Union Budget 2014-15

Continuing with the capital-centric approach in spite of “people’s verdict for a change”

Presenting the budget of the Government of India for the fiscal year 2014-15, Union Finance Minister Shri Arun Jaitley began his speech in Parliament on 10th July with the following words: “The people of India have decisively voted for a change.

Continuing with the capital-centric approach in spite of “people’s verdict for a change”

Presenting the budget of the Government of India for the fiscal year 2014-15, Union Finance Minister Shri Arun Jaitley began his speech in Parliament on 10th July with the following words: “The people of India have decisively voted for a change. The verdict represents the exasperation of the people with the status quo.” However, the budget presented looks almost exactly like the previous year’s budget that was presented by Shri Chidambaram of Congress Party.

The major part of expenditure will continue to be on unproductive channels of enriching the capitalists, such as the payment of interest at commercial rates to the money-lending institutions, spending on purchase of armaments, deployment of armed forces against the people of our own country, etc. Interest payments, defence and paramilitary spending together used up 61.7% of the total revenues of Government of India in 2013-14. This ratio is estimated at 60.1% in 2014-15. The difference is less than “unnees bees ka farak”.

The budget estimate of total expenditure for 2014-15 is 7.8% higher than the previous year’s budget estimate. This is less than the rate of inflation, implying that there is no growth in real terms. Besides the unproductive drain on account of interest and defence, the only real increases in budget allocations are concentrated in the urban development, road transport and irrigation sectors. Education, health, drinking water and sanitation, women and child development have all received lower allocations than last year, adjusting for inflation.

The target for total revenue is 12.8% higher than in the previous year. As before, the major part of this revenue will be squeezed out of the working class and the entire people, through personal income taxation and indirect taxation respectively. At the same time, thousands of crores of rupees of tax revenue will continue to be foregone as a result of so-called incentives to capitalist investors.

The Finance Minister made several policy announcements while presenting the budget, thereby fulfilling the demands of different sections of capitalists. He announced an increase in the limit of ownership by foreign capital investors from 26% to 49% in the sectors of defence production and insurance. He announced a long list of tax incentives and hand-outs to capitalists in the textiles, auto, real estate and several other sectors. He also announced a higher privatisation target of Rs. 63,000 crore, compared to the target of Rs. 55,000 crore and actual realisation of around Rs. 25,000 crore in 2013-14.

The fact that Jaitley’s budget looks so similar to Chidambaram’s budget shows that the replacement of Congress Party by BJP at the helm has not changed the class character of the State and of public policy, including the Union Budget. The State remains an instrument for redistributing incomes in favour of the big capitalists and money-lending institutions, at the expense of the toiling majority of people, while pretending to be in the service of all classes of people.

Indian political theory, or raj dharma, holds that it is the duty of the raja to ensure sukh (prosperity) and raksha (protection) for all members of the praja. The BJP-led Modi government, like the Congress Party-led Manmohan Singh government, is guided by the capital-centric approach to formulating a budget, where public expenditure and revenue decisions are all geared to maximise capitalist profits. It is in complete violation of the principles of Indian raj dharma.

Even the order in which different aspects of the annual budget are presented reveals the class nature of the State. A government that is responsible to all citizens would begin its budget calculations from assessing what has to be delivered to the people, how much it would cost and then figure out how the revenues can be raised to finance the same. The deficit, or the difference between expenditure and revenue, if any, would be derived at the end.

A government that is responsible to the capitalist class and its money-lending institutions begins by first setting the deficit target. It is a reflection of the fact that the government considers it to be essential and of highest priority to be in the good books of international finance capital. A government must do whatever it takes to be rated by the global agencies as “creditworthy”. Every other interest is subordinated to this requirement to be creditworthy.

Starting from a deficit target acceptable to the big capitalists, it then estimates likely growth in revenues, to arrive at a limit on total expenditure. Within that limit, the exorbitant claims of the money-lending institutions and arms suppliers are first met, after which there is too little left to spend on education, health and other basic needs of the toiling majority of our people.

The working class cannot and must not accept this capital-centric approach to public policy and budget formulation. We must rally the toiling peasants and other exploited and oppressed masses of people to fight for the principle that the State is duty bound to ensure prosperity and protection for all citizens. This must be the central goal of public policy and the budget. This is the human-centric approach which must replace the capital-centric approach.

Our goal is to replace the rule of the bourgeoisie by the rule of the working class in alliance with the peasants and all the oppressed. The working class must lead the masses of people to establish a State that would ensure prosperity and protection for all citizens and systematically eliminate all forms of exploitation and all class and caste divisions in society. With this strategic aim, we must demand immediate measures from those in power today, which are consistent with the human-centric orientation we want to establish.

We must demand an immediate halt to the drain of public funds to satisfy capitalist greed, in the form of debt service payments, payments for arms and armaments, tax holidays for investors, etc. We must demand an immediate moratorium on interest payments to profit-seeking financial institutions. We must demand the cancellation of expensive arms deals. Such measures will free up adequate resources for addressing the need for providing education, health and other essential public goods and services for all.

We must demand a halt to privatisation of public property and its replacement by a policy of nationalisation and socialisation of the means of production and exchange, starting immediately with banking, insurance and large-scale trade.

We must demand and fight for these immediate measures as part of the struggle to change the orientation of the economy and public policy, from being capital-centric to being human-centric.

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