by BA and Venkatesh Sundaram
Annual Budget Speech 2022 was full of contradictions. Allocation for health sector stagnant despite pandemic disasters, education allocation not earmarked for hiring much needed teachers. Allocation for grain procurement and employment guarantee scheme MNREGA reduced greatly despite assurances to farmers on MSP and burgeoning unemployment. Orientation of the economy has always been to serve the then needs of the biggest capitalists, which is why they have continually gotten immensely richer and more powerful. To reverse this and make budget people-oriented, people need political empowerment. People need to become masters of the country and destiny.
Image source: https://msmenews.net/2022/02/02/budget-2022-23-budgetary-allocation-rises-for-msmes-but-some-key-schemes-see-a-cut/
An annual mega-event is the Budget Speech by the Union Finance Minister on the floor of the Lok Sabha which marks the beginning of the Budget Session of the Lok Sabha. The year 2022 was one where the speech appears to have been muted and response in the mainstream media as well. The Finance Minister announced many schemes and promised to tackle the problems of the people, especially those generated by the slowdown of the economy, the long-term devastating consequences of the demonetisation and the 2 years long pandemic, and the disruption of the economy caused by hasty lockdowns and the resulting `shocks’ that the economy has received.
In the meantime, official statistics appear to point at a growth rate of over 8% p.a. in the country’s GDP, which need to be taken with a pinch of salt, because this is computed on a significantly shrunken economy over the past 2 years. Experts have pointed out that the Budget Speech was full of contradictions, and significant shrinkage of expenditure of public projects and welfare orientation of the economy. It does not address the burning problems faced by the bulk of the population in terms of shortage of job opportunities, and basic needs of food, clothing, shelter, education, health care and a secure future. People could surely ask exactly what the provisions are in the health care sector which has been exposed by the pandemic years as totally inadequate – and the answer would not satisfy us at all! Expenditure on health in real terms has remained stagnant if inflation is considered. This, despite the pandemic having exposed the woeful inadequacy of our health infrastructure.
These two years of the pandemic have also exposed the utter inadequacy of any kind of planning in the employment sector, especially in a country that boasts of a young population and of which much was said about reaping a `demographic dividend’. If anything, the truth is that the youth are desperate today – as can be seen from the millions of youths applying for a few posts in the railways last month, the riots around the misconduct of the exams. Even after all that, which happened just a month ago, the budget of the Central Government has no plan or policy to provide employment for the millions of jobless, when in fact the right to work ought to be a fundamental right. On the contrary, even the allocation to the MGNREGA employment guarantee scheme for rural areas has been cut back to Rs 73,000 crores from the revised estimate of Rs 98,000 crores for the current financial year. Education outlay has been increased somewhat but this will not go towards appointments of teachers even though about 1.1 million teachers’ appointments are pending. Had the allocation been made for appointing these teachers, not only would young students be benefitted, but it would also reduce the current unemployment among educated youth. But the increased allocation will go towards “electronic teaching mode” – the setting up of which is likely to benefit capitalists in the education sector monetarily.
The budget has not made adequate provisions for procurement of grains and agricultural produce. For instance, the budgeted figure for the grain procurement, which was Rs 111,000 crores in 2020-21, and actual expenditure estimated at Rs 98,000 crores in the ongoing financial year, has been further eroded to just Rs 73,000 crores in this budget! This, though the Union Government paid lip service to the important demand of the farmers just a couple of months ago that they would seriously study their demands related to guaranteed Minimum Support Price for all crops!
Clearly, the budget is designed to make the orientation of the economy even less suited to fulfilling the material and cultural needs of the youth, workers, and farmers – the bulk of the population. When even less money is going be spent on the people in real or proportional terms – it clearly means that more money will be spent on policies, schemes and projects benefitting the super-rich of the country.
The question than arises as to why matters are this way. The Union Budget is a concept inspired by British institutions and is particularly significant in a country where a large amount of stimulus has historically come from public expenditure. The Government collects taxes and has several sources of revenue which it must disburse to support the nuts and bolts of society, plough funds and investment into the future and address the core issues that face our people. The basic function of a democratically elected government is to care for all the members of society. Yet nearly 75 years after independence, the report card is an extremely grim one.
It may be recalled that the very basis of the post-independence economy was laid out in the so-called Bombay plan (sometimes known as the Tata-Birla) plan. This was a plan authored by the richest industrialists of the time, including G D Birla and Ratan Tata. Since these industrial houses did not have the resources to invest in heavy machinery and infrastructure which are capital – intensive and have long gestation periods, they wanted the government to invest in these sectors This was falsely flaunted by the Nehru government as a “socialist” feature of the Indian economy. In actual fact, it was the biggest capitalists who wanted the government to make the investments while they reaped the benefits of that investment, by getting heavy machinery at much cheaper rates than they would otherwise, by getting the infrastructure necessary for expanding their commercial operations ready-made and so on.
Because the orientation of the economy from the time of formal independence was to serve the needs of the biggest capitalists of the time, it is no surprise that these capitalists, the super-rich, became wealthier and more powerful with every passing year. On the other hand, the masses of the people hardly gained anything worthwhile over the decades. Within a few decades, the super-rich had accumulated enough resources and capital so as to be able to invest even in those areas of the economy which were capital-intensive and had long gestation periods.
It is at this time, in the early nineties, that the government of the day headed by Mr Narasimha Rao, started singing paens to privatisation and liberalisation. This process continues till the present time, step by step, and has the feature of handing over very valuable assets created with the wealth and labour of the Indian people to capitalists at a pittance. This is what has happened to Air India, this is what the ruling class have done earlier with Modern Bread and several other companies, and this is what they wish to do with LIC, BSNL, ordnance factories, railways, and many other public sector organisations.
Thus, the goals and orientation of the economy during the decades immediately following independence and at the present remains the same. This is the facilitation of accumulation of profit and wealth for the richest of the rich, of those of the biggest industrial houses that control the reins of the economy, who fund political parties, and who decide who will be the managers of the country so that their profit making remains unhindered.
Every year, before the budget, the Finance Ministry makes a point of “consulting the captains and leaders of Indian industry” through their apex bodies, namely the Confederation of Indian Industry, as well as the Federation of Indian Chambers of Commerce and Industry who basically dictate the contours of the budget. But the hand of the biggest capitalists and industrialists in determining the orientation of the economy is hardly limited to this pre-budget exercise. In fact, as revelations such as by the infamous ‘Radia Tapes’ have shown, the biggest capitalists dictate the very composition of the Union Cabinet. Each monopoly house tries to ensure that those who head key ministries of interest to them – such as oil and gas, telecom in earlier years, civil aviation etc – are women and men who will take care of their particular interests literally on a day-to-fay basis. So, is it any surprise that the Union Budget of 2022 reflects only the interests of the most powerful and the richest of the land?
In order for the people of India to really address their economic problems, they must have political power in their hands. Today, they are totally powerless as can be clearly seen from the manner in which the budget totally ignores the needs of the toiling millions. The people, not the big capitalists, must become key part of the consultation process. They, not political parties controlled by the super-rich, must have the power to select candidates for elections at all levels. The political system must ensure that failure to deliver what is promised to the people will be something that will be penalised. The right to recall elected representatives must be codified and made enforceable. Only such measures could possibly reorient the economic policy of the government to ensure the material and cultural well-being of the masses of the people. Hence it is necessary for all those who wish to extricate our country and our people from the bleak situation to think about how we could go about doing this. We must actively collaborate with each other and organise to ensure that we, the people, actually become masters of this country and our destiny.