Union Budget 2015 – Achhe Din Kiske Liye?

The Union Budget 2015, presented by Finance Minister Jaitley on 28 Feb 2015, has clearly shown that the economic policies, direction and thrust of the BJP-led NDA government are no different from that of the Congress party. The budget presented by Modi government in 2014, soon after BJP came into power at the Centre, too, was identical to the interim budget presented by the UPA in Feb 2014.

Under the garb of the slogan “Sabke Saath Sabka Vikas”, the robbing of the working people to enrich the capitalists is continued in the 2015 Union budget of the Modi government. Like the previous Congress-led government, the present BJP-led government is acting in the interests of Indian and foreign monopoly capitalists.  The Union Budget for 2015-16 aims to expand the space for private companies by cutting back on the already inadequate provision of public education, health and other social services.  At the same time, it aims to expand public investment in rail and road infrastructure so as to reduce the average cost of transporting goods within the country.  This is seen as one of the essential conditions for attracting the biggest capitalists of the world to invest their capital in India. 

The focus of the budget is to make India “investment friendly” for Indian and foreign capitalists. This simply means that the Modi government will help the capitalists to earn profits higher than in other countries, to pay as little tax as possible, to allow them to bring and take out the capital without any restrictions. It is in this context that stated thrust of the Modi government budget is to improve the “ease of doing business in India”. This means that the government will ensure further liberalization of labour laws, dilute safety regulations, enable the acquisition of land without any qualification of obtaining consent or time-bound resettlement and rehabilitation of affected people, remove restrictions on closing of factories, make available infrastructure, etc. Giving the slogan of “make in India”, it is claiming that growth is possible only when capitalists are secured maximum profits without any restrictions. It has already taken several steps to liberalise labour laws in the interests of capitalists both Indian and foreign.

Despite the numerous incentives and relaxations in the interests of finance capital, announced by the Modi government since coming to power, neither Indian nor foreign capitalists have come forward to risk their capital for creating new production capacities. They know that working people have little savings to spend on buying new goods. They have now convinced the Modi government that the state should incur more debt to finance investments in infrastructure that private capital needs. Their demand is that the government should not cut its expenditure for the time being, as demanded by foreign rating agencies. The government has therefore agreed to keep the fiscal deficit larger than envisaged earlier in this budget.

At the same time, as the financial year progresses, the Finance Minister will use the spectre of growing budget deficit to cut back on expenditure outlays announced in the budget. Bourgeois economists use the issue of budget deficit in both ways to suit the bourgeoisie. On the one hand, a larger deficit has to be endured in order to ensure “growth” in the interests of capital, and on the other, expenditure on social services for the people – on food, homes, education and health, has to be cut back in order to control the deficit.

In the budget speech, the Finance Minister accepted that the income of farmers and agricultural labourers has fallen during the last year, making lives of crores of people even harder. In order that the peasantry and agricultural labourers who toil to produce food for the country are able to provide for themselves and their families, quality inputs have to be made available to the tillers at a fixed price and they need to be ensured a remunerative price for their farm produce taking into account all their input costs. Contrary to this, the committee formed by the government has proposed dismantling of the Food Corporation of India (FCI) which today procures food grains from farmers at the government announced support price.

The Modi government says that every Indian will have a house by 2022; for this 2 crore houses in urban areas and 4 crore houses in rural areas will be built. However, it makes a measly provision of Rs 14,000 crore in the budget for this purpose. This amounts to Rs.2,300 per home! The government has launched a campaign of ‘Beti Bachao, Beti Padhao’ across the whole country, but considers the provision of Rs 2000 crore enough for all its programmes of Women and Child Development! 

Like in earlier budgets, interest payments to financial monopolies and expenditure for war preparations remain the two biggest items. The spending on purchase of new arms has been again raised in this budget, by about 11% over the previous year revised estimates of Rs.2.22 lakh crore. The government is ensuring that India holds its place as the largest arms buyer in the world, as it has been in the previous three years. Finance capital continues to have the largest claim on budget outlay, with interest payment at 20 paise for every Re spent.

From all the anti-people steps and measures to rob working people and further enrich the capitalists announced by the government in its budget, people are now clear that Modi’s achhe din are for the capitalists only. Within a few months people have realized that changing the party in power has not solved any of their problems.

It is very clear that in a capitalist society, the economy is oriented to maximising the interests of the capitalists. The government, whether of the Congress or the BJP, manages the economy in the interests of the ruling bourgeois class. In the present era of imperialism, the interest of all others are subordinated to those of the monopoly bourgeoisie and finance capital. The economy is oriented to rob the people to enrich finance capital. The Budget of the Modi government has precisely done this task assigned to it.

