Mainstream, VOL LIII, No 13, March 21, 2015
UNION BUDGET 2015-16: Analysing the Estimated Budget: Where is the Plan for the Most Marginalised?
A Short Review by Delhi Forum
Sunday 22 March 2015
The Union Budget is prepared to execute the state policy and constitutional mandate of a sovereign republic. The Finance Minister leads the budgeting process and its control while the citizens develop an understanding over it according to the atmosphere created by the media and how the political parties project it. However, there exists differences in the opinions of the media, scholars, activists, NGOs, corporates and unemployed depending on how they have been impacted by the Budget. In its endeavour to strengthen the people’s movements for their rights over land, water, forests, the Delhi Forum seeks to analyse the Budget from the lens of the people who are most marginalised and have been excluded from participating in this process of ‘development’. Historically, it is for the first time that the Plan Budget has been reduced and we feel the need to question the government for stepping back from playing the role of a welfare state.
The Budget presented on the morning of February 28, 2015 was quite an event this time. The presence of a new government at the Centre, after the 10-year rule of the UPA came to an end, made everyone sit in front of the TV and listen to the wise words of Arun Jaitley very intently. The presentation, however, was not much different from what the previous government had already said and done in its own tenure because even this time too, the Budget tilted in favour of the rich and went against the marginalised sections of the society.
The Budget is largely in line with the pro- corporate and anti-poor stance that the NDA has been following. After pushing for various ordinances in the past few months which will invariably favour the corporates, it was in fact essential for the government to push for reduction of corporate tax so as to supplement its scheme fully. While it is planning to make a law to tab black money, it has seen to it that more profits occur to the wealthiest in the form of reduced taxation.
Underestimation of Disadvantages to the Poor
In our economy where more and more people are getting employed within the informal sector, not much has in fact been done to increase social security measures like health, education or to improve the living conditions of the poor by investing in housing. What we in fact see is the reduction in allocations to some very key Ministries which are responsible for imple-menting policies for the marginalised sections.
It is the first time when the Plan Budget of the Union of India is reducedfrom Rs 5,75,000 crores (FY 2014-15) to Rs 4,65,277 crores (2015-16). It is a reduction by Rs 1,09,723 crores. The reduction in the Plan Budget essentially implies that the government has consciously decided to spend less for the betterment of the people.
While this year the entire Plan Budget has been reduced, in the last two years a huge amount of the Plan Budget remained unutilised. In the financial year 2012-13, the Plan Budget, that is, the amount earmarked to be spent on public work and schemes was Rs 5,21,025 crores while the actual utilisation was Rs 4,13,625 crores. Hence, an amount of Rs 1,07,400 crores (roughly 20 per cent of the Plan Budget) which was supposed to be spent on development schemes for the people, remained locked and untouched in the bank vaults. Similarly, in the financial year 2013-14, the Plan Budget was Rs 5,55,322 crores whereas utilisation was just Rs 4,53,327 crores, that is, Rs 1,01,995 crores (roughly 18 per cent) remained unutilised. These figures indicate that the government has been failing continuously in spending money meant for development of the people and this raises a serious question over its political will towards reducing inequalities in this country.
From the Budget documents we can see the programmes where the Plan Budget size this reduced. The allocation for SC/ST is reduced from Rs 82,935 crores (FY 2014-15) to Rs 50,831 crores (total reduction by Rs 32,104 crores). Similarly the Plan size of the Department of Animal Husbandry, Dairying and Fisheries is reduced by Rs 683 crores, reduction in the Plan size of the Department of Land Resourcesis Rs 2122 crores. The Budget of the Ministry of Textiles is reduced by Rs 1308 crores. Major reductions are given in Table 1.
Department of Fertilisers 100 73,000 50 72,998 50
Taking a look at some of the key industries where mostly workers in traditional livelihoods are employed, we find that almost all Ministries such as the Fisheries, Textiles, Animal Husbandry have received a lower share in the Budget this time with the only exception being in the Handloom sector where the Plan size and non-Plan size have increased by Rs 55 crores and Rs 7.49 crores respectively.
