Budget 2019-20: An Election Jumla

Budget 2019-20: An Election Jumla

Date: Friday, February 1, 2019

Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

The Modi government has now become famous for supressing and manipulating data and offering jumlas to the people. The Interim Budget for 2019-20 is yet another exercise in the same vein. The acting Finance Minister made tall claims during his speech about the record of the Modi government and promises of a rosy future for all Indians – which was a cruel joke played on the suffering people of the country.

The Budget presented before Parliament today cannot be the final budget for this year because the government presenting it, and the Lok Sabha considering it, will both cease to exist less than two months into the financial year to which the budget pertains. The CPIM would like to point out that the final picture of the measures for revenue mobilization and of expenditure allocations for the financial year 2019-20 will take shape only after the people of the country have spoken their mind through the elections to the 17^th Lok Sabha. It is a testimony to the BJP’s fear and desperation about what that verdict of the people might be that it has sought to use what is an interim budget to make promises that are not for it to make.

The figures available for April-November show that gross revenues from Central taxes in 2018-19 increased by barely 7.1 per cent over the same period in the previous year. However, the revised estimates for 2018-19 show an estimated 17 per cent growth in revenues over actuals for 2017-18!  Even after this, revenues are slotted to be Rs. 23,067 crores less than the Budget Estimates announced a year ago. In a repeat of what it did last year, the Government has put inflated revenue figures for both income tax as well as GST revenues. Income tax revenues are destined to be at least Rs. 50,000 crores below the revised estimates. The Revised Estimates of Central GST Revenues is already below the Budget Estimates by a whopping 1 lakh crores – and the collection figures up to January 2019 indicate that even this is an unrealistic figure. Clearly, the Government is manipulating the figures lest the lies it has peddled about the consequences of demonetization and its tax reform measures are caught out. Despite this revenue shortfall, the government continues with the exemption of wealth tax introduced by the Modi government in 2016. The rich people owning the second house are also tax exempted. Clearly, the Modi government is cruelly following its logic of squeezing the poor and enriching the rich further.

Attack on State Governments

What is even more shocking is that the burden of lesser tax revenues is being sought to be transferred to states. The net revenues of the Central Government in 2018-19 have been kept at a slightly higher level than in the Budget Estimates – a cut of Rs. 26, 639 crores is therefore being applied to the state’s share in Central Taxes. Similarly, the transfer to the GST Compensation fund has been cut by Rs. 38,265 crores compared to the Budget Estimates even though the GST revenue shortfall showing up in the Centre’s own budget would also be hitting State Government revenues. In other words, it appears that the Union Government is shoring up its fiscal situation at the expense of State Governments – so much for cooperative federalism.

Jumlas

Farmers: Despite the claim of making a new allocation of Rs, 20000 crores for the income support scheme for farmers to implement it from 1 December 2018, the Revised Estimates of total expenditures for 2018-19 do not exceed the Budget estimates by even that much. A curtailment of expenditure on other heads, in particular the transfer to the GST Compensation fund, is therefore where this allocation is coming from. Even this allocation and the scheme is a fraud that is being played out – what else can one call a scheme which promises a farmer household of 4 people an income ‘support’ of Rs. 4 per person per day? Having been directly responsible for aggravating agrarian distress which has destroyed farmers’ incomes by much more than that, the Government is covering up for the betrayal of its promise of a MSP one and a half times the production costs. 

The pension scheme: Pradhan Mantri Shram-Yogi Mandhan – is another such jumla, promising a pension of a measly Rs. 3000 a month after 32 years of a person contributing Rupees 100 every month – what does this say about what is the economic status the Modi government expects the supposed beneficiaries to have after more than three decades? And what does the government have to commit itself to today for this great ‘promise’? The ‘royal’ sum of Rs. 500 crores which in addition would not be received by the beneficiary today but perhaps go to some insurance company or pension fund.

Employment: The Acting Finance Minister while talking about the economy situation avoided any mention of the NSSO data that would have caught out the claim that the job seekers have become job creators leading to significant growth of employment. Of course the employment seekers have to become employment creators – not because government policies have enabled them, but because these policies have dried up the jobs and people have to find some way to survive. This budget has put an official stamp on “pakoda” logic.

The Union Budget for 2019-20 is therefore yet another reflection of the bankruptcy of the Modi Government. No amount of spin can, however, remove the distress that farmers feel or the poverty and joblessness people actually experience.  This grim reality will assert itself in the 2019 electoral verdict.