Budget Before Time Will Impress Voters
The Finance Minister has presented the Budget for 2017-18. But before presenting the Budget in Parliament, lot of question marks have arisen on it. First, the sanctity of the Budget was lost on 31st December, when the Prime Minister himself announced some main points. It would have been better if the Prime Minister should have restrained himself and had followed the values of the Parliament and waited for the Budget to be announced by the Finance Minister, which he did not do. Finance Minister, Arun Jaitelyji mostly announced main points and assurances which the Prime Minister had already announced in his address to the nation. As far as the question on Budget, for the first time, the Rail Budget was presented together with the Union Budget. This also happened for the first time that the Budget was presented a month in advance. We have objection to it because when 20% of the voters of India will be casting their votes, any promise made by the government, or announcements made, it will surely affect the voters.
We, firstly want to say that the Budget is directionless. It does not have any roadmap as to how the development will take place and how will employment will be generated. The claims made by the government in the Economic Survey and the Budget and the claims made by the government are misleading, the facts deny it and the ground reality also deny them and it becomes the responsibility of the government.
This Budget has been presented before time to derive the benefit during elections and to impress the voters, as the elections are being held in five states, its importance has been overlooked and be it the investors, the farmer or the youth, the budget is directionless and has no proposals for increasing manufacturing or in employment generation.
The figures of growth rate given by the government are doubtful, because the yearly projection, and estimate, both are incorrect. The reason is that earlier when the Budget was made, there was lot of difficulties faced in compiling it. Only, the data of seven or eight months was available and be it with the CSO or the Finance Ministry because the financial year starts from 1st April.
But this time, the projections of budget estimates are available for the full financial year and the figures are based on six-month period. Therefore, this is unbelievable and cannot be believed because all the figures given, whether it is of the GDP (Gross Domestic Product), be it of Revenue Collection, of tax collection, be it the expense for public welfare, is based on the six-month data and in the seventh month came the demonetization which was appreciated by the Prime Minister, the government and the Finance Minister, all have patted their backs but there is no proper mention after the decision of 8th November, what affects it had on the economy and what losses it incurred. Until those figures are disclosed, the making of the budget on six-month data before 8th November, to make full estimate and the make next year’s projections will be not proper. He has presented the figures after giving it a shine, so that the allocation in some sector, could be rectified, looking at the condition.
The government does not have the facts which can tell that there is overflow of cash in the banks, that the money has been forcefully taken from the people of India when 65% of the banking facility is not available in villages. The government has not given any figure on the loss of employment due to demonetization. Loss of labour, loss of income, loss of national income, and the cut in GDP from the IMF deliberately, is not mentioned. Initially, there was a one percent cut in it which we have continued and are still maintaining it responsibly. Unfortunately, the acceptance of one percent fall in the GDP is wrong because this is the estimate for less than 45 days period. It will have serious affect on the GDP and the fall in it will have extremely bad effect and the recovery of which will be painful and slow.
When the fundamental of our economy is very weak, on what basis are we making our claims? Firstly, there was downfall in demand, downfall in consumers, the investment is diminishing. For the past some decades the investment was not so low, which it is today. The loans, apart from industries, are at a 20-year low and the new industries that are set-up, which is called capital formation, had gone below negative after the 50 decades since August last year.
In this, there is no any kind of encouragement provision in increasing investment of which I had mentioned it earlier. It is historically mentioned. This position is both in the public and private sectors. In fact, there is no investment in the private sector. There is no provision of any encouragement in the budget. Until, you encourage, your assurances will prove hollow and it would have no meaning. The reality is, that he has brought the Indian economy to a standstill and has put the country in the queues. On the strength of impressive words in his speech the basic reality cannot be changed, which cannot change the sequence of happenings in the country.
The industrial capacity is not being utilized more than 1/3 or 33 percent because of which lakhs of people have become unemployed. After demonetization, crores of jobs have been retrenched in the formal and nonformal sector. There is no sector-whether it is ceramics, textile, be it leather, of making utensils, or of glass factories or in leather factories, lakhs of jobs have been retrenched. At many places the factories are working at 50% capacity and at some places, the factories are working below 70 percent capacity. In the informal sector, where 45% production takes place, in India, 40% export takes place in informal sector, has been affected by 90 percent. It has no mention in the budget or in the survey, this information has not been given by the Finance Minister, nor it was mentioned in the Economic Survey. We were hoping that the Finance Minister would tell the reality to the country and what he would do to improve the situation. The budget this government has presented has no provision of increasing investment.
