February 7, 2018
Saugata Roy speaks on the Union Budget
Sir, this budget is a document of 32 pages and 166 points. Rs 24.42 lakh crore is the total expenditure in the budget. Now this budget should have covered the issues of Andhra Pradesh. As a party,Trinamool Party, had opposed the division of Andhra Pradesh and I had myself spoken in this House, against it. Certain things were promised in the Andhra Pradesh Reorganisation Bill and they should be fulfilled. Why should the allies of the Central Government stand in dharna in front of the House? This is a matter for the ruling Party to consider.
Sir, I want to say that the budget is coming at a bad time for the nation’s economy. The Economic Survey 2017-18 states clearly that the Indian economy’s growth rate had been significantly compromised by the demonetisation exercise and the part of the economy that suffered most on account of the policy was rural economy in general and the informal sector in particular. The Finance Minister has not talked about the disruptive effect of demonetisation and GST on the economy. Now, the Gujarat Election result has come with the same warning for the Government.
Now, Sir, inflation has again become a big concern. It has left behind the 4% comfort zone, mainly because the prices of food items. Budget Speech is silent about inflation which may cross 5.2%. With oil prices at 70$ a barron and Central Banks in different countries withdrawing monetary stimulus measures put in place after 2008, not sticking to borrowing targets. They prove to be dangerous. And here, they have exceeded our deficit financing target. This will involve more borrowing. And even Moody’s have considered this a very dangerous potent.
Sir, this budget is not a whole. There are different tensions between sectors of the economy. There is a difference between Davos Man and Make in India Man. in Davos Modi talks about opening your door and then he comes to India and says we will Make in India. But Make in India has been a total failure, a non-starter, and we are beginning to reverse our commitment to lowering customs duties. Sir, the Government is bluffing its way out of the three tensions of our country.
Sir, the government is laughing its way out of the three tensions in our country. Major tensions; rural versus urban, public sector versus private sector, global versus India. The government has, in the hastily cobbled-together budget betrayed its own nervousness.
The Indian economy faced the worst slowdown in five years according to CSO while macroeconomic shocks like demonetisation and GST are likely to have contributed to the slowdown. The root lies in the decline of investments. Actually investments have declined in the country and that is the root of all problems.
The budget has seen a disappointing cut in all outlays of major schemes this fiscal year. The schemes that we get, constant or reduced outlays are:
MNREGA – Rs 55,000 crores as in previous year,
Prime Minister Awas Yojana,
National Drinking Water Mission,
Swachh Bharat Mission – they spent crores of rupees in advertisements, even a film was made but then they reduced the allocation
National Health Mission, Midday Meal Scheme – shame, our young children will not get food
Interests on the subsidy for short-term farm credit,
North-East investment promotion, and,
Gram Jyoti Yojana.
The government has run out of steam. Sir, the Make In India, Start-up India, Digital India and Skill India programmes seem to have fallen by the oversight. Mudra scheme, which talked about the average mudra loan of Rs 43,000, is mere tokenism. It will not create a single job. Not a single job can be created with only Rs 40,000.
The budget did not provide tax relief to average tax payers. For middle-class earners and savers standard deduction and long term capital gains tax cancel out each other. Are you aware that the markets are bleeding in India and in The Times of India it says, ‘sensex dives 1275 points in a day over down crash LTCG’. What is this LTCG? Long term capital gains tax, which the middle-class with over one lakh income will have to pay tax and as a result if which the share prices are falling. The share prices have fallen to 33483, it has crossed 33000. This is the credit of Mr Jaitley’s budget that has brought down at one go, the share price of the whole country.
It has been said, that, the FM has failed the fiscal consolidation test. Fiscal deficit leakages for 2017-18 and 2018-19 will raise doubts about India’s commitment to fiscal consolidation.
Sir, the big disappointments in the Budget. What are they? Fiscal deficit, export – very bad, agriculture exports are stuck because of this GST, which is a every-day problem. Agriculture, healthcare, jobs, investment and credit,tax relief and slashing allocations.
