Slashing subsidies unkindest cut in Budget; Centre forgot poor, but they will remember: Chidambaram

Senior Congress leader and former Union Finance Minister P Chidambaram has slammed the Union Budget presented in Parliament as anti-poor, with not a single measure taken to alleviate their sufferings due to the pandemic.

In a press release issued on Tuesday, Chidambaram said that the government was behaving and acting as though it is on the right path and has delivered on the issues that matter to the common people, which was false. “This is also bull-headed obduracy. This also reflects the government’s contemptuous disregard of the burdens and sufferings of the people,” he said.

“I was astonished that the Finance Minister was outlining a plan for the next 25 years, which she called the Amrit Kaal! The government seems to believe that the present does not need any attention and the people living in the present can be asked to wait patiently until the Amrit Kaal dawns. This is nothing but mocking the people of India, especially the poor and the deprived,” he added.

“There was not a word in the speech about any cash assistance to the very poor who have been pushed into extreme poverty and suffered immensely during the last two years; not a word for those who had lost their jobs; not a word about creating jobs for those whose education stopped at some stage at the school level; not a word about reviving MSMEs that had shut down; not a word about distributing more food to combat malnutrition and hunger; not a word about cutting indirect taxes, especially GST, to contain inflation and bring down the prices of goods; and not a word about giving tax relief to the tax-paying middle class or the tax-bearing head of a household,” Chidambaram said.

“By any standard, today’s budget speech was the most capitalist speech ever read by a Finance Minister. The FM has mastered the jargon of capitalist economics. Read her speech again: count the number of times she used the words digital, portal, IT-based, paperless, database, ecosystem, global, atmanirbhar. The word ‘poor’ occurs twice in paragraph 6, and we thank the FM for remembering that there are poor people in this country,” he said.

Chidambaram pointed out that the total subsidy bill had been cut by a humongous 27 per cent. “This is the most unkindest cut in this budget. The FM may have forgotten the poor, but the poor have long memories,” he said.

Here is the full text of the press release:

When the Finance Minister and officials of the Ministry of Finance sat down to write the Budget speech, what ought to have stared them in the face were the following facts:

> India’s economy has not recovered yet to the level in the pre-pandemic year of 2019-20;

> In the last two years, millions of jobs have been lost, some perhaps forever;

> Approximately, 60 lakh MSMEs were closed down;

> In the two pandemic years, 84 per cent of households have suffered a loss of income;

> Per capita income has declined from Rs 1,08,645 in 2019-20 to Rs 1,07,801 in 2021-22 (or even less);

> Per capita expenditure has declined from Rs 62,056 in 2019-20 to Rs 59,043 in 2021-22;

> An estimated 4.6 crore people have been pushed into extreme poverty;

> Huge learning loss among school children, especially children who live in rural India and are enrolled in government schools;

> Malnutrition, stunting and wasting among children has increased and India’s rank in the Global Hunger Index has fallen to 101 (out of 116 countries);

> The unemployment rates have reached 8.2 per cent for Urban and 5.8 per cent for rural workers;

> WPI Inflation is estimated at 12 per cent and CPI inflation at 5.3 per cent.

After the Budget was presented this morning, we asked ourselves what has the Budget done to address any of these grave challenges. The blunt answer is: NOTHING.

Obdurate and callous

The government behaves and acts as though it is on the right path and has delivered on the issues that matter to the common people. This is false. This is also bull-headed obduracy. This also reflects the government’s contemptuous disregard of the burdens and sufferings of the people.

I was astonished that the Finance Minister was outlining a plan for the next 25 years, which she called the Amrit Kaal! The government seems to believe that the present does not need any attention and the people living in the present can be asked to wait patiently until the Amrit Kaal dawns. This is nothing but mocking the people of India, especially the poor and the deprived.

There was not a word in the speech about any cash assistance to the very poor who have been pushed into extreme poverty and suffered immensely during the last two years; not a word for those who had lost their jobs; not a word about creating jobs for those whose education stopped at some stage at the school level; not a word about reviving MSMEs that had shut down; not a word about distributing more food to combat malnutrition and hunger; not a word about cutting indirect taxes, especially GST, to contain inflation and bring down the prices of goods; and not a word about giving tax relief to the tax-paying middle class or the tax-bearing head of a household.

By any standard, today’s budget speech was the most capitalist speech ever read by a Finance Minister. The FM has mastered the jargon of capitalist economics.

Read her speech again: count the number of times she used the words digital, portal, IT-based, paperless, database, ecosystem, global, atmanirbhar. The word ‘poor’ occurs twice in paragraph 6, and we thank the FM for remembering that there are poor people in this country.

Welfare thrown to the winds

There are worrying macro-economic indicators: top of the list is that the fiscal deficit (FD) for 2021-22 has overshot the target of 6.8 per cent and is estimated at 6.9 per cent. For next year, it will be 6.4 per cent. That is an insufficient correction if the goal is to reach 4 per cent three years hence by 2025-26. The financing of the FD is also a matter of concern. 70 per cent of the FD in 2022-23 will be financed by market borrowing as against 55 per cent in the current year, crowding out private sector borrowing.

The worry from the welfare angle is greater. Every key subsidy has been slashed:

The total subsidy bill has been cut by a humongous 27 per cent. This is the “most unkindest cut” in this budget. The FM may have forgotten the poor but the poor have long memories.

The next worry is about raising more resources. The FM is betting on heavy market borrowing and increase in Corporate tax (+85,000 cr), Personal Income tax (+85,000 cr) and GST (+1,05,000 cr). There is not a word about raising more resources from the rich, especially the very, very rich 142 persons whose wealth in the last two years has increased from Rs 23,14,000 crore to Rs 53,16,000 crore.

You will ask me, no doubt, if there is not any aspect of the budget that I welcome. There is a short list of three:

1. The FM has promised capital expenditure of Rs 7,50,000 crore in 2022-23 as against the RE of Rs 6,02,711 crore in 2021-22.

2. The FM has promised an additional borrowing of Rs 1,00,000 crore to the States free of interest.

3. The budget speech was mercifully short at 1 hour and 30 minutes.

Parliament may vote this Budget because the ruling party has a brute majority in the Lok Sabha, but the people will reject this capitalist Budget.