There is total reduction of Rs 682 crores (31 per cent) in the Plan Budget of the Department of Animal Husbandry, Dairies and Fisheries as compared to the Plan Budget of FY 2014-15. But reduction in the Plan size of Blue Revolution is only two per cent (Rs 11.87 crores). The traditional Fishworkers have been constantly sidelined, first through introduction of exploitative policies like those suggested in the Meena Kumari Committee report and then by allocating lesser funds in the Budget. They have been constantly struggling to survive the competition from foreign vessels and the encroachment of their sea shores by the huge commercial tourism industry.
What is noteworthy is that while there is total reduction in the Plan Budget of the Textiles Ministry of Rs 1308 crores, there is an increase in the Plan and Non-Plan Budget of the Handloom sector. The handloom weavers have since the past one year indulged in intense advocacy and research towards getting more stake in the Budget through constant monitoring of the Budget allocated to them.
Looking at trade-offs between Corporates and Public
In the Budget 2015-16, the government has reduced the corporate tax from 30 per cent to 25 per cent along with an increase in the service tax by two per cent. However, it needs to be seen how this step cleverly leads to and has always been leading to shifting the financial burden (in terms of taxation) onto the larger public while providing humongous benefits to a few corporates.
Let us look at the data from 2013-14 where we try to make sense of the costs and benefits accruing to 3,10,716 corporate companies on one end and the rest of the population (henceforth mentioned as public) on the other:
In Table 4, the figures marked in red indicate the contrast in costs and benefits accruing to the corporates vs the public. While the government is spending merely Rs 4,53,327 crores (P) on the larger public it is collecting taxes as high as Rs 6,48, 097 crores (TP) from them. On the other hand, while it is spending as high as Rs 5,72,923 crores (RF, that is, the amount of tax it did not collect from the corporates), it is collecting just Rs 3,68,851 crores (CT) as tax from them. While the tax collected from the public is almost twice of what’s collected from corporates, the amount that it is ready to spend on the corporates is disproportionately much more than what it is willing to allocate for spending on the public. What if within the same Budget, the corporate tax was further reduced as it has happened this year?
Another thing that’s important to note is that giving tax exemptions to corporates leads to huge loss in revenues as the profits are quite large. Also, the amount spent on corporates is not just restricted to forgoing revenues but also includes other benefits like subsidies in consumption of other resources like land, water, electricity. Hence, the amount of money that the government actually spends for the corporates is much more than the mere forgone revenues. In fact, it can be added that the labour reforms initiated by the government, wherein contrac-tual form of labour is being promoted, is also a way of making the human resource cheaper for the corporates to use and afford.
We may also see that Budget formation and its implementation has various components. From the eight years of Budget allocations given in Table 5, it is clear that allocation in each component is increasing—Plan, Non-Plan, GDP, Revenue Forgone, Interest Payment and Fiscal Deficit. The efforts at controlling these components are not seen in the Budget Estimates in any of the financial years. The GDP should grow, and therefore the Budget size should grow. But growth in revenue foregone, interest payment and fiscal deficit are not the indicator of develop-ment at all. In fact, on one hand all such components are increasing and on the other corporates are being made to contribute even lesser to cover such costs and more is being paid by the public.
A rosy picture has been painted by the NDA by announcing the words like ‘development’ and ‘infrastructure’. The infrastructure such as the roads, highways, railways are not so much being made for the poor but for serving the interests of the corporates who need these linkages to enter the remotest of the areas and capture maximum resources. Infrastructure development should focus on serving the poor and no highway or industrial corridor shall be of any use to him as much as a road constructed in his village. While the irrigation facilities need to be spent on, when will the government begin to allocate land to the landless?
The rant of Swachh Bharat is doing the rounds everywhere but the most marginalised communities, which have been made to keep the country clean since generations, have been provided a lower share in this Plan Budget and no discussion to take them out of this servitude has ever been initiated.
What is needed is not to just read the figures and numbers in the Budget but to understand the ideology on which the brahmanical and capitalist government is functioning so as not to get caught in the web of words but be able to make a clear judgment on its plans and policies.