It has been claimed in the Economic Survey and the hope has been expressed on the basis of exports, what is the proportion of India in the merchandise export? On this issue I throw a challenge to the government. They are depending on the marginal increase in the NovemberDecember, whereas during the past 18 months there has been huge decline.
During the two months of NovemberDecember 2013-14, there was exports of 5059 billion dollars. Next year, the exports was worth 52.64 billion. During 2015-16 it declined and came down to 42.31 billion. Therefore, this 10-2/1 billion dollar, which would be around Rs. 70,000 crores, will be the loss for two years.
The figures which they are claiming, are the figures of 2016-17, the figures that they have given, if both the figures are added, then the loss would be of 43 billion dollars.
Twenty percent of the total budget has been due to less exports. Therefore, after the decline from 52 billion and then rising by 43 billion, the difference that has arisen to 11/2 billion, is good and it should show more improvement. But the people should not be misguided on this, and you should not base the budget estimate on it as this can be a big mistake.
The government has slightly increased the allocation for Social Sector and rural development. Mostly, the scheme which is in the social sector, and the increase there, keeping in mind the economy, is very negligible, but whenever done, it is because of the circumstances, because there is lot of problem in the villages, to the poor people, to the farmers and people have migrated from there. The daily earnings of crores of Indians has been lost and their daily wages has been lost. People who sell their wares, who make things, they too have incurred a big loss. Therefore, the government had to increase its expenditure in the rural sector. Government has money and it is of the people, the Finance Minister did not tell this, but all know that 98% of it has come back. The question remains as to how much money has come back, and how much of Black money was in it.
There is a big question attached to it. Last year, 48 thousand 500 crores has been reduced to 47 thousand 500 crores in the revised estimate. This is no charity. The situation that developed, be it of the farm labourer, or the factory workers, have returned back to the villages after the migration, that is why the UPA government had made MGNREGA, they had to increase the amount in this, otherwise there would have been hue and cry in the country. The government has done no (Meharbani). It is accepted by the government that the condition in the villages is very bad.
The remaining announcements were made by the Prime Minister and Finance Minister has just repeated them.
Alongwith that 60 day’s interest for the credit given to the farmers has been waived off, what an obligation has been made? How much loss has been incurred by the farmers at that time? It was the time of sowing, the money of Kharif crop was not available, money was not available from the banks, for purchase of seeds and fertilizer. My question is, why was the loans of the farmers not waived off? Our accusation is that the Prime Minister and this government has ignored the interest of the farmers, has hurt the poor farmers of India and a crude mockery has been made against them by waiving of 60 days of interest. If the government had understood the pain of the farmers in real terms, then they would have made changes in this budget, brought an Amendment to waive off the loans of the farmers and could have announced as UPA-I had done by waiving off Rs. 72 thousand crores.
Now, it is a matter of the banks. Last year 15 thousand crores was deposited in banks and the Finance Minister in his address said that Rs. One lakh crores will be given for re-capitalization of banks. Then, there was a talk of Rs. 20 thousand crore. Then, there was talks of depositing Rs. 15 thousand crores. Lastly, it was reduced to Rs. 10 thousand crores, saying that now the banks have enough money. Did the government did the recapitalization in banks? In fact, only Rs. 11 lakh crore was given.
Why is the budget quiet on NPA, what are the proposals in this budget to resolve the problem of NPA. That is why we said that the budget is hollow, it has no direction, it has no foresight and it has no meaning.
Cashless and Digitalization
On the one side the Prime Minister is saying, the Finance Minister is also saying, about cashless and digitalization. This is a very confusing preaching. One thing is clear from today’s budget that there was no infrastructure of this in India, nor there was any preparation. Will they import POS machine, or make them. This has just come in this budget. When all this programme had come, Prime Minister had said that we had made all the arrangements, then it did not happen. There is not infrastructure till date and no announcement has been made in today’s budget that public investment be made for digitalization.