Anti-people steps announced in the Budget

  1. The service tax is to increase to 14 percent from the current 12.36 percent and more services shall be covered under this tax. Additional 2 percent road cess on service tax shall be charged from a later date which will increase the service tax to 16 percent. Thus the service tax will increase by nearly one third from the current level. Service tax is an indirect tax which is charged at the same rate irrespective of the income level. With every budget the burden of the indirect taxes is being increased. The bulk of the indirect taxes are paid by the working people.
  2. The clean energy cess on coal shall increase by Rs 100 which will increase the cost of the electricity.
  3. Privatization of public sector, created with public money, shall be more vigorously pursued to generate income of Rs 69,500 cr for the government as against only Rs 26, 350 cr in the current year. Many more public sector units shall be partly or fully handed over to the capitalists, ignoring the interest of the workers and the society. For the complete withdrawal of the state from the public sector banks, the first step has been by forming a Banking Board Bureau which in due course will be converted into a holding company of all the public sector banks. All the public sector bank shares held by the government will then be hold by the holding company. All the public sector ports will be converted into companies. This obviously is the first step towards their privatization. 
  4.  The budget of various social services provided to people has been cut by nearly 20 percent. The biggest cut is for primary education which will lead to further privatization of education and make it more expensive for people.
  5. The funding for health sector is also cut by 20 percent. The health sector budget is being steadily reduced to provide greater space to private health sector and indirectly to health insurance sector.
  6. Gradually all goods provided today at concessional price – food, kerosene, cooking gas, fertilizer – will be provided only at the market price and the subsidy will be given only through ‘direct benefits transfer’ which subsidy will be paid in into a bank account. The government is claiming that this will reduce ‘leakages’. In reality this is the first step towards the state completely withdrawing the availability of any goods at concessional price. The withdrawal of subsidies of around Rs 2,30,000 cr to poor has been strongly demanded by the capitalists so that the state can divert this to the capitalists.   
  7. The allocations to MNREGA and food subsidy has almost stagnated, in real terms, which shows that the government is not at all serious in implementing food security and generating employment. The allocation for health and family welfare has come down from Rs. 35,163 crores last year to Rs. 29,653. The total budgeted figure for housing and urban poverty alleviation has come down from Rs. 6,008 crores to Rs. 5,634 crores. There is a huge shortfall in allocations for the Tribal Sub-Plan - 5.5 per cent instead of the mandated 8.2 per cent (less by Rs. 5,000 crore compared to last year). For SCs it is 8.34 per cent instead of the mandated 17 per cent (less by Rs. 12,000 crore). Even in absolute nominal terms these allocations have been cut. The Gender Budget too has been severely cut by 20 per cent (less by Rs. 20,000 crore). The ICDS (child nutrition and early schooling) programme has been halved from over Rs. 16,000 crores to Rs. 8,000 crores only. 
  8. The spending on purchase of new arms has been again raised in this budget, by 11% over the previous year. The government is ensuring that India holds its place as the largest arms buyer in the world, as it has been in the previous three years.
  9. Finance capital continues to have the largest claim on budget outlay, with interest payment at 20 paise for every Re spent.

Steps to further enrich capitalists by robbing working people

  1. Abolition of wealth tax completely on the wealth collected by the rich through the exploitation of working people
  2.  Plan to reduce on tax on the profits of the companies from 30 to25 percent over the next four years
  3. Plan to introduce Goods and Service Tax (GST) from the next years which will further improve their profits the burden of which will be completely borne by people through higher prices of goods and services.
  4. Plan to bring a law which will allow the companies to declare bankruptcy and close down the company. This is a part of improving the ‘ease of doing business”.
  5.  Plan to create a national market for agricultural produce has been announced. This will allow large food companies to procure their requirements from the cheapest source in the country and sell them where they earn maximum profit.  
  6.  A national infrastructure investment fund will be formed so that the all the risks of losses can be borne by this fund while capitalists will enjoy all the profits made by them through investments in infrastructure sector.
  7. Foreign capitalists have been assured that their profits will be protected as the implementation of the General Anti-Avoidance Rules (GAAR) has been postponed by the two years by the central government.
  8. The Finance Minister claimed that he is giving a big tax relief to the working people by increasing the limit of money paid for health insurance to Rs 25,000 from Rs 15,000. This has actually been the demand of health insurance companies so that they can charge higher insurance premium and encourage more people to take health insurance. This is yet another step towards handing over the control of entire health sector to insurance industry for maximizing their profit. After some time people without health insurance will find it impossible to get any good health care as has happened in US and other countries.  



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Defeat Privatisation    central budget    Mar 16-31 2015    Voice of the Party    Economy    




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