The Central Budget, 2019
We are aware of the fact that like the Governments of every capitalist country, the Central Government and also the State Governments of this country are actually the managers of the private limited company of all the capitalists, the Central Government being the General Manager. To avoid any misapprehension, it should also be added here that the control of this company is firmly in the grip of the big corporate houses, which are tied up with the big landlords and imperialist capital. So, it is natural that the central budget would be the balance sheet of this private limited company. As faithful manager of the company of capitalists, the Central Government tries to give maximum possible benefits in the Central Budget to the Indian and foreign capitalists, especially the bigger ones and also the landed gentry, by further fleecing the working class and other toiling people, including poor peasants and agricultural labourers. It was and it will be so till the big capitalists rule this country, in collusion with the big landlords. So, one may ask why should we waste our time in analyzing their budget?
The question gets further importance because gradually the efficacy of the Central budget has been reduced even among the capitalists. The budget does not initiate any new economic policy of the Government; rather it reflects the continued economic policy which is being followed by it. Furthermore, for quite a few years, the governments, be it NDA or UPA or any other party or combination of parties, are taking important economic decisions throughout the year outside the budget and often even outside the purview of the parliament, thereby relegating the importance of budget as a complete policy statement of the government, serving the capitalists. After the initiation of GST, the importance of budget has been further undermined, because now the government cannot increase or decrease the taxes on commodities, which was closely followed by capitalists of different sectors. Another noticeable thing in this budget has been that the actual figures of revenue earned and expenditure of the previous year was not disclosed and estimated values show big discrepancies covering-up the problems in the economy. Massive shortfalls have not been shown.
However, as it reflects the class character of the Central Government and the parties leading it, we should have a look to the Central Budget to understand the steps the Government is planning to take to serve the Indian and foreign capitalists obviously detrimental to the interests of working class and toiling masses.
Firstly, the Government has made its central focus to raise the GDP of India to $5 trillion. According to World Bank statistics, the GDP of India was just above $2.7 trillion in 2018. If we consider an annual growth rate of 7%, it will take at least 9 years to reach that level. Considering the condition of world economy, it is difficult to predict what will happen in this period. However, even if we consider that India will reach that level, is there anything for the working class to rejoice about? The GDP growth can only happen due to the toil, due to the labour of the workers and peasants. The finance minister, in her budget speech, has lauded the capitalists as the "wealth-creators". Nothing can be more further from truth. The real wealth creators are toiling people. Wealth is created by the labour of toiling people, who acts on the Nature with the instruments of labour. In capitalist society, the instruments of labour are in the hands of the capitalists and with that strength they appropriates the wealth created by the workers and claim those as their own. It is similar in case of other modes of production. Wealth is created by the peasants on the land of landlords and the landlords, parasites living on the labour of the peasants, forcibly appropriate that wealth from peasants in the name of rent. Though, the workers create wealth, what do they get in return? Nothing but misery. So, even if India reaches the level of $ 5 million, through the hard work of the workers, they will get nothing. The wealth will be appropriated by the capitalists and the workers will remain in the bottom of the society, deprived of even essentials of life.
This is all the more true in today's India. Actually it is clear from the budget speech, for the growth of GDP, the government is placing their bet on the private investments. But, how the private industrialists can be lured to invest has become very important to the Government? To lure the capitalists, both Indian and foreign, to invest, the Government has started to dilute the labour laws to such extent that the capitalists will be free to exploit the workers without any legal hassles. The finance minister has stated in her budget speech that the "government is proposing to streamline multiple labour laws into a set of four labour codes. ... With various labour related definitions getting standardized, it is expected that there shall be less disputes". Budget is all about incomes and expenditures. From where the government will get money and where it will spend. Then, why should there be any statement on the labour laws? It does not entail any expenditure. Why should labour laws be discussed there? The only reason is that through this statement the Government has tried to assure the capitalists, not only the Indian, but also the Imperialist capitalists to invest here, which is very important for its budget. There cannot be any other reason for the inclusion of this statement in the budget speech? In a word, the main focus of the budget is on the growth of wealth by increased exploitation of the workers. It is like the Government is asking, "come, exploit our workers, appropriate their labour and wealth created by that labour in return of cheap wages and garner wealth, and also give a portion of that ill-gotten wealth to us". This is the real motive of our "patriotic", "nationalist" government.