My question is straight to the Prime Minister and the Finance Minister as to how will they make this country cashless? The country is of 130 crore people. Here 94% transactions is in cash which is not black money. In China, it is 90%, in Japan it is 87%, in Germany it is around 80%, in France and UK, it is close to 70%. In America 56% transaction is in cash. There is no country in the world which is cashless, but to a country of 130 crore they are showing a dream of cashless and then the IT Minister also speaks with the Finance Minister and Prime Minister also speaks. How many people have smart phones in the country and how many will be buying that phone which will say whether you will punch or get biometric App? In villages, how many shopkeepers, small businessmen will have phone that will have biometric App? This is irresponsible act, it is an act of fooling people. The Finance Minister and Prime Minister should not make a mockery of the people. The reality is, our public sector banks have one lakh 32 thousand branches all over the country, there are two lakh 12 thousand ATMs. Sixty five percent villages do not have any banks. How many villages are there in India, six and a half lakh. City and semiurban areas have 73% branches of banks.
If you read the latest report of the RBI, you would know that 43% Indians do not have bank accounts. This figure becomes 55 crores. In Dhan-Jan Scheme, 26 crore has been mentioned, out of which more than 84% accounts do not have Rs. 5,000. In 60% accounts, you will not find thousand rupees. Nobody operates them. So, in a country like India where there are not more than 82,83 crore accounts, no address of the accounts. Somebody had opened their account, in which money is not deposited, money is not withdrawn, who will give them credit cards, this is my question to the Finance Minister and the Prime Minister. In villages, people keep money with them, because there were no banks. Therefore, they use to keep 5001000 notes, slowly they started saving them, for which the government has not apologized. There is no proposal till date as to how will their loss be compensated?
Cooperative and Rural Bank
Even today, the people in villages carry on their business through Cooperative Bank and Rural Bank. In the demonetization that has happened today, the Cooperative and Rural Banks have been kept aside. Neither they were able to change their old notes, nor they were given new notes and the 2000 note, which they say that Rs. 9 lakh crore has come back, after demonetization. Finance Minister, please tell us how many Rs. 2000 notes were there in the Rs. 9 lakh crores? Till you do not print notes of Rs. 500, Rs. 100, Rs. 50 and Rs. 20, where will the person in village go with the Rs. 2000 and which shopkeeper will give him the change? You have done the re-demonetization wrongly, demonetization was done wrongly and you do not have courage to tell us in the budget as to how much money has come back, how much black money has come and how much Rs. 2000 notes were there?
One more thing is, that India tops the world in indirect taxes.
Money has increased, truly it has increased. I had seen it closely as to where it had increased? In May, 2014, the crude that was imported in India, petrol and diesel which we use, the price ranged between 109 and 114 dollars per barrel, last year the price of crude per barrel was approximately around 41 dollars. Only recently the price has gone above 50 dollars. At that time the price of petrol in Delhi was Rs. 71, today also it is around the same price. Diesel at that time was selling at the same price at which it is selling now. In international market the price have fallen below half rate, but what happened? The custom and excise duty which is imposed. The price of petrol were continuously going down in international market and the government increased their custom, excise, Central excise, cess, surcharge. The total amount that was collected was 91 thousand 491 crores in which I will just talk about excise just on petroleum products which amounted to 60 thousand and 796 crores. So, whose money is with the government? Your money is in the banks, this too they are taking, are taking from the general consumer and the subsidy on petroleum products, the government has made a big saving. The government has reduced 39% subsidy on petroleum products, whereas the central custom advolerum duty excise is increasing, they are snatching your money and keeping with them by which their income has increased and the subsidy which you receive has been reduced.
The budget has been brought before time just to impress the voters and to misguide the country. I had told the government that we have doubt over their intention. The claims made in the budget are wrong. You are preparing the budget on the projections of six months. How is your train running on the tracks, you have not given the details.
As far as the affect on the elections in five states, do these five states are part of India or not? If you make false claims in the budget, that so much has increased, so much we have given, which denies the ground realities. As far as the question of increase in midway of MGNREGA, and after the hue and cry in the villages after demonetization it became a compulsion to increase it to 300 days.