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Economic Survey:

It is hard to find a scientific perspective or impartial fact based approach in the Economic survey for the financial year 2020-21. It has been shamefully converted into a self-flattering propaganda tool to cover up the failures of the BJP government and propagating lies. It says 'Unlike Oscar Wilde's cynic, "who knows the price of everything and the value of nothing," India's policy response to the pandemic stemmed fundamentally from the humane principle advocated eloquently in the Mahabharata that "Saving a life that is in jeopardy is the origin of dharma." The Economic Survey praises Government of India prioritizes the value of human life over the price of a temporary contraction of the economy. Govt focused on saving lives and livelihoods, recognizing that GDP growth can be restored but lost human lives can never be got back. Just because the ES invert and falsify truth doesn't mean that people will forget who the real cynic is!. ES hailed that the BJP govt's general lockdown measures have protected 37 lakh people from corona infection and prevented 1 lakh deaths. But it closes its eyes not to see how many job losses, lives, livelihoods have been lost due to the high handed lockdown.

The Economic Survey has repeatedly claimed a 'V' shaped recovery in the economy. That can be possible only after the economy gets back to its pre-corona level. Even according to government statistics, the economy is contracted by 7.7 percent in 2020-21. The International Monetary Fund (IMF) reported that the Indian economy would return to its pre-Covid-19 level only by 2025. But the economic survey's exaggerated estimate says the Indian economy will grow by 11 percent by 2022!

ES says Credit rating agencies are inappropriately downgrading India's sovereign credit rating, pay no heed to them, the Indian government can spend without fear. But why the same argument can't be extended to inside India. Why state governments are pushed to borrow at a higher rate compared to the central government, why MSMEs are pushed to borrow at a high rate when corporates get cheap credit. On what basis can these be justified?

The economic survey also points out that in emerging economies such as India and China, the private sector will not be affected by government borrowing and spending, but it will only stimulate private sector activity. Then the question arises why then the Indian government without expanding its fiscal space following austerity measures even after Covid-19 devastated the economy. The ES says developed countries have given fiscal stimulus during the on-start of the crisis, which need not translate into stimulating demand but our Indian govt has provided the fiscal stimulus in a right timely manner which made it efficient.

The Economic Survey praises that the states implementing the AYUSHMAN scheme have increased medical insurance coverage, reduced infant mortality rates, child mortality rate, improved use of family planning services and increased awareness about HIV / AIDS, comparing to the states not implementing it. ES propagate an unbelievable lie by saying that poor families disproportionately benefited most from basic necessities like drinking water, housing, sanitation from public services than the rich families who has to get it from the private sector.

The Oxfam report suggests that as economic inequality in India has raised sharply, taxes should be levied on the super-rich. But what the economic survey suggests is, economic redistribution can be possible only by maximizing economic growth or increasing the overall pie but not at the present stage.

Economic survey says although socio-economic inequalities cannot be reduced through economic growth, poverty can be reduced. It is like arguing even if caste cannot be eliminated; it is enough if we reduce untouchability. Unlike developed countries, increasing economic growth (GDP) in India can reduce inequality and poverty, also says the economic survey.

ES puts forward a liberal suggestion arguing it is only over-regulation of the economy in India that is the cause of the inefficient process, and the regulations should be relaxed and eased to make it efficient. ES also says Debt levels can only be reduced when economic growth (GDP) is high. But high growth cannot be achieved through low debt, so what the survey suggests is India should run on the path of increasing GDP neglecting its people.

Annual Financial Statement 2021-22

The digital release of the budget documents can be considered as the only highlight of this year's budget report. As neither the people nor the opposition will come forward to eulogize or appreciate the policies of the neoliberal dictatorial BJP government, it has once again used the budget documents as an opportunity for propaganda as usual.

The finance minister claims that the BJP government's prompt lockdown have prevented the loss of lives, livelihoods. India now has one of the lowest death rate of 112 per million population and one of the lowest active cases of about 130 per million. This has laid the foundation to the revival we are seeing now in the economy. She takes pride in swiftly implementing neoliberal reforms which were opposed by the people and the opposition such as farm laws, labor laws, commercialization of the mineral sector and production linked incentive etc.

