FULL TRANSCRIPT

Madam, I rise to speak on the Union Budget. Today is the three month completion of demonetisation. I take this opportunity to offer my condolences to the families of more than 150 people who died on the queues due to demonetisation. This House has not adopted a condolence resolution but I propose that a condolence should be made for them. In Bengal one man died in Kanchrapara on the line; he had heart attack while standing in the queue. Before anybody could take him to hospital he died.

Jaitley ji has presented a controversial budget.  The Finance Minister has not rocked any boat. He has gone on a conservative path. And so there is no hype and hoopla over his budget. Now why the Budget is conservative? There is an opportunity for him to take new paths in reform. Why he did not take that?

Let me put it this way that the expectation or the speculation of the Government was that they will have a windfall of four to five lakh crores due to demonetisation. Fifteen and half lakhs were demonetised. They expected that only 10 lakh crores would be deposited. So 5 lakh crores will be with the reserve bank. They will pass it on to the Government and that’s why the Government floated this idea of universal basic income through the economic survey. The Government has not been able to do any such thing because there is no money in the kitty. Actually as much as 15 lakh crores must have been deposited in the banks, which is why the Government is not coming forward to speak on the Budget.

Now Madam speaking on the Budget the total expenditure is said to be Rs 21.6 lakh crores which has only increased by 6.6 percent. Normally it should increase by 10 percent.

Out of that, Rs 16 lakh crore is the government’s revenue income which leaves a gap of five and a half Lakh crore; this will be borrowings. So, the government will borrow this much amount to fund their projects. Tax revenue will be up but non-tax revenue – which rose last year due to sell of  spectrum – will be down by as much as 13.7 percent. Capital receipt is expected on the ground of disinvestment. But, it is doubtful if the government’s target of disinvestment will be filled. Up to December, only Rs 23,000 crore have been found due to disinvestment. So, the government will not be able to meet its target of disinvestment.

Railways, which he took over forcibly, has a Budget of Rs 1.31 lakh crore, the Railway Minister could not even protest. But, after the Finance Minister took over the job of the Railway Minister, two major accidents have taken place – one in Kanpur Dehat, 146 people died; and another, Hirakhand Express where 36 people died. So, Railways safety- for which Rs 1 lakh crore is promised – is in very bad shape.

Madam, the Defense expenditure is set at Rs 2.75 lakh crore which is only 26 percent of China’s military budget. We want to become a big nation, strong nation. But, when spending is concerned, we are spending only 26 percent of China’s military budget. China has got the newest missile with multi-polar missile, together they will one warhead carry 10 missiles and we are far behind China.

Now Madam, the main problem in this Budget, why the government could not spend more money, is that there is no money in the kitty. I mentioned that due to failure of demonetisation, there will be no financial bonanza for the Govt.

Now what will this lead to Madam? This will lead to severe joblessness. I would like to share some figures with you. This was a Budget where government could have taken a big step towards jobs. A million people are entering the job market every month and in 2015, of which figures are available, only 1,35,000 jobs were created. So there is no investment by the private sector in the Indian economy. Where will the jobs come from, that is the big question.

They said that for job creation the youth needs to be skilled. They put a target of 400 million employable youths in seven years. Now of this, only 1.76 million has been skilled out of 400 million and only 5.8 lakh have completed the course. So there is a serious shortfall in skilled Indians. Unemployment will grow in the absence of private sector investment. This will be a major problem that government has not attended to.

Now let us see Madam how much the government is spending. The government has rejected the option to boost aggregate demand to cut indirect taxes specially excise duty and service tax which affects everybody. This would have given relief to crores of people; the government will pay a heavy price in terms of poor demands, lower price, and fewer jobs and closures of MSMEs. Also madam the Gross Fixed Capital Formation, meaning net investment has constantly shrunk and was negative 2% in 2016–17.

There is nothing new in the Budget regarding strategy to revive private and public investment.  The other thing that to be noticed in this budget is the talk of real concern towards farmers.The budget does not even mention the word Minimum Support Price to farmers, which is absolutely essential. Minimum Support Price at the time of acute agrarian distress is not there, so the government is not able to provide relief to the farmers at this crucial time. Demonetisation has affected farmers, farm workers, manual labourers, self employed artisans, and micro small and medium business persons. They lost crores of rupees in terms of wages, incomes and capital. There is absolutely nothing for these sections. There is little.

