The Budget 2018-19

It is well known that the big corporate groups—the Ambanis, the Adanis, the Tatas and their likes are the strongest supporters of Narendra Modi and his acolytes. So it was only expected that the latest budget would not do anything that went against their interests. This has been confirmed by the budget proposals once again, although crafty talks are there to give a somewhat different impression. Looking at the budget proposals placed by the Finance Minister Arun Jaitley, some points must strike even a casual observer. First of all, measures like raising the minimum support prices, aimed at pacifying disgruntled farmers, are an implicit admission of the adverse impact of the demonetisation move and the hasty implementation of the Goods and Services Tax (GST) on the people, especially on the farm sector. On the other hand, increases in the allocation on agriculture, farmers' welfare and rural development are only marginal. Benefits of agricultural price support have traditionally been grabbed by richer sections of farmers. The budget contains no concrete suggestion as to how this trend may be reversed. As percentage of GDP, the expenditure on agricultural and rural development, expenditure on health and central expenditure on education have actually gone down. It may be mentioned in passing that even China, with which the present government of India is constantly at loggerheads over the border question, has a public expenditure much more than that in terms of the proportion of GDP. The second point to be noted is that the corporate tax on companies having an annual turnover up to Rs 250 crore has been reduced. It is argued that with this reduction, such companies will have more investible surplus and create more jobs by making new investments. But the fact is that such companies are moving away from labour-intensive ventures and strengthening the process of jobless growth, a curse of the Indian economy in these days of neo-liberalism. It is not clear how many jobs will be created by such reduction, though such entrepreneurs may feel encouraged to continue with their work with greater enthusiasm. It is also common knowledge that many such enterprises are covertly controlled from behind by large corporates. According to the last Oxfam report, 73% of the wealth generated in the country in the last year has been cornered by the top 1% of the population. Lowering corporate taxes is certainly not the best way of reducing this staggering and dehumanising inequality. In this sense only, the budget is altogether worthless, if not for anything else.

The most talked about aspect of the budget is the proposal to provide 100 million of families with a health insurance cover of Rs 5 lakh per family a year through the ‘National Health Protection Scheme’. It is striking enough, but the fund, considering the budgetary allocation on health, is grossly inadequate, and it has not been spelled out how the government proposes to finance this gigantic scheme. Where will the premium come from? Besides, the government does not have the infrastructure to take care of so many and hence the scheme will in all probability be routed through the private sector, thus raising the cost of health care and largely eroding the benefits that are supposed to accrue through this scheme. It is also extremely doubtful if even the private sector is able to fill the gap, and it is not at all unlikely that the proposed scheme will end up as a colossal failure. Allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme has been kept at the same level in nominal terms, which implies a reduction in real terms and hence a decline in rural job creation. This is perfectly in conformity with the demand of the big corporate groups and their overt and covert ideologues for doing away with the MGNREGA altogether. The sops provided to the salaried classes in the form of standard deduction amount to practically nothing because of the rise in cesses. It is said that the budget has been framed with a view to the coming Lok Sabha polls and the approaching assembly polls in some states. Maybe. But the electoral impact of the budget is uncertain. After all, elections are not won or lost by budgets alone.

Strangely enough, the Swadeshi Jagran Manch (SJM), an affiliate of Rashtriya Swayamsevak Sangh (RSS), doesn't see any justification in the whole FDI and GDP-centric growth model much to the dismay of prime minister Modi and his cheerleaders. They are also against too much globalisation. In truth they have been criticising the policy of globalisation ever since their inception in 1991 without really making it a point of sustained campaign. Their mild dissent virtually makes no impact on the government and people at large. Under the present economic culture more FDI doesn't mean more employment. The hard fact is that SJM no longer appears to be its previous aggressive-self with street protest marches against pro-corporate and pro-multinational policies. Well, they did all the protests when Congress was in power. Even today India cannot produce mobile phone on its own. But the Modis don't miss a single opportunity to boast of multiple satellites launching in orbit. But Modi and his men in charge have nothing to worry about so long as outfits like SJM dish out harmless press statements against government policies.

Vol. 50, No.32, Feb 11 - 17, 2018