It is worth mentioning again that the distribution of food grains through PDS, the Farmers subsidy scheme, the free LPG scheme, all of these were there even before the pandemic but all these are clumped together as new schemes in the fiscal stimulus to give the impression of provided a big fiscal stimulus. The Finance Minister falsely claims BJP Govt has given a Rs 27.1 lakh crore, or 13% GDP fiscal stimulus. The Prime Minister's Garib Kalyan Yojana, three-rounds of Atma Nirbar Yojanas provided for the poorest sections of society, the poor, Dalits, tribals, the elderly, migrant workers and children are claimed to be equivalent of five mini budgets!.

The BJP government has provided less than 5 per cent of fiscal stimulus, most of which are credit schemes. The RTI reply reveals that even PM-Kisan fund (Rs. 6000) was not provided to eligible farmers but to income taxpayers, ineligible beneficiaries. For 2021-22 Prime Minister's Kisan Fund has been allocated only 65000 crores which is less than Rs 15,000 crore of last year's allocation.

The BJP government, which does not care an iota about the welfare of farmers, has allocated Rs 7474 crore less comparing to last year for the farming sector. 1.11 lakh crore was allocated for the 100-day MNREGA Scheme last year, but this year only Rs 73000 crore has been allocated despite a sharp rise in unemployment. FM announced about creating a portal for collecting information on migrant workers, informal workers and construction workers. But not a single rupee has been allocated for them!.

2, 23, 846 lakh crore has been earmarked for the Health and Welfare. But schemes which give basic necessities like Jal Jeevan project, Swach Bharat for urban sanitation are clubbed into this category!. 35000 crore has been earmarked for the Covid-19 vaccine.

The BJP government has allocated just Rs 65350 crore for higher education while it promised to allocate 6 per cent under the new education policy.

1.97 lakh crore allocated for production linked incentives (PLI) to 13 sectors to promote exports which are going to benefit only multinational companies and big corporates. But only Rs 15,700 crore has been allocated to MSMEs.

Privatization:

Bharat Petroleum, Air India, Shipbuilding Company of India, Indian Container Corporation, IDBI Bank, PEML, Pawan Hans, Neelachal Ispat Nigam and many more are earmarked for sale to the private sector in 2021-22. Two Public Sector Banks, along with IDBI and General Insurance company, will also be privatized. Govt is also planning to bring an initial public offering of LIC's shares.

Idle assets will not contribute to 'Atmanirpar Bharat' so noncore assets and lands will be monetised a new definition of 'self-reliance' given by FM. In the name of economic self-reliance, govt is planning to sell all public sector companies except 4 in the strategic sector, and all the companies in non-strategic sectors are going to be privatized. I) Atomic energy, space, defence, ii) Petroleum, Coal, Other Minerals iii)Transport and telecommunications iv) Banking, insurance and financial services have been identified as strategic sectors. Self-reliance only in words. Subservient to finance capital in deeds.

The BJP government is going to incentivize states also to privatize public sector companies. The government has set a target of raising Rs 1,75,000 crore by privatizing public sector companies in the 2021-22 financial year.

FM has announced infrastructure will be developed further by new highway projects and railway projects, Funds for which will be raised by monetising public infrastructure assets. Why are highways to be sold? To build new highways!. Why are railway assets to be sold? To build new railway tracks! How this can be considered as growth. Who cried out for such plans, for whom these schemes are planned! Who else but only the big corporate contractors are to be benefited from all these.

In the name of infrastructure development, they will sell off all public assets and implement highway projects that will devastate marginalized people and natural resources, which in no way goes with the interests of the people.

In the Bharatmala project, Govt has already awarded more than 13,000 km of roads, of which 3,800 km of highways are constructed. By March FM says they would be awarding another 8,500 kms and complete an additional 11,000 kms of national highway corridors.

Assembly elections are forthcoming in Tamil Nadu, Kerala, West Bengal and Assam, The BJP government with new concern and attention announced new infrastructure projects to these states, with an unprecedented care Rs.1000 crore has been allocated for the welfare of tea plantation workers, women and children in Assam and West Bengal!

In Tamil Nadu, an investment of Rs 1.03 lakh crore will be made for the implementation of the 3,500 km National Highway project, including the Madurai-Kollam route and the Chittoor-Thatchur route. Chennai - Salem 277 km expressway announced to be launched in 2021-22. It has been announced that Rs 63,246 crore will be allocated for the Chennai Metro expansion and a seaweed park will be set up in Chennai.