Sir, Mr Jaitley had chance to leave his name in history. Mr Manmohan Singh presented a budget in 1991. It is still remembered as the budget for liberalisation. Mr Chidambaram presented a budget in 1996. It is still remembered as the ‘Dream Budget.’ Now, Mr Jaitley is helpless because all financial decisions are announced by the Prime Minister. Demonetisation was announced by him, GST by him in a midnight tamasha. As a result of which Mr. Jaitley had a chance in this Budget to keep his name in history. He missed the chance. This is the fifth budget by him. He has lost the chance and the bus has left. It is an untidily, cobbled (document with) many paragraphs, without creating a coherent and consistent whole.
Sir, this is a knee-jerk reaction to Gujarat results. The budget proposals should have been radical and bold and backed by adequate provision of taxes. But they failed.
Sir, main problem in the country is that there is no investment. Other problem is manufacturing has failed to take off as observed in Economic Survey; it is not able to compete with global competitiveness.
Sir, again, this is a very small budget, only 12.9% of the GDP as compared to 13% last year. So with the smaller Budget we can’t have higher growth.
Sir, I will now slowly go to the main claims for the Government. It claims that it has emphasized on the rural and the women and the unemployed. Sir, they are saying that we want ease of living for the people. Sir, let me tell you that ease of living depends on reigning in the recent upsurge of vigilante mayhem, outbreaks of sectarian violence, as in Kasganj, UP and assaults on women as in Haryana. Jab tak Hindustan mein quami ekta nahin ayega, yeh gorakshak daudte rahega, Hindustan ka development nahin hoga.
Sir, just today, I read in the papers, communal incidents in 2017 is highest in 3 years. What is the number? Such incidents rose to 822 in 2017 from 703 in 2016. And number of deaths in 2017 was 111. Sir, jo desh main sampradaik danga fasad mein log marte hain, wahaan koi rupiya invest karega? UP mein Kasangj mein riot hota hai, wahaann koi rupiya invest karega? Hindustan ko shaant karne ka jo zimmedari hain… UP is the largest State in the country, it is the biggest state and it saw 195 riots last year, in which 44 died. This is not the situation for inviting investments. So the Government as a whole has failed to nail communal forces.
Sir, now I will go to some specific figures. Economic situation calls for higher government spending because of low investment and poor demand condition, especially in agriculture and informal sector. Central Government spending has provided falling impetus to real economy, affecting private investment rates, employment and household consumption and growth of real economy. Sir, Central Government expenditure as percentage of GDP is falling every year.
Sir, the Budget has artificially inflated total spending by including amount received as cess for GST compensation to States, which must be kept in non lapsable funding public account.
Sir, capital expenditure is the main thing for building roads, houses, hospitals, permanent structures. Now, capital expenditure is crucial for future growth but it has been falling as a proportion of GDP. Last year, saw a significant shortfall from the budgeted amount.
Sir, devolution to State Governments has not really occurred. The 12th Finance Commission suggested 42% devolution but the Centre has used cesses and other ways of holding on to the revenues to pass on more text revenues. This year they increased the health cess to 4%. Cess means what it will not go to the state. Sir, in petroleum they have transferred 2% from excise duty to cess; this means it will be in the Centre’s pocket, the State will not get. This is not called devolution.
The main thing is agriculture. Total outlay in agriculture will go up by only 12%. No change in share of total expenditure. Sir, procurement prices of 50% over cost. If cost is A2 plus FL, it is still less than what earlier UPA was providing (nearly 70%). If cost is C2, there is no provision in Budget.
Sir, in West Bengal, the State Government is procuring rice on its own and it has got surplus rice. The FCI is writing to West Bengal Government to give them rice, with intention what can be done. There is no provision in food subsidy, an increase in food subsidy has been given but this will be required to pay FCI dues. FCI buys only from Punjab, Haryana and western Uttar Pradesh. Where else in the country does FCI buy? What infrastructure we have? Are there enough roads and warehouses? So this the problem.
