Created on Feb 28, 2013 Date: 28.2.2013
Aam
Aadmi of the country has reasons to feel disappointed, if not cheated,
with the Union Budget 2013-14 presented by the ruling coalition that
came to power in his name. All over the country, cutting across gender,
regions, sectors, classes and the urban/rural divide, the aam aadami
faces a crisis of economic opportunity and livelihood. She has suffered
from a long period of high inflation, especially in food items. She has
long suffered from growth that did not deliver more jobs, a decline in
growth now threatens to cut down on existing livelihood opportunities.
All the basic amenities that a citizen can expect from democratic
governance – public provisions for heath, education and social security –
are beyond the reach of the Aam Aadami. Rampant corruption from top to
the bottom eats into whatever little could trickle down to them.
The
Union Budget presented by the Finance Minister is a clever attempt to
mislead the public in an election year. The Finance Minister’s speech
offers little remedy for the key problems facing the Indian economy that
he himself begins by acknowledging: slowdown of growth, rising fiscal
deficit and current account deficit. The current crisis required the
government to stimulate domestic investment by encouraging consumption
from below; instead the FM remained focused on Foreign investors.
Controlling inflation required expansion of PDS and reinforced subsidies
on energy and focus on increasing agricultural output in pulses and
oilseeds; instead the government has relied on hope. Meeting the demands
and aspirations of the people required substantial and real increase in
social sector expenditure, instead the government has resorted to
statistical tricks and gimmicks rather than put its money where its
mouth is. Nor is there any evidence of the government being serious
about better usage and monitoring of the funds spent on these public
provisions. Shockingly, the government has not come up with any measure
to curb corruption and control the parallel black economy that the
public is so visibly exercised about.
An
analysis of the summary statistics of the budget make it clear that
there is little connect between the rhetoric of the budget and its
actual numbers. In his speech the FM claimed that the government has
not spared money for welfare schemes; the fact is that the UPA has
drastically cut down on most of the key welfare schemes in the current
year itself. The FM’s claims about increasing outlays in key sectors is a
clear case of statistical fudging; the ‘increase’ claimed by the FM is
with reference to the drastically reduced expenditure (Revised
Estimates). In most cases the rise in budget allocations is barely
enough to cover inflation. In real terms there is no increase in
spending for the aam aadami. The FM has also used the age old devise of
distracting public attention with the help of some gimmicks that cost
very little.
The
government needed to increase tax revenue, which has actually fallen by
4% in the current year over what was budgeted; similar false
assumptions seem to driving the current projections of 20% increase in
revenue. The much talked about move to tax the rich turned out to be a
damp squib, for it would affect only 42,000 super rich and bring very
small gains for the country. This small gain would be more than made up
by the generous increase in the tax exemption, mostly for the well off
and the corporate. The amount of ‘Tax foregone’ has gone up from Rs.
5,33,000 crores to Rs. 5,73,000 crores. There is no change in the
capital gains regime to curb speculative gains activity in the stock
market.The budget gives no indication of a political will to curb black
income generation in the economy. The deferment of implementation of
GARR to 2016 is another example of the lack of political will to curb
tax avoidance. There is nothing in the budget to do away with
non-transparent instruments like Participatory Notes or to reformulate
the double taxation treaties with ‘tax heavens’ and black economy
conduits.
Most
of the schemes meant for the aam aadmi have remained static or have in
fact gone down in real terms or even compared to the actual expenditure
in the year before. The central Plan size has come down from Rs.
6,51,000 crore in the Budget last year to the Revised estimate of
5,56,000 crores, huge shortfall of Rs. 96,000 crores. In 2012-13
expenditure on agriculture and allied activities, rural development,
irrigation and flood control and welfare of ST has actually gone down
compared to the actual expenditure of the previous year. A similar
comparison of the expenditure on health and education shows a marginal
increase that barely keeps pace with inflation. The total expenditure on
social services has fallen short by Rs. 23,000 crores compared to the
budgeted allocations. This fact acquires significance for much of the
social sector expenditure takes place at the level of the states where
the transfer has been cut down by as much as 10,000 crores.
It
is unfortunate that even the opposition has not drawn the country’s
attention to these statistical lies and inattention to the needs of the
aam aadmi. Aam Aadmi Party resolves to take this collective conspiracy
of the political establishment to the people’s court and place the
concerns of aam admi at the heart of our economic policy.
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