July 25, 2024
Saugata Ray’s speech on the Union Budget for 2024-25
I rise to speak on the Budget. It is good that the Finance Minister is here. Yesterday, Shri Abhishek Banerjee from our Party had enunciated all the objections we have to the Budget, particularly with regard to the dues to the State of West Bengal on account of MGNREGA and Indira Awaas Yojana. The Government has always been strangely silent on this demand of West Bengal. I again reiterate the same. This has proved to be the most divisive Budget in recent times. It is because a Budget is supposed to present the future plans of the Government. But this is a Budget which is called as the ‘AB Budget – Andhra-Bihar Budget’. … They have allotted Rs. 59,000 crore to Bihar and Rs. 15,000 crore to Andhra Pradesh for a new Capital. At least three Chief Ministers of the Congress Party, the Chief Minister of Punjab, and the Chief Minister of Tamil Nadu have opposed the Budget. And, of course, the Chief Minister of West Bengal has called this Budget as an exercise to save the Government. She also said that this Budget gave zero to West Bengal. … Yes, the Chief Minister of Kerala has also opposed the Budget. Madam, I read the Budget Speech several times very carefully. It is a copy-paste job. The Congress has already complained that they have taken some ideas from their Nyay Patra. Just have a look at Point No. 26 which relates to education loans. It is the exact programme launched by the West Bengal Government for students. The amount of Rs. 10 lakh is also the same. … You are not even original. … I do not expect the Finance Minister to be like Dr. Manmohan Singh, as she is not a Ph.D. from Oxford, or like Mr. Chidambaram who has got the Management degree from Harvard. She is from our own JNU. … But the problem is that she is bereft of new ideas which is why this Budget reads very dull. … Then, you realize that all the notes in the Budget have come from the PMO, whatever the PMO has said –she has no original idea –she has put it in the Budget by way of copy and paste method. Now, this year, the Finance Minister vowed to spend Rs.2 lakh croreover five years on five skills, which are part of what she called the ‘Prime Minister’s Package’,aimed at spurring jobs and imparting skills to 4.1 crore youth. This marked a shift in strategy from the previous Governments, preferred reliance in letting multiplier and trickle-down effects. Formerly, they said, you give a lot of money, something will trickle down. But earlier they did not give any direct handouts to any section of society. The trigger, why the Budget has changed course, is due to the BJP’s electoral reverses, now there is a Government without a majority. Abhishek called it ‘shaky Government’, I would call it further, ‘brittle Government’, just like a glass which will break at any time. The Finance Minister tried to address the perceived disenchantment among the youth, the salaried class, the farmers and the small entrepreneurs. One important thing – Madam, you should take note of it –that just before the elections, the revelations came about the donations received for electoral bonds. The BJP alone got 50 per cent of all electoral bonds received by all political parties. Which meant what? This is a Government of the moneyed-class, as some people say of Adani’s and Ambani’s, who contributed to your elections. .. They contributed even to you – Please do not forget. .. मैडम, अडाणी जकसी का नाम नहीं है, यह टाइटल है।… But in spite of all this, the stock market has reacted badly. It was probably because of the Capital Gains Tax. So, in spite of all this, the capitalists are not happy. Now, Madam, I will emphasise what the basic problems of the Indian economy are, and whether they have been addressed by the Finance Minister or not. According to data from the Centre for Monitoring Indian Economy, unemployment rate rose to a high of 9.2 per cent in June 2024. The female unemployment rate was higher than the national average of 18.5 per cent in June 2024. Now, we have been doing very poorly in terms of employment generation. You may be knowing, Madam, that there have been job losses in the IT sector. With artificial intelligence (Artificial Intelligence) coming in, there is fear of further job losses in what was seen as the most profitable part of the Indian economy. The second big problem in the Indian economy is rising inflation. The annual consumer inflation rate in India rose to 5.08 per cent in June 2024, well above the market expectations. Prices accelerated steeply for food – 9.36 per cent – which is responsible for nearly half of the weight of Indian consumer basket. One company called Kantar did a study and found that in 2024-25, 34 per cent households reported that they are finding it difficult to manage their expenses, indicating that a third of India is still under severe financial stress. The other problem is, Madam, the shrinking informal sector. This is what has sustained the economy for so long, but informal sector is in a grave crisis. As NSSO data shows, India’s 65 million informal or unincorporated sector enterprises employed 110 million workers. They are suffering very badly. What we call MSMEs are also suffering. The other big problem is falling private investment. The Finance Minister, in our presence, handed over a tax bonanza to the corporate sector, but the private investment has been falling. The Government has been hoping that large Indian corporations would step in and ramp up investment. They introduced production linked incentive schemes for big businesses, but all these incentives have failed to motivate private investments. They will spend money on their son’s marriage, but they will not invest in new enterprises. That is a big problem of the Indian economy. Lastly, we have the problem of shrinking labour productivity. Labour productivity contracted in FY23 compared to the preceding year, thus highlighting India’s lack of competitiveness in industrial sectors. There is what is called extreme disparity in wealth and income distribution which has pushed the economy to a state of ‘gated stagflation’. That is what the economy is today. The Finance Minister must resort to Keynesian prescription of boosting aggregate demand by allocating more Government funds for the social sector and targeted welfare programmes like Mahatma Gandhi National Rural Employment Guarantee Scheme. Increased Government spending will boost household consumption which will stimulate private investment. The Finance Minister has not gone this route at all. Madam, let me now come to the very important study of the social sector. How much money has the Government doled out