Union Budget 2021-22

It was not at all expected that the budget of 2021-22 would try to address the basic issues facing the economy, specially dehumanising inequality and serious unemployment. But it was certain that the government was faced with a paucity of resources. Over the last few years, the income and wealth of billionaires have risen phenomenally. Even during the acute Covid-19 period, these billionaires registered a growth of 35% of their income, while there was an immense contraction of the economy. Last year, the government announced a reduction of corporate taxes by 20%, which failed to raise the level of investment, but succeeded in enhancing inequality. In this budget, cesses have been imposed on petrol and diesel, as well as commodities like onion, and disinvestment of profitable state assets has been employed as a measure to raise funds. But the super-rich have been left untouched, because Narendra Modi and his party are afraid of making them pay at least some of the costs of rebuilding the economy otherwise severely affected by Corona virus pandemic. Taxing the billionaires and other persons who may be dubbed super-rich would have fetched a huge amount of resources. But that is repugnant to the outlook of Modi and his Finance Minister Nirmala Sitaraman who incidentally presented her third budget that hardly marks a shift in the economic stance of the saffron establishment. Imposing cesses on petrol and diesel, and selling concerns like the LIC and two nationalised banks to private players are far more easier ways of raising resources, even if they lead to price rise and thus adds to the burden of the poor and underprivileged. The cesses are not shared with states and they are permanent. If anything it will hasten the process of whatever remains of federalism. After all, the risk of incurring the displeasure of the corporate lobby and other sections of the super-rich is not there in Sitaraman's approach. It is no wonder that the cheerleaders of the global big business are happy and the Sensex has risen significantly. Boasting of an expected rate of growth of the GDP by 11% only reveals an obsession with the rate of growth as the sole measure of progress and prosperity. Even that is misleading because, taking into account the extent of contraction during the current financial year, the net rate of growth will be very small.

About the much-vaunted emphasis on infrastructure, it must not be ignored that building up a proper rural infrastructure is the key to the reduction of rural unemployment. The Covid-19 pandemic forced the government to spend Rs 1.115 trillion on the MGNREGA. But this budget has reduced the allocation to just Rs 0.73 trillion. In other words the Modi government is least interested in developing a proper rural infrastructure that could have created millions of workdays for the rural population. Any person familiar with the rural situation can visualise the endemic nature of the irregularity of rural unemployment. But the government is trying to revive its earlier plan of doing away with the MGNREGA. They don't bother about what is happening to the marginalised.

Another point at issue is health for all. In relation to the assumed real expenditure on health in the current financial year, the allocation in this budget is less, and this in a situation when a large vaccination programme to fight Covid-19 has started.

Ever since the global meltdown of 2008 the role of the state sector has become increasingly important in the world, even if the class natures of the states are capitalist, at least non-socialist. But India is witnessing a different picture. Here the juggernaut of neo-liberalism moves apace. Manmohan Singh initiated it. But he practised it haltingly. Now Narendra Modi has cast off all pretences while vigorously selling the opium of Ram, war hysteria, anti-Pak jingoism and all that to divert public attention. This is accompanied by suppressing all dissent by of brute force, false cases and other tricks. The proposed budget for 2021-22 is clearly a bag of such 'tricks' although they seem to represent a continuity.


Vol. 53, No. 33, Feb 14 - 20, 2021