The full and final budget of the Government of India for the current year, 2019-20, will be presented on 5th July by the new Finance Minister, Ms. Nirmala Sitharaman. An Interim Budget was presented on 31st January by the then acting Finance Minister Piyush Goyal. This has been the general practice whenever Lok Sabha elections are held, that the new government presents the final budget in the month of July.
Starting in the middle of June, Finance Minister Sitharaman has been chairing a series of pre-budget consultation meetings with different groups of representatives of big capitalist companies and big banks. In these consultative meetings, the capitalist spokesmen put forth numerous demands.
The representatives of big banks urged the Government to lower the interest rate offered on small savings schemes such as National Saving Certificate, Public Provident Fund and Sukanya Samriddhi. They argued that 8% and 8.5% tax-free interest being offered under such schemes makes it less attractive for people to keep their savings in bank fixed deposits, which are offering 7% to 7.5% taxable interest. In other words, the capitalist money lending institutions want the government to compel people to keep more of their savings with the banks, so that they are readily available for borrowing by the big capitalist companies.
The representatives of automobile companies, Indian and foreign, asked the government to pass a law for banning passenger vehicles which are 15 years old. The aim is to compel people with old cars to buy new ones. Such a law exists in the National Capital Region of Delhi at this time. The auto capitalists want it to be extended to the rest of the country. They also want some tax “incentives” to be offered to them for shifting from petrol and deisel engines to electric engines.
Various other representatives of capitalist monopoly houses urged the government to step up public investment in infrastructure, to make up for the continuing slack in private investment. They argued that this is essential for giving a boost to the slowing economy, and must be done even at the cost of a higher level of government borrowing than envisaged in the Interim Budget.
All the demands put forward by representatives of different capitalist groups were aimed at boosting their profits, at the expense of the working people and the general interests of society.
One meeting was held with representatives of workers’ unions. The Finance Minister asked her second-in-command to chair this meeting. The representatives of workers’ unions reiterated their demands for strict implementation of minimum wages and a comprehensive unemployment insurance scheme.
It is to be noted that a circular issued by the Ministry of Finance to all other central ministries at the end of May had stated that “Allocations projected in the Interim Budget 2019-20 will not be altered”. It stated that any additional requirement of funds by any Ministry must be backed by strong justification. The meaning of this circular is that beyond the so-called “pro-people” schemes announced in January, namely the income transfer scheme for peasants and pension scheme for retired workers in the informal sector, workers and peasants cannot expect any additional allocation of central government funds on their behalf. From this it is clear that the demands of workers and peasants for enhanced public procurement and public distribution is not going to receive any attention. Nor will the demand for comprehensive unemployment insurance. They will continue to remain unfulfilled.
By holding consultations with representatives of capitalists as well as those of workers’ unions, the Government is trying to create the impression that it is treating all classes of society equally. This is a fraud. It is a false impression. There is no equality between the exploiters and the exploited.
The capitalist monopoly houses are leaders of the ruling capitalist class. They provide the bulk of the money required to win elections. The party which gets to form the government is committed to fulfill the demands of the monopoly houses. The BJP government headed by Modi is no exception. It is not committed to fulfill any of the just and longstanding demands of workers and peasants.
The real purpose of pre-budget consultations are to provide a forum for monopoly capitalists, Indian and foreign, to formally convey their most urgent demands to the Finance Minister and team of officials involved in formulating the budget. It is in addition to informal consultation between ministers and influential monopoly capitalists, which goes on all the time, but behind the curtain.