to the poor? The allocation for school education has increased only by a nominal amount of Rs. 5,000 crore and for higher education by only Rs. 3,000 crore. In both the cases, the estimated recoveries are substantially higher compared to previous year, indicating higher fees and self-financing schemes in educational institutions. Allocation for health and family welfare has barely increased by Rs. 1,500 crore. So, health and education, as Dr. Amartya Sen is fond of saying, are the foundations of the economy and there, we are not having enough money. There is hardly any increase in food subsidy too, despite the need for expanding coverage to the current population level. Madam, lastly smaller yet critical schemes – please listen to this, Madam – that address vulnerable population have not got much attention. There is only a slight increase to Rs. 12,467 crore for the Poshan Scheme, that is, school mid-day meal scheme. That is actually less than the actual expenditure on this scheme. The other thing is that budgetary allocation for anganwadis – Madam, you are familiar with all these things – is only Rs. 21,200 crore. It was only Rs. 20,554 crore last year. What does it mean? There is clearly no hope for higher salaries for anganwadi workers which has not been revised since 2018. It is shameful that you have no sympathy for the poor anganwadi workers. … The other thing I want to mention is the budget for National Social Assistance Scheme. Madam, you are an MP. Old people come to you for widow pension and disabled pension. Look at this. The budget for National Social Assistance Programme, which gives social security pension to the elderly single women and disabled, remains unchanged – not a rupee is added – at Rs. 9,652 crore. This is a reduction in real terms taking inflation into account. Madam, please consider this. Lastly, I will come to the new package. They say it is the Prime Minister’s package for employment and skilling, which includes Government sponsored internships, formalisation of jobs through incentives for Employees Provident Fund Organisation enrolment and skill development programmes. These schemes do not seem, Madam, may I say, very impressive when one looks at the budgetary allocation. You say that you are taking care of unemployment but the entire package has an allocation of Rs. 2 lakh crore over a period of five years. How much per year is Rs. 2 lakh crore amount for five years? It comes to Rs. 40,000 crore per year for employment generation. Further, the private sector is required to spend money towards this package from CSR funds. Earlier, private sector used to develop a school, a hospital, etc. Now, the Prime Minister is taking in the money from CSR fund. By allowing this, CSR fund through which companies contribute to society in some minimal way is now mandated to be used towards subsidising wages for themselves. How will this economy survive? Rather than discussing damping demand, stagnant wage, and what can be done to revive employment, the announcement only includes supply side schemes towards incentivising the private sector. You are like Milton Friedman. You are indulging in supply side economics. You are of the view that if you give more incentive to the private sector, they will create employment. Different versions of this have been tried earlier and failed. Whether this package will be any different, it remains to be seen. Madam, as I was saying earlier, this is a disappointing, anti-poor people scheme. One question is this. Madam, you have only discovered this now. You have been a Minister for seven years though you are not a trained economist. You are lucky that way. … She is not a trained economist. What is wrong in saying that? She is no Manmohan Singh. She is not even Chidambaram. She is not even Anantha Nageswaran. Why did you not act upon demands made by Bihar, Andhra Pradesh, and Odisha earlier? Why are you thinking of them now? It is only because of the political compulsions. In your brittle and unstable Government they are the crutches on which you lean, and your economy and Budget is going haywire or is lopsided because of all these things. India is more unequal now than in the 1920s. It is an unequal society that we have. During colonial rule we were still somewhat more equal than we are today. The Finance Minister, of course, has not dealt with inflation. There are only 10 words on inflation, which is the most important problem affecting everybody. I will just give one or two figures and wind up because my friend Shrimati Satabdi Roy Banerjee is due to speak and she is naturally feeling disappointed as I go on and on. I will wind up. They were saying that Rs. 11.11 lakh crore is given for infrastructure. Good! They think that is the real panacea or ready medicine for all the ills affecting us. Is it so? One infrastructure project will take five to 10 years to complete. There is an infrastructure project in your area, namely Dum Dum – Barasat Metro Line. How many years it has taken now? It is nowhere near completion. The problem with an infrastructure project is that it has long-term spill-off and no short-term spill-off. This does not appeal. I will give a figure. They say that Mr. Ashwini Vaishnaw is a great Railway Minister, and that he has introduced Vande Bharat trains. In FY 2024, the Railways are at 5.42 per cent of the Budget. It is known that the Budget is Rs. 48 lakh crore and revenue is Rs. 32 lakh crore. Now, Railways have come down from 5.42 per cent to 5.3 per cent. As regards Civil Aviation, young Mr. Rammohan Naidu was waxing eloquent in the morning. … Madam, I am winding up. Even on Aviation, the allocation is 0.05 per cent of the Budget; and on shipping, the allocation is 0.05 per cent. As regards social sector spending, on health it is only 1.85 per cent of the Budget. On Rural Development, which is most important, it is only 5.51 per cent of the Budget. As regards higher education, you want to educate the people, privatise education and people will learn on their own, but the Finance Minister’s prescription is higher education is 0.99 per cent of the Budget. The allocation for school education has come down from 1.61 per cent to 1.51 per cent of the Budget. … Madam, this Budget will not give relief to the poor in the country. This Budget will not spur investment. This Budget will not take from the rich and give it to the poor. This Budget will not stop conspicuous consumption by those who indulge in marriage feats. This Budget is for poor people who just look and gape at whatever happens in Mumbai — all the stars descending in Mumbai. With that, I end my submission on the Budget. Thank you, Madam.
