The 42nd amendment in the Indian Constitution was enacted by the Indira Gandhi-led Indian National Congress government during the Emergency (June 25, 1975 - 21 March 21, 1977) days. This amendment altered the Preamble and termed India as a socialist and secular country, along with sovereign, democratic and republican. However, successive Indian governments since 1991 have left no stone unturned in ruining India’s image founded on these five pillars but the biggest dent has been put on our socialist character.
Emphasis on privatisation
The Union Budget presented by Finance Minister Nirmala Sitharaman on February 1, 2021 will prove to be a milestone in the ongoing privatisation process. No rocket science is involved in understanding the attitude of the present Union government which is hard bent to disinvest/privatise the public sector units in the upcoming financial year. The government is all set to sell (through divestment or privatisation) stadiums, warehouses, banks, Public Sector Units (PSUs) such as Bharat Petroleum, Shipping Corporation of India, Container Corporation of India, Nilachal Ispat Nigam Limited, Pawan Hans, Life Insurance Corporation, Air India, GAIL etc. The Indian stock market has reacted positively to this development.
It becomes pertinent to mention here that after the budget announcements of 2020 and 2019 (July), the Indian stock market saw a decline of about 2.5% and 6.5% respectively due to an imposition of capital gains tax on investors income and the introduction of some new schemes for the general public. However, Budget 2021 spells a narrative of economic reforms which is tenaciously pro-capitalist and anti-poor.
The government seems to be selling public entities through three ways. In its first kind, the whole or part of a public sector unit is sold to private parties as is proposed to be carried out in case of a bank and a general insurance company. In the second type, the government lists the unit in the stock market and then sells its shares to the investors as has already happened in case of Bharat Petroleum Corporation Ltd., Coal India Ltd., Shipping Corporation of India, etc., and is now proposed for the LIC. The third method is unique. Here the ownership remains intact with the government but part of the unit is sold to private parties as has been seen in context of the airports and now proposed for railway freight corridors, oil and gas pipelines, stadiums and some toll roads.
Although the government is on its toes to sell public sector units yet there is a lurking fear that the sale of these units may not fetch remunerative revenues to the government owing to the ongoing recession. Hence, the government may be compelled to sell them at throw away prices as it has done with Air India, where in the absence of genuine buyers, the government is ready to disown it even by torturing itself by retaining its debt of about `4000 crore. Budget documents also stand testimony to the above-mentioned fact wherein earnings of the government from the disinvestment process in the upcoming year are projected to be `1.75 lakh crore against `2.10 lakh crore in 2020-21 - even though the numbers of public sector units to be sold remain large. It gives a clear idea that the current budget is designed to facilitate privatisation with limited spending on the welfare of the common man.
Public welfare ignored
Hollowness of the budget or the government's announcements can be examined from the expenditure segment of the budget document which ostensibly points out that the government has reduced spending on important social projects. Some of the important schemes where the distribution of the government has decreased as compared to last year include MGNREGA (Budget Estimates of 2020-21 had allotted ` 61000 crore which were increased to ` 111500 crore during the pandemic and have now been reduced to ` 73000 crore), jobs and skills development (` 5372 crore to ` 3482 crore), Minority Development Program (` 5372 crore to ` 3482 crore), Border Area Development (` 784 crore to ` 566 crore), Pradhan Mantri Gram Sadak Yojana (` 19500 crore to ` 15000 crore), Khelo India (`890 crore to `658 crore) and Pradhan Mantri Kisan Scheme (`75000 crore to `65000 crore).
Besides, the allocation for some other important sectors like education, agriculture and allied activities, information and telecommunications and petroleum has also seen a nose dive. In addition to this, the much-hyped health allocation along with employment suffers from misleading or contradictory numbers. In context of the health sector, it is stated that the budget outlay is `2.23 lakh crore which is 137% higher vis-à-vis last year figures. However, this figure has been arrived at by considering the outlays on water, sanitation and nutrition along with the finance commission grants for water and sanitation and health sectors. If these figures are deducted from the allocated `2.23 lakh crore, the total distribution stands at `111902 crore, which is just `17450 crore more than last year's 94452 crore. This means that contrary to the government's claims, the health sector has grown by just 18.47% and not by 137%.
Similarly, economists lament that the budget documents falsely claim the number of central government employees to reach 34.1 lakh in the year 2021-22. In last year's budget, the government had forecasted the figure to reach 36.2 lakh, which was later revised to 33.1 lakh. In fact, in the year 2018-19, the government had admitted that the number of central government employees is around 35 lakh and in 2021-22, even if the number of central government employees reaches 34 lakh, it will be one lakh less in comparison to the number of central government employees in 2018-19.
Budget may step up inflation
In order to improve its financial condition, the Union government has come up with another ploy. To enhance productivity and improve agricultural infrastructure, the government has introduced Agricultural Infrastructure Development Cess (AIDC) on petrol and diesel. The Finance Minister has however remarked that the cess would not prove to be a burden on the general public as it has simultaneously reduced the basic excise duty and special additional excise duty. But there are two aspects to be noted here. One, the revenue from cess goes only to the central government’s exchequer and the states do not get any share out of the amount collected through cess. Hence, in near future, it is anticipated that the state governments will increase the taxes and duties on the items falling under their jurisdiction like motor vehicle registration, land registration etc. which will be detrimental for the common man. Second, although the central government is now offering temporary relief to consumers on petrol and diesel by reducing excise duty, this move will severely affect the profits of oil marketing companies. If international oil prices rise, which seems realistic due to the agreement among OPEC countries to continue producing lesser crude oil, then oil marketing companies will be compelled to make up for their losses by raising petrol and diesel prices, which will eventually burn the pocket of the common man.
In view of the above-mentioned facts, it is not difficult to understand that the present budget is once again a jugglery of statistics. Instead of taking steps for the betterment of the common man, corporates have been appeased. If the government does not change its stance in the coming financial year, the country’s struggle against unemployment, poverty, inequality, and inflation will continue.