Modi’s Budget To Deepen Slowdown In Economy

By Chidambaram N

The Union Budget 2020-21 said to have been prepared under the tutelage of Prime Minister Narndra Modi and presented by Union finance minister Nirmala Sitharaman on February 1, 2020 to say the least is full of disincentives that will only drag down the consumer which in turn will discourage fresh investments. Is it that the RSS-controlled BJP government still refusing to acknowledge and accept the deepening slowdown? It is only the other day somebody seriously remarked that ‘boasting is usually only a sigh of lack of confidence’. One can imagine then the plight of the country and people when policy-makers are afflicted with both boasting and arrogance!

The longest budget speech ever-made after, as claimed the finance minister herself, the longest exercise of consultations and discussions focuses little on reviving the economy, accelerating the growth momentum, promoting higher spending and fresh investment, creating employment and on boosting social sector incentives. In fact the government the Communist Party of India general secretary D Raja has vehemently pointed with a heavy heart that ‘the current budget is a shameless declaration that the government is abdicating all its responsibilities …This budget is a budget for privatisation and everything is to be done using using PPP route including railways, health and infrastructure.’

Let us look at some of the proposals that reflect the mindset of the government that forces it to look the other way when the people at large are still suffering from demonetisation and faulty implementation of Goods and Services Tax (GST). Even the diversionary tactics the government is resorting to is not going to bring any solace to the desperate rulers out to implement it hidden agenda full of divisive, anti-people and anti-constitutional moves.

Disinvestment target enhanced despite failures The budget, which has totally failed to stimulate spending and investment, is now eyeing on a higher proceeds of Rs 2.1 lakh crore from selling the household silver. It may be noted here the amount is nearly three times the target set for the current financial year namely 2019- 20. The government has till date not succeeded in amassing the targeted amount.

Even with all the stretch of our imagination, the government is certainly going to fail in achieving the target with hardly a few weeks left for the financial year to end.

LIC has become the latest piggyback: The finance minister has announced plans for an initial offering in the Life Insurance Corporation of India. As soon as the announcements came stiff opposition came from not only opposition parties including CPI, central trade unions along with AITUC but also from the LIC Employees Federation and other sister unions of LIC employees and agents. The budget has also plans to corporatize and list major state-owned port. Adani will definitely be happier and must be on the look out to grab shares in the port set to be listed. Money – staved government is also planning to monetize the built-up highways.

Apart from the loot of the national assets, even the natural assets are going to be made dearer for the people. The customs duty on many items including on dairy products, footwear, household appliances, etc, is being raised. The fertilizer subsidy is going to be reduced from almost Rs 80,000 crore in 2019-20 to Rs 71,309 crore in 2020- 21 which is going to further aggravate the rural crisis. The worst is the state ofaffairs regarding the food subsidy. The government which had provided Rs 1.84 lakh crore finally brought it down to 1.09 crore in the current financial year and the budgetary proposal now for 2020-21 the food subsidy has been raised merely to 1.16lakh crore.

According to an expert, the budget proposals ‘lacks the vision to craft a policy and allocate suitable funds to address the myriad problems of rural India. Rural India’s challenges have become sharply manifest in the high proportion of land that is uncultivated, the decline in food crops, and the devastation wrought by droughts and floods.’

It is further found that despite farmers being annadadas no real allocations were announced to improve the overall living and livelihood opportunities of a majority of farmers. The farmers’ bodies and women activists are rightly accusing the government of ignoring the positive impact of MGNREGS by withholding the arrears to various states and also by lowering the allocations.

The government has in fact failed to raise significantly its spending at a time when the situation demands a more proactive, pro-people thrust to allocations. To sum up the Union Budget fails to provide any kind of stimulus for the revival of consumer or investment demand. Nor it has been able contain the deficits which has forced the RBI to refrain from any more cuts in repo rates. The apex bank seems to have become wiser. Let us wait for the final outcome as the Modi government is notorious for revisions and recalls.(IPA Service)