened the inequalities in society and every economic crisis was taken advantage of by the rich to make gains at the cost of the poor and the lower segments of the Indian society.

This process actually intensified in the last two years of the pandemic despite continuous government announcements of sops to the distressed by the Modi government.

Starting with the sudden declaration of nationwide lockdown on March 24, 2020 in the first wave to the present third wave, the wage earners, the employees of the SMEs, the migrant labour and lakhs of employees of the private sector small companies have been languishing in abject poverty with job losses, layoffs and reduction of income.

These were the people who also suffered under the slowdown which gripped the Indian economy from 2017 onwards. But what has happened to the Indian rich during this period? Their wealth has increased to a record level while the country’s economy as a whole suffered.

Oxfam’s annual report on inequality in India has focused on the Modi government’s governance structures that promote the accumulation of wealth by a few, while failing to provide safety nets to the rest of the population.

The report also highlighted the economic impact of the COVID-19 pandemic on the rich and the poor in India. The same approach continues in the latest Budget despite so much critical mention made by different think tanks.

The Oxfam report said that by taxing just these super-rich families only 1% of their wealth, India could fund its entire vaccination programme cost of Rs 50,000 crore ($6.8 billion). “Instead, the burden of taxation in India currently rests on the shoulders of India’s middle class and the poor, and not addressing the proposal for a one-time tax on the wealthy, for COVID-19 recovery, has resulted in the government using the only other available option i.e., raising funds through indirect tax revenue which penalises the poor,” the report said.

In September 2019, before the COVID-19 pandemic, the Narendra Modi government had slashed corporate tax rates for domestic manufacturers from 30% to 22%, and for new manufacturing companies, the rate was reduced from 25% to 15%, provided they do not claim any exemptions. The government took 36 hours to implement this decision, with the help of a provision in law that empowers the PM to take a decision and get the Cabinet’s ratification later.

US-based credit ratings agency S&P Global had termed the move “credit negative”.

This corporate tax cut resulted in a loss of Rs. 1.5 lakh crore, contributing to the rise in India’s fiscal deficit. Thus, the corporates continue to extract higher benefits from the pandemic while the poor became jobless, with many dying by suicide out of desperation and distress.

The Modi government has no inhibition now in pursuing the growth path of Indian economy in the interests of the big corporates and crony capitalists. The BJP has the backing of RSS, Sangh Parivar’s hate outfits and financial muscle power.

It is now imperative for the Opposition to challenge the ruling party effectively through joint action, unity of purpose and pro-people programmes.

(IPA Service)

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