The Indian budget, year after year, follows a pattern: increased expenditure on unproductive items like interest payments and defence, while essential investments in human welfare—healthcare, education, and social security—remain woefully inadequate. This trend has deepened unemployment, poverty, and the ever-widening gap between the rich and the poor, reflecting the real priorities of those who control the economy.

A significant portion of India’s budget is swallowed by interest payments and defence spending. Interest payments alone consistently consume nearly 20% of the total budget. This growing financial burden limits the investment in sectors that directly impact human welfare, such as healthcare, education, and employment generation. Defence spending has also seen a sharp increase, now accounting for over 15% of the total budget. For example, the defence allocation in the 2023 budget saw an increase of ₹1.62 lakh crore, while spending on health and education remained stagnant.

Over the years, this prioritisation has come at the expense of addressing the pressing needs of India’s massive population. Healthcare expenditure has remained below 2% of GDP, grossly insufficient for a country of over 1.4 billion people, as the COVID-19 pandemic highlighted. Similarly, education has consistently received just about 3% of GDP, far from the levels necessary to ensure equitable access and quality improvement, particularly in rural and marginalised communities.

The neglect of these key sectors has severe consequences. Unemployment remains a chronic problem, with rural and urban populations alike struggling to find secure jobs. Schemes such as MGNREGA, touted to provide a ‘safety net’, have seen budget cuts, as the 2023-24 budget demonstrated with a reduction of ₹25,000 crore from the previous year. This comes at a time when rural unemployment is already at a critical high.

Poverty continues to persist, particularly in rural areas where the agricultural sector, employing nearly half of India’s workforce, remains severely neglected. Marginal increases in the agricultural budget do little to address the systemic problems faced by small farmers, such as lack of access to minimum support price, rural infrastructure, and procurement support. Meanwhile, inflation continues to eat into the already meagre earnings of the working class, with the prices of essential goods steadily rising, exacerbating the hardships faced by the poor.

The widening income inequality in India is another testament to the failure of these budgets to prioritise human welfare. While corporate houses and monopoly groups receive tax breaks and incentives, small and medium-sized enterprises (SMEs) face closures, workers struggle to secure minimum wages, and peasants are devastated by falling incomes and rising costs. The result is a country where the rich grow richer, and the poor become poorer.

India’s wealth and income disparity has sharply increased in recent years. According to Oxfam’s 2023 report, the richest 1% now own over 40.5% of the country’s wealth, while the bottom 50% hold just 3%. The number of billionaires rose from 102 to 166 between 2020 and 2022, with their wealth growing by 121%. Income inequality is stark, with the top 10% earning 57% of the country’s income, while the bottom 50% earn just 13%. The COVID-19 pandemic worsened the gap, benefiting the wealthiest while disproportionately harming low-income workers and the informal sector.

This budgetary framework is not accidental—it reflects the deeper orientation of the Indian economy, which is set by big corporate houses, financial interests, and various power circles. The state functions as an instrument of these ruling elites, using the budget to secure their interests at the cost of the majority. Corporate tax cuts, such as the drastic reduction in 2019 from 30% to 22%, benefit large businesses, while the tax burden is disproportionately shifted onto the people through indirect taxes such as GST, excise and duties.

This economic orientation ensures that government policies, including budget allocations, prioritise corporate profits and big infrastructure projects, while the vast needs of the people remain unmet. Farmers are pushed to the brink, SMEs close their doors, and workers have no guarantee of minimum wages. The state’s failure to address inflation, economic distress, and the lack of social protections further compounds the crisis, deepening the divide between the powerful few and the powerless many.

In this system, the people have no real role in deciding the direction of the country. Despite being labelled a democracy, the reality is that people’s involvement is limited to voting for this or that party once every five years. Once elected, these ‘representatives’ are accountable not to the people, but to the ruling circles and their political parties. This marginalisation leaves citizens powerless, with no say in how the budget is formulated, how taxes are collected, or how public funds are distributed.

The devastation of peasants, the rising cost of living, the closure of businesses, and the erosion of workers’ rights are all symptoms of this systemic disempowerment. Even though the people shoulder the burden of taxes and face the consequences of inflation and economic distress, they have no mechanisms to influence or change the orientation of the economy.

The only way to change this situation is for the people to come together and demand a thorough transformation of the political process. A genuine people-centred budget can only emerge when power is placed in the hands of the people, not the ruling elite. This requires a system where the people have the right to select and elect their representatives, the right to recall those who fail to fulfil their responsibilities, and mechanisms to hold them accountable.

Furthermore, the people must have the right to initiate laws and policies that reflect their needs and interests. Such a transformation would break the stranglehold of the ruling class over the state and the economy, creating a new system that genuinely serves the majority rather than a select few. Only then can the budget become a tool for balancing income and expenditure in the interests of the vast majority of the people.

Source of image: https://medium.com/your-philosophy-class/rich-get-richer-and-poor-get-poorer-a1d662e2b6f9

President’s Blog

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