The Budget 2019-20 of the New Finance Minister

It was not at all expected that the budget prepared by a government that has the support of the corporate bourgeoisie who amassed  huge amounts of wealth by looting the resources of the nation in various ways should undertake any radical measures in the budget. But the budget has presented something that is quaintly amusing. For example, the government has vowed to make India a 5 trillion-dollar economy by the end of its present term. As the means to achieve this end, the deux ex machina is private investment as well as foreign investment. The irony is that the finance minister has not been able to satisfy the corporate bourgeoisie. The proposed reduction in corporate taxes applies only to those having a business of Rs 4 billion or less. Even if massive doses of private investment enter the field, it is impossible that the problem of unemployment will be solved, for the simple reason that the motive of private investment is profit, not employment, and in order to compete, the bourgeoisie emphasizes the subject of paring costs, mainly costs incurred in terms of wages and salaries. Now disinvestment, i.e. selling out state enterprises, is going to be accelerated, which means an attack on the lives of workers and employees. The prices of petrol and diesel are going to rise and this will hurt the common man by raising the costs of transport and prices of goods of common consumption. Another point, stressed with much fanfare, is the reduction of budget deficit. A budget deficit is not necessarily inflationary if the expenditure is productively employed. It is bad economics to assume a constant posture against budget deficit, here the hands of the IMF-World Bank continue to play. Finally, how can investment be raised to such a gigantic level that may make India a 5-trillion-dollar economy? The quantum of demand and size of the domestic market are important elements is stimulating the economy. With a relatively backward infrastructure and poor internal connectivity, it is not likely that private domestic corporate investment or foreign investment will come in massive amounts. Narendra Modi's 'Make in India' exhortations have failed miserably. Now he expects that foreign investment will come to rescue him. The budget offers no concrete suggestion for the upliftment of the Human Development Index and developing India's status in this regard. It also has no suggestion of reducing the dehumanizing inequality of income and other entitlements. Of course, the government has its own variety of nationalism or national jingoism and when it fails on the economic front, it finds it convenient to apply the short-term solution of war hysteria. A resounding victory regarding the number of seats captured at the polls, in the Indian context, does not always imply a popular mandate. Receiving 39% of total votes polled, when about 30% of the electorate do not cast their votes at all, does not entitle anyone to say that he has got the mandate of the nation and can do whatever one likes. Modi and his acolytes are obsessed with the idea of catching up with China. They do not know that in China, the PQLI (Physical Quality of Life Index) rose nearly five decades ago to a level that India is not yet able to match. Imitating China is also no solution for a number of reasons.

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Frontier
Vol. 52, No. 3, Jul 21 - 27, 2019