A Short Review by Delhi Forum
(Budget is prepared to execute the State Policy and Constitutional mandate of a Sovereign Republic state. The Finance minister leads the budgeting process and its control while the citizens develop an understanding over it according to the atmosphere created by the media and how the political parties project it. However, there exists difference in opinion of the media, scholars, activists, NGOs, corporates and unemployed according to how they have been impacted by the budget. In its endeavor to strengthen people’s movements for their rights over land, water, forests Delhi Forum seeks to analyze the budget from the lens of the people who are most marginalized and have been excluded from participating in this process of ‘development’. Historically, it is for the first time that the Plan Budget has been reduced and we feel the need to question the government for stepping back from playing the role of a welfare state.)
Introduction:
The budget presented on the morning of 28thof February 2015 was quite an event this time. The presence of a new government at Centre, after 10 years rule of UPA came to an end, made everyone sit in front of the TV and listen to the wise words of Arun Jaitley very intently. The presentation however was not much different from what the previous government had already said and done in its own tenure because even this time, the budget again tilted in favor of the rich and went against the marginalized sections of the society.
The budget is largely in line with the pro – corporate and anti – poor stance that the NDA has been following. After pushing for various ordinances in past few months which will invariably favor the corporates, it was in fact essential for the government to push for reduction of corporate tax so as to supplement its scheme fully. While on one hand it is planning to make a law to tab black money, it has seen to it that more profits occur to the wealthiest in form of reduced taxation.
Underestimation of Disadvantages to the Poor:
In our economy where more and more people are getting employed within informal sector, not much has infact been done to increase social security measures like health, education or to improve the living conditions of poor through investing in housing. What we in fact see is the reduction in allocations to some very key ministries which are responsible for implementing policies for the marginalized sections.
It is first time when Plan Budget of the union of India is reduced from Rs. 5,75,000 Cr (FY 2014-15) to Rs. 4,65,277 Cr (2015-16). It is a reduction by Rs. 1,09,723 Cr. The reduction in plan budget essentially implies that the government has consciously decided to spend lesser for the betterment of people.
While this year the entire plan budget has been reduced, in the last two years a huge amount of plan budget remained unutilized. In the financial year 2012-13, the plan budget i.e. the amount earmarked to be spent on public work and schemes was Rs. 5,21,025 crores while the actual utilization was 4,13,625 crores. Hence, an amount of Rs107400 Cr (roughly 20% of plan budget) which was supposed to be spent on development schemes for people, remained locked and untouched in the bank vaults. Similarly, in the financial year 2013-14, the plan budget was Rs5,55,322 Cr whereas utilization was just Rs4,53,327crore i.e. Rs. 101995 Cr (roughly 18%) remained unutilized. These figures indicate that the government has been failing continuously in spending money meant for development of the people and raises a serious question over it’s political will towards reducing the inequalities in this country.
From the Budget documents we can see the programs where plan budget size reduced. The allocation for SC/ST is reduced from Rs. 82935 Cr (FY 2014-15) to Rs. 50831 Cr (total reduction by Rs 32104 Cr). Similarly Plan size of the Department of Animal Husbandry, Dairying and Fisheries is reduced by Rs. 683 Cr, Reduction in the plan size of Department of Land Resources is Rs. 2,122 Cr. Budget of the Ministry of Textiles is reduced by Rs. 1,308 Cr. Major reductions are given in the following table.