India already has more highways than it needs. If there was a real concern for the people, additional funds should have been allocated to improve public bus services but only Rs 18,000 crore has been allocated to the public transport sector. Lakh crores are allocated for roads, but only thousands of crores are allocated for the public transport sector. In fact, what we need is a high allocation for the public transport system, not highways that pay tolls to big corporates.

Funding for new infrastructure projects will be raised through the sale of public sector infrastructure assets. Five roads worth Rs 5,000 crore of the National Highways Authority of India and the PGCIL assets worth Rs 7000 crore will be sold to domestic and foreign investors. Dedicated Freight Corridor assets will be monetized. The remaining unsold airports and their assets will also be monetised. National Highways operational toll roads, GAIL, IOCL, HPCL's oil and gas pipelines, PGCIL, AII airport assets, other railway infrastructure assets, public sector warehouses such as Central Warehousing Corporation, National Agricultural Cooperative Federation of India, sports Stadiums will also be monetized.

The management responsibilities of the ports will be privatized. It has also been announced that seven projects worth over Rs 2,000 crore in major ports will be implemented through a public-private partnership.

It has been announced that a process of decriminalizing of limited-liability Partnerships (LLPs) will be initiated and one-person companies are allowed to grow without any restrictions. The capital gains tax exemption for investments in start-ups will be extended for one more year.

Rs 4,000 crore has been earmarked for deep-sea surveys a five-year plan to conserve deep-sea biodiversity. What is the real motive of the plan? Is it really for the conservation of deep-sea bio-diversity? or a prelude to allow private companies to plunder new deep-sea resources?

The budget expenditure in the financial year 2021-2022 is estimated at Rs 34.83 lakh crores. The Central govt's tax revenue, expenditure have been unreliably overestimated for FY 2020-21 which is going to be continued in 2021-22. Only time will tell how much of what is promised is actually spend. The fiscal deficit for 2020-21 is estimated at 9.5% of GDP. The fiscal deficit is projected at 6.8 percent for 2021-22. It has been announced that Rs 5.54 lakh crore will be allocated for capital expenditure for 2021-22, which is 34.5 per cent more than that of the previous year. FM proposed to discontinue the NSSF Loan to FCI for Food Subsidy and accordingly Budget Provisions have been made in RE 2020-21 and BE 2021-22. It is questionable how many more years the austerity of the central government will allow it to fund for FCI or Is there a plan behind this to close the PDS.

Cooperative Federalism!:

It is unjust to expect states to reduce the fiscal deficit to 3 percent by 2023-24 when central govt is given a longer 5 year time to reduce fiscal deficit to 4.5 per cent i.e by 2025-2026.

As per the recommendation of the Fifteenth Finance Commission, the number of Centrally Sponsored Schemes are to be reduced further. The central government has promised to give 41 per cent of the tax revenue to the states as per the recommendation of the Fifteenth Finance Committee. Not even once the central government has allocated 42 per cent tax revenue to states as recommended by the 14th Finance Commission is a fact. As per the recommendation of the 15th Finance Commission, it has been announced that in 2021-2022, states will be allowed to borrow 4 per cent of the gross domestic product and 0.5 per cent additional borrowing will be allowed subject to conditions.

Taxation:

During the recession, the profits of big companies have increased. With income inequality and economic inequality soaring, it is possible to increase direct tax revenue by increasing the direct taxes of the super-rich and by levying property taxes and allocating them effectively to the people. How can we expect this from BJP govt? The BJP government has given a concession of Rs 145000 crore to the big corporates by reducing the corporate tax. 23,200 crore concession to the upper class by reducing direct tax, It has given 20,000 crore stimulus to real estate sector, 50,000 crore stimulus to the export sector. The revenue foregone amounts to more than 2.5 lakh crores… How can the BJP government increase direct tax to the super-rich, whom it relies on electoral funding? No new change indirect tax has been announced. A new scheme to be implemented to ensure that NRIs are not subjected to double taxation.