Mr. Jaitley had the difficult task of damage control on behalf of his Prime Minster because many sections of people were affected by demonetisation. Many sections were angry, so he has given three sops to these sections.

One is towards the middle class. For income between Rs 2.5 lakh and Rs 5 lakh, income tax has been reduced from 10 per cent to 5 per cent.

Two, the MSMEs, as I had mentioned earlier, have been affected badly. So, another sop: for turnover upto Rs 50 crore, the corporate tax has been reduced to 25 per cent – the corporate tax.

And three, they have kept allocation for MGNREGA at Rs 48,000 crore – though it is a very small increase, as last year it was Rs 47,499 crore, so it has been increased by only 1.1 per cent. The need was to increase NREGA by at least 10 to 15 per cent because many people who have lost their jobs are coming back to their villages.

Madam, in Pradhan Mantri Gram Sadak Yojana, the last year’s revised estimate was Rs 19,000 crore, this year too it is Rs 19,000 crore, therefore zero per cent increase. Now, allocation for Pradhan Mantri Fasal Bima Yojana was Rs 13,240 crore, this year it is Rs 9,000 crore – this means a reduction of 32 per cent. They are talking of the villages, and this is what is happening to the villages.

Again, as far as the cities are mentioned, they launched the ‘Smart City’ programme with much fanfare. Now, for the smart city mission, the estimate has been lowered from Rs 4,676 crore to Rs 4,000 crore. So where is the focus? Where is the thrust of development in urban and rural areas, I want to put to the Hon’ble Minister.

Now, as far as the direct taxes are concerned, I mentioned earlier that two sops have been given – one to the salaried class and another to the MSME. There have been no major cuts in excise. I have no objection to this because he wants to keep the tax net big; he has given a lot of logic that India is an under-taxed country, that the ratio of our gross tax income to GDP is low.  Actually he was planning to increase the taxes, but faced with the anger of the middle classes, the Finance Minister has not increased the taxes.

Now, the Finance Minister has tried to be path-breaking. He is saying that he wants a new law on the funding of political parties. Instead of Rs 20,000 as individual donation, only Rs 2,000 can be donated. Now what is the problem in this – because instead of printing one receipt, you will print ten receipts. They are saying that you can buy election bonds. If you give your name to the bank you can buy election bonds. That’s why the RBI Act will be amended. Now who will want to go to a bank, write his name and buy an electoral bond? Because the Government can always access the bank to determine who have bought election bonds. This is not the way. Our party yesterday demanded that there should be State funding of elections. If you had a bonanza you should have State funding of elections. Let the Government finance the major expenditures of the successful candidates as it happens in Germany and in many other countries of the West. They have not talked about such election reforms.

Madam, I’ve already told you that this Budget is a conservative Budget. Just as there has been no new taxation, there has been no major rebate in taxes which will help to create employment. I’ve mentioned that demonetisation has failed to provide the financial bonanza to the Government. Demonetisation has harmed the economy. Now, even in the Economic Survey, produced by the Government of India, they have said three things. Demonetisation will have three problems. One is the shocks of demonetisation – aggregate demand shock (demand will fall), aggregate supply shock (production would fall) and aggregate uncertainty shock (people will be very wary of investing money).

This is not all. The country faces a grave crisis in the sense that oil prices may rise this year; this year subsidy has been lowered for petroleum – it may suddenly shoot up. Number two: trade tension because of the new protectionist policy of the United States may reduce global growth, and that will affect India too.

This Budget does not provide any vision. The Economic Survey of the Government of India says that we need a vision. Arvind Subramanian is a truthful man and he mentioned something with which I will end. He said, “A new economic vision is needed. If that vision is not found, India will waste the second half of this youth bulge the way it wasted the first. The demographic dividend with the youth bulge is already lost and it will have peaked by 2020”.

So this Budget does not give us a bright picture of the economy. It just stays a conservative Budget in which the Minister has tried to hold the baby for the Prime Minister and done damage control. He was not able to take any major decision. That’s why I cannot support the Budget.