Table – 1
| Ministry/Demand | Budget Estimate 2014-15 | Budget Estimate 2015-16 | Reduction in Plan Size | ||
| Plan | Non Plan | Plan | Non Plan | ||
| Transfers to State and Union Territory Governments | 72,332 | 65,000 | 36,000 | 89,190 | 36,332 |
| Department of School Education and Literacy | 51,828 | 3,287 | 39,039 | 3,181 | 12,790 |
| Ministry of Women and Child Development | 21,100 | 94 | 10,287 | 96 | 10,813 |
| Ministry of Water Resources | 13,237 | 600 | 3,607 | 625 | 9,630 |
| Ministry of Drinking Water and Sanitation | 15,260 | 7 | 6,236 | 8 | 9,024 |
| Department of Rural Development | 80,043 | 50 | 71,642 | 53 | 8,401 |
| Ministry of Panchayati Raj | 7,000 | 1 | 94 | 1 | 6,906 |
| Department of Health and Family Welfare | 30,645 | 4,518 | 24,549 | 5,104 | 6,096 |
| Department of Agriculture and Cooperation | 22,309 | 343 | 16,646 | 358 | 5,663 |
| Department of Financial Services | 14,100 | 7,536 | 9,805 | 15,062 | 4,295 |
| Ministry of Civil Aviation | 6,720 | 658 | 2,720 | 622 | 4,000 |
| Police | 10,427 | 49,024 | 7,372 | 54,753 | 3,055 |
| Department of Telecommunications | 7,500 | 7,028 | 5,200 | 8,275 | 2,300 |
| Department of Land Resources | 3,750 | 9 | 1,628 | 10 | 2,122 |
| Department of Economic Affairs | 9,931 | 6,875 | 8,465 | 8,774 | 1,466 |
| Ministry of Textiles | 4,831 | 866 | 3,523 | 751 | 1,308 |
| Department of Electronics and Information Technology | 3,815 | 114 | 2,568 | 62 | 1,247 |
| Department of Higher Education | 16,900 | 10,756 | 15,855 | 11,000 | 1,045 |
| Department of Urban Development | 16,508 | 1,120 | 15,676 | 1,156 | 832 |
| Department of Commerce | 2,226 | 3,628 | 1,425 | 3,666 | 801 |
| Ministry of Micro, Small and Medium Enterprises | 3,327 | 375 | 2,613 | 395 | 714 |
| Department of Animal Husbandry, Dairying and Fisheries | 2,174 | 92 | 1,491 | 94 | 683 |
| Ministry of New and Renewable Energy | 941 | 15 | 288 | 16 | 653 |
| Ministry of Environment and Forests | 2,043 | 213 | 1,447 | 235 | 596 |
| Ministry of Planning | 2,515 | 92 | 2,115 | 97 | 400 |
| Ministry of Tourism | 1,882 | 85 | 1,483 | 90 | 399 |
| Department of AIDS Control | 1,785 | 1,397 | 388 | ||
| Ministry of Culture | 1,835 | 676 | 1,455 | 714 | 380 |
| Ministry of Housing and Urban Poverty Alleviation | 6,000 | 9 | 5,625 | 9 | 375 |
| Department of Posts | 800 | 6,913 | 469 | 6,670 | 331 |
| Law and Justice | 1,103 | 944 | 807 | 2,717 | 296 |
| Ministry of Labour and Employment | 2,449 | 3,160 | 2,153 | 3,208 | 296 |
| Ministry of Food Processing Industries | 770 | 16 | 487 | 19 | 283 |
| Ministry of Youth Affairs and Sports | 1,643 | 126 | 1,389 | 152 | 254 |
| Department of Heavy Industry | 800 | 444 | 670 | 955 | 130 |
| Ministry of Statistics and Programme Implementation | 4,478 | 446 | 4,353 | 474 | 126 |
| Department of Food and Public Distribution | 330 | 1,15,327 | 212 | 1,25,000 | 118 |
| Ministry of Earth Sciences | 1,281 | 418 | 1,179 | 441 | 102 |
| Public Works | 476 | 1,825 | 378 | 1,949 | 98 |
| Ministry of Information and Broadcasting | 1,005 | 2,311 | 915 | 2,797 | 90 |
| Ministry of Home Affairs | 794 | 851 | 705 | 865 | 89 |
| Nuclear Power Schemes | 970 | 740 | 900 | 812 | 70 |
| Department of Ayurveda, Yoga &Naturopathy,Unani, Siddha and Homoeopathy ( AYUSH | 1,069 | 203 | 1,008 | 206 | 61 |
| Department of Fertilisers | 100 | 73,000 | 50 | 72,998 | 50 |
Taking a look at some of the key industries where mostly workers in traditional livelihoods are employed we find that almost all ministries such as the fisheries, textiles, animal husbandry have received a lower share in the budget this time with the only exception being in Handloom sector where plan size and non-plan size have increased by Rs. 55 Cr and Rs.7.49 Cr respectively.