The impetus to financialization:

The BJP government, which does not bother about stimulating the real economy, cared only about the FIRE economy. BJP govt is giving more and more concessions to boost the already inflated financial sector and the stock market. A new financial technology center ('Fin-Tech Center') is planned to be set up at the International Financial Services Center (GIFT), Gandhinagar International Financial Technology City, Gujarat. This will encourage the bond market, which makes it easier for big corporates to raise funds and also promote financial start-ups. Tax exemption for foreign funds invested in Gujarat International Financial Services Center, and Tax deduction for the investment division of foreign banks located in it are announced. But no plans have been announced to provide accessible credit to MSMEs that play a major role in the Indian economy.

The foreign direct investment (FDI) limit in insurance companies has been raised from 49 per cent to 74 per cent. It has been announced that the law will be amended to attract foreign financial investors to invest in the Infrastructure Investment Fund and the Real Estate Investment Fund.

The SEBI Act, 1992, the Deposit Act, 1996, the Securities and Exchange (Regulation) Act, 1956 and the Government Securities Act, 2007 will be integrated into a single code to promote the financial capital market and further facilitate financial transactions.

Dividend distribution tax was exempted last year to encourage stock market investments. To promote investment in Infrastructure finance investment stocks, real estate finance stocks, dividend payment to REIT/ InvIT are exempted from TDS. The Finance Minister has announced that the obligation to pay dividend tax will arise only after the declaration of dividend, as the dividend paid on shares cannot be assessed in advance for tax purposes.

FM also announced that foreign investors would be taxed at a very low rate on dividend income. Foreign sovereign treasury funds and pension funds are exempted from 100% tax on their income from investment in Indian infrastructure. To attract more foreign investment in the infrastructure sector, she also announced that the conditions imposed on investments— restrictions on private finance, restrictions on business operations, and conditions on direct investment in infrastructure — would be eased as they would make it harder for investors. Infrastructure Debt Funds are made eligible to raise funds by issuing Zero-Coupon Bonds.

Additional deduction of interest, amounting to `1.5 lakh, for home loan taken has been extended for another year. The tax exemption given to buyers and sellers of houses at 10 per cent below the market price has now been increased to 10-20 per cent. One year tax exemption has been given to promote affordable housing schemes. This move is not going to provide affordable housing to the needy. The only people who make use of this are the real estate companies. Companies that lease aircraft are exempt from the capital gains tax, aircraft lease rentals paid to foreign lessors are exempted from tax.

Indirect tax

Customs tax:

As metal producers in India have acted like cartels and drastically raised the price of metal raw materials. Small firms are struggling and asked the government to intervene to bring them under regulation. But BJP government, instead of regulating the Indian producers, has reduced the import duty on metal raw materials like iron, steel and copper scrap. This is not a sustainable solution at all. Govt has also reduced tariffs on gold, silver, platinum, which will eventually increase the import bills.

Import duties of electronics, spare parts and solar panels have been increased to boost domestic production.

New Cess has been imposed to raise funds to promote agricultural infrastructure called Agricultural Infrastructure and Development cess(AIDC).2.5% Agricultural Infrastructure Development cess is imposed on gold and silver imports. Agricultural infrastructure development cess has been imposed on petrol, diesel, at the same time the additional excise duty on petrol and diesel has been reduced to Rs 2.5 per liter of petrol and Rs 4 per liter of diesel.

Import tax on Alcoholic beverages (100%), palm oil (17.5%), soybean, sunflower oil (20%), apples (35%) Coal, lignite and charcoal (1.5%) Fertilizer (urea) (5%), peas (40%) is reduced, and Agricultural Infrastructure Development cess is imposed on them in such a way that there is no change in the import price. But there is no mention of how the funds raised through this agricultural infrastructure development cess will be utilized. The government has introduced three Farm laws to monopolize agriculture market in favor of big corporates. After ignoring the demands of the farmers struggling in Delhi and all across India, now this agricultural infrastructure development cess has been brought in as an eye-wash to create an impression that govt is acting in the interests of farmers.

In total, there is no plan in the budget to create new jobs for the people affected by the recession, it allocated very less amount even to the minimum job guarantee scheme MNREGA than last year. There is no plan to alleviate the suffering of migrant workers and farmers. No plans to promote mass consumption and improve aggregate demand. We have once again been betrayed by a financializing pro-stock-market budget which favors only the big corporates.

- Samantha K.S.

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