Without getting into the details of proposed changes in the labour laws, which may be a topic of discussion of some other essay, we return to the problem of investments. The government has tried to devise other ways to increase investments. It seems that the government itself is not in a position to invest much. Excepting some schemes to develop physical connectivity, the Government has not proposed much on that front. It has been stated that the "Government has announced its intention to invest 100 lakh crore in infrastructure over the next five years. To this end, it has proposed to set up an expert committee." Somewhere the government is in a sense. in the middle of a dilemma of commitment to fiscal management as per globalisation-liberalisation norms and on the other the slow-down that is gradually gripping the economy. It is clear though that the Government itself is not clear about the possible source of fund.
So, the Government is trying to encourage investment from private capital. Besides diluting the labour laws, the Government has tried to devise other means to encourage investments. It has also gone to the extent of risking availment of foreign sovereign bonds. The public sector banks are to be provided with a capital of Rupees 70000 crores, so that it will be able to give credits. The credit may be used to boost consumer demands or may be provided to help the capitalists so that they can produce with the help of the money of common citizen. If they succeed they will garner wealth and even if they lose, they will not lose. The loss will be neatly transferred on to the shoulders of common depositors of banks.
As the public sector banks were besieged with the problem of non-performing assets or NPA's, the non-banking financial institutions (NBFC) invested heavily on the infrastructure sector. But, their sources of funds were mainly short term schemes. As the projects in which they invested are long term projects and there have been many problems in completing the projects, the NBFC's started to default on their payments. The problem reached such a proportion that the NBFC's like ILF&S not only faced extinction but also created shivers among the financial institutions. The Government moved fast to contain the situation by seizing control of the ILF&S. By the takeover, the government has also taken over the liabilities of the company. In the budget also, the government has pledged that banks will provide capital to the NBFC's so that they can continue their risky business at the cost of common people. Because, ultimately if the governments rescues these companies through its own fund or the fund of the public sector banks, the money it is using is the money of common people.
The foreign capitalists have also been given some benefits. The Finance Minister has stated that "100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries and Local sourcing norms will be eased for FDI in Single Brand Retail sector. " Another good news for the big capitalists that the Government has fixed 1,05,000 crores of disinvestment as this year's disinvestment limit. The shares of PSU's will be sold to the capitalists so that they can make profits by using the assets of the companies which has been built up using peoples' money.
Ideally, it should be the task of the government to arrange for all the social necessities like education, health, infrastructure like roads and bridges, etc using the funds gained through taxation on the citizens, the rate of which should be progressively higher with the increasing wealth of the citizens. However, whereas the Government is bending over backward to help the private capitalists, it is diluting its social responsibilities. The Human resource development has been allocated a mere 3.5% of total expenditure. The condition of health is worse. It has been allocated only 2.3%. Obviously the biggest beneficiary is the defence, which has cornered (including pension), 15% of total expenditure. Another important expenditure is interest payment which is as high as 18%.
On the income side, there has been no change in GST, the government cannot do it, but even then the government has increased the taxes on diesel and petrol. In case of corporate tax, the government has increased the threshold limit for 25% tax, from annual turnover from 250 crores to 400 crores. According to the statement of FM, now only 0.7% of the companies will pay more than 25% corporate tax.
So, to sum up, the central budget is an exercise to help the Indian and Foreign capitalists to gain further wealth by increased exploitation of the workers and common people. In absence of any resistance of the workers and common people, the Government is looting the people themselves by huge taxation, and also helping the capitalists to loot workers and common people, by intensifying exploitation on the workers and looting the money of common people by embezzlement of the deposits of common people saved in the public sector banks. In a nutshell, this is the real essence of the Central Budget, 2019, as always.
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