(Table – 2) Ministry of Textiles and Handloom Sector
| Year | Textile Ministry | Handloom Sector | ||||
| Plan | Non Plan | Total | Plan | Non Plan | Total | |
| Budget 2014-2015 | 4831 | 866.4 | 5697 | 180 | 72.51 | 252.5 |
| Budget 2015-16 | 3523 | 751.5 | 4275 | 235 | 80 | 315 |
| Difference | 1308 | 115 | 1423 | -55 | -7.49 | -62.5 |
(Table – 3) Department of Animal Husbandry, Dairy and Fisheries
| Year | Dept of Animal Husbandry | Blue Revolution (Fisheries) | ||||
| Plan | Non Plan | Total | Plan | Non Plan | Total | |
| Budget 2014-2015 | 2174 | 92.3 | 2266.3 | 422.56 | 38.74 | 461.3 |
| Budget 2015-16 | 1491.1 | 94.29 | 1585.4 | 410.69 | 40.45 | 451.14 |
| Difference | 682.86 | -1.99 | 680.87 | 11.87 | 410.69 | 10.16 |
There is total reduction of 682 crores (31%) in the Plan budget of the Department of Animal Husbandry, Dairies and Fisheries as compared to the Plan budget of FY 2014-15. But reduction in the Plan Size of Blue Revolution is only 2% (11.87 Cr). The traditional Fishworkers have been constantly sidelined, first through introduction of exploitative policies like those suggested in the Meena Kumari Committee report and then by allocating lesser funds in the budget. They have been constantly struggling to survive the competition from foreign vessels and the encroachment of their sea shores by huge commercial tourism industry.
What is noteworthy is that while there is total reduction in the plan budget of Textiles Ministry of Rs. 1308 Cr but there is an increase in the Plan and Non-Plan budget of Handloom Sector. The handloom weavers have since past one year indulged in intense advocacy and research towards getting more stake in the budget through constant monitoring of the budget allocated to them.
Looking at trade – offs between Corporates and Public:
In the budget 2015-16 the government has reduced corporate tax from 30 to 25% along with an increase in the service tax by 2%. However, it needs to be seen how this step cleverly leads to and has always been leading to shifting the financial burden (in terms of taxation) on to the larger public while providing humongous benefits to a few corporates.
Let us look at the data from 2013-14 where we try to make sense of costs and benefits accruing to 3,10,716 corporate companies on one end and the rest of the population (henceforth mentioned as public) on the other:
(Table – 4) Data under various heads from Budget 2013-14
| Total Budget (B) (Plan budget + non plan budget) | 15,59,447 |
| Plan Budget (P) | 4,53,327 |
| Fiscal deficit * (F) at the end of 2014 (Borrowing) | 5,02,858 |
| Total Revenue accruing to 3,10,716 corporate companies (CR) | 11,10,946 |
| Profits to the Corporates (CP) | 7,42,095 |
| Revenue Forgone to Corporates (RF) | 5,72,923 |
| Total tax collected in this year (T =B – F) | 10,56,589 |
| Tax collected from the corporates (CT =CR-CP) | 3,68,851 |
| Tax collected from the public (TP = T – CT) | 6,48,097 |
(All figures mentioned in crores)
*Fiscal deficit denotes the difference between revenues collected and the expenditures done.