Sir, it is a surprise that the Rashtriya Krishi Vikas Yojana only Rs 1150 crore decline in budget. Sir, this is the situation because there is no money nor there is infrastructure to procure crops at one and half times of the cost of production. Sir, the rural development spending to be increased by only 3%, so there is a decline in real term, if we minus inflation. Sir, other claims about rural spending on Budget including loans from banks, they said 14 lakh crore will be spent; Rs 11 lakh crore will come from the banks as agricultural loan. So, the government is providing only about Rs 3 lakh crore which is chicken feed.
Allocation to Pradhan Mantri Awas Yojana is increased by Rs 2000 crore. How will houses be constructed when allocations are decreasing? No increase in Pradhan Mantri Gram Sadak Yojana, only Rs 19,000 crore, so how will rural area progress. Jaitley Ji has given false calculations; he is only spreading propaganda.
Sir, the other thing I want to talk about is the health scheme. They are saying National Health Protection Scheme to cover 10 crore poor and vulnerable families, coverage upto Rs 5 lakh. In Bengal, Mamata Banerjee is implementing Swasthya Sathi, 3 crore people have been covered upto Rs 5 lakh. Now what will happen to this State Government funded scheme? They have not even discussed with the State Government how will be this National Scheme will be implemented. Sir, there is no budgetary allocation for this scheme.
Rashtriya Swasthya Bima Yojana increased by Rs 672 crore, proper scheme will cost at least Rs 60,000 crore so already Rashtriya Swasthya Bima Yojana has totally failed. You said will give one lakh coverage but you are not able to do that. Sir, now what will happen there is an attempt to privatise health care. Without proper regulation and monitoring system will be expensive and less appreciated in public place. Public health spending is falling as a share of GDP.
The last point about women. Why does not the government learn from Bengal? See how Mamata Banerjee gave Kanyashree programme… she started with 31 lakh girls and has now extended it. After 18, if a girl studies in college, she would get Rs 25,000. Beti Bachao Beto Padhao ka to hazar crore expenditure hain? And we are spending Rs 10,000 crore on Kanyashree Prakalpa alone. You’ve not done anything on a big scale,
Now, you are talking a lot about Ujjwala Yojana. You are giving one-time gas connection for free. But with LPG prices skyrocketing, who will pay for the refill? This is a breach of trust. This is a jumla.
There is no mention of the salaries paid to ASHA workers. Anganwadi workers are underpaid. In Bengal, Mamata Banerjee has formed an association of ASHA and Anganwadi workers and we shall agitate for the Central Government to increase their salaries. Nobody does anything.
During Nirbhaya, you and I were in this House when the Bill was passed. Now what has happened? The mission for the Nirbhaya Scheme, the Mission for the Protection and Empowerment of Women, which includes the Nirbhaya Fund, gets only Rs 1,365 crore. For 60 crore women you give only Rs 1,365 crore. Rs 20, Rs 30 per woman. Sabka saath sabka vikas isika matlab hain?
Lastly, I want to say, that the Prime Minister says, we have given to old people. Old people ke liye National Social Assistance Programme is poorly funded, there is very little increase. Only Rs 475 crore – isko kyun nahin badaya? Aap kyun nahin buzurg log ke liye kuch kiya?
The spending on education is falling. The Finance Minister has not acknowledged that Indian universities do not find a place in the first 200 universities of the world. What have you done? You are talking of blackboards to digital books? Now go and see the condition of schools in the rural areas. You’re talking of digitalisation? Someone has told me that in his constituency the internet does not operate in most places. And we are talking of broadband, of digital India? What Digital India? Just let the mobile phone work all over the country. In the interiors of Kanoor or Thanjavur, let the digital work. Then we can say that development has taken place.
One good thing in the budget is that it has given increased allocation for food processing. A demand is that cryptocurrencies like Bitcoin should be banned. You have said that you will keep the blockchain technology. So how to utilise the blockchain technology is to be seen.
I say that this is a very disappointing budget. Mr Jaitley has missed the bus for the next election. 2019 will see another person presenting the Budget.
Thank you, Sir.