In the above table,the figures marked in red indicate the contrast in costs and benefits accruing to the corporates vs the public. While the government is spending merely Rs4,53,327 Cr(P) on the larger public it is collecting taxes as high as Rs6,48, 097 Cr (TP) from them. On the other hand, while it is spending as high as Rs5,72,923 Cr (RF i.e the amount of tax it did not collect from the corporates) it is collecting just Rs. 3,68,851 Cr (CT) as tax from them. While the tax collected from the public is almost twice of what’s collected from corporates, the amount that it is ready to spend on the corporates is disproportionately much more than what it is willing to allocate for spending on the public. What if within the same budget, the corporate tax was further reduced as it has happened this year?
Another thing that’s important to note is that giving tax exemptions to corporates leads to huge loss in revenues as the profits are quite large. Also, the amount spent on corporates is not just restricted to forgoing revenues but also includes other benefits like subsidies in consumption of other resources like land, water, electricity. Hence, the amount of money that the government actually spends for the corporates is much more than mere forgone revenues. In fact, it can be added that the labor reforms initiated by the government wherein contractual form of labor is being promoted is also a way of making the human resource cheaper for the corporates to use and afford.
We may also see that budget formation and its implementation has various components. From the 8 years of budget allocations given in Table – 5, it is clear that allocation in each component is increasing – Plan, Non-Plan, GDP, Revenue Forgone, Interest Payment and Fiscal Deficit. The efforts for controlling these components is not seen in the Budget Estimate in either of the Financial Year. GDP should grow, and therefore the Budget size should grow. But growth in revenue foregone, interest payment and fiscal deficit are not the indicator of development at all. In fact, on one hand all such components are increasing and on the other corporates are being made to contribute even lesser to cover such costs and more of being paid by the public.
Table – 5: Trend of the GDP, Budget and Liabilities in Budget Estimates
|
Year |
Budget | GDP – Advance Estimate | Revenue Foregone | Interest Payment | Fiscal Deficit = Borrowing | |
| Plan | Non Plan | |||||
| 2008-09 BE | 2,43,386 | 5,07,498 | 53,21,753 | 4,58,516 | 1,90,807 | 1,33,287 |
| 2009-10 BE | 3,25,149 | 6,95,689 | 61,64,178 | 4,82,432 | 2,25,511 | 4,00,996 |
| 2010-11 BE | 3,73,092 | 7,35,657 | 78,77,947 | 4,59,705 | 2,48,664 | 3,81,408 |
| 2011-12 BE | 4,41,547 | 8,16,182 | 89,12,179 | 5,33,583 | 2,67,986 | 4,12,817 |
| 2012-13 BE | 5,21,025 | 9,69,900 | 100,28,118 | 5,66,235 | 3,19,759 | 5,13,590 |
| 2013-14 BE | 5,55,322 | 11,09,975 | 113,55,073 | 5,72,923 | 3,70,684 | 5,42,499 |
| 2014-15 BE | 5,75,000 | 12,19,892 | 128,76,653 | 5,89,285 | 4,27,011 | 5,31,177 |
| 2015-16 BE | 4,65,277 | 12,13,224 | 141,08,945 | 4,56,145 | 5,55,649 | |
Source: Budget DOCUMENTS OF Union of India(All figures are in crores)
Conclusion:
A rosy picture has been painted by the NDA by announcing the words like ‘development’ and ‘infrastructure’. The infrastructure such as the roads, highways, railways are not so much being made for the poor but for serving the interests of the corporates who need these linkages to enter remotest of the areas and capture maximum resources. Infrastructure development should focus on serving the poor and no highway or industrial corridor shall be of any use to him as much as a road constructed in his village.While the irrigation facilities need to be spent on, when will the government begin to allocate land to the landless? The rant of Swachh Bharat is doing rounds everywhere but the most marginalized communities which have been made to keep the country clean since generations have been provided a lower share in this plan budget and no discussion to take them out of this servitude has ever been initiated. What is needed is not to just read the figures and numbers in the budget but to understand the ideology on which the brahmanical and capitalist government is functioning so as not to get caught in the web of words but be able to make a clear judgment on its plans and policies.
