March 14, 2013
Saugata Roy speaks on Union Budget 2013-2014
Excerpts of Trinamool MP Saugata Roy’s speech
Sir, I would not repeat what my colleague, Shri Kalyan Banerjee said yesterday. Like him, I reiterate the demand for a moratorium on interest payments on the debts by West Bengal and a debt restructuring of all the debt-stress States like West Bengal, Karala and Punjab. Let me also state that I am against the devolution of money to the States which has been pegged at 28 per cent whereas the Finance Commission had recommended 32 per cent. This should be raised. I also want to state earnestly that we shall oppose the insurance and pension reforms Bill which allows foreign funds to be invested in this industry. Having said that, as I have very little time I will not go into the sectoral demands rather I will take the big picture as to what is the condition of the economy now.
The economy is in a bad state; growth has halved; food inflation is rampant and savings have fallen sharply as have investments – domestic, private, public and foreign. The current account deficit is at a record high. The infrastructure is in shambles. The big infrastructure companies like GVK, GMR L&T and LANCO have total debts of more than Rs.1 lakh crore. Environment and forest clearances are holding up huge projects under BOT.
Sir, in this condition Mr. Chidambaram has given his Budget but let me say that this Budget does not help to stimulate growth in agriculture, industry and infrastructure. There are no credible measures to curb inflation. Savings and investment have only received a nudge and not a big push. No effort has been made to make MNREGA and NRHM more effective – cost-wise and implementation-wise.
Sir, one famous economist S.L. Rao has commented that this Budget does not display Mr. Chidambaram’s trademark aggression and imagination. It is unlikely to stimulate growth, moderate inflation and restore India’s balance of payment. The unfortunate thing in this whole Budget exercise is that there has been a snipe by the present Budget at the previous Finance Minister. If you read the Economic Survey, it puts the blame of the bad state of growth on the previous Finance Minister. What does the Economic Survey said? It says:
“The strong post-financial crisis stimulus led to stronger growth in
2009-10 and 2010-11. However, the boost to consumption coupled
with supply side constraints led to higher inflation. Monetary policy
was tightened. The consequent slow down in 2012-13 has been
across the board.”
Who was in Government then when the stimulus was given? The same Manmohan Singh Government was there. Shri Pranab Mukherjee was there as Finance Minister and he is blaming him for increase in inflation and for fall in growth. Food inflation continues to be higher than the overall inflation. This is the snipe. Mr. Kalyan Banerjee also mentioned this yesterday. Chidambaram’s Budget Speech mentions last year’s plan target as ambitious and expenditure target and non-plan target as conservative. Now this is not done in the same and continuing Government. How can he do that? But it has been done. Now let me deal with the issue theoretically. There are two lines of thought in Budget preparation. One is the Keynesian line of Cambridge John Maynard Keynes. He proposed a fiscal policy. He felt that the Government should raise taxes and spend it in various sectors, thus, stimulating growth. The other policy which was started by Adam Smith followed up to Friedman and maybe it is also followed by Mr. Chidambaram is the monetary policy. They do not believe in Government intervention. They feel that the Central Bank independent of the Government should increase or decrease interest rates, thus bringing more money into the market and let the private sector lead the recovery and economic growth. Mr. Chidambaram has followed the monetary line and what has he done? He has been desperate to reduce fiscal deficit as if this is his mool mantra. This is the be all and end all and in the process what has happened is that he has got locked in a stalemate with the Reserve Bank. The Reserve Bank, in spite of his prodding, is refusing to cut interest rate to bring more money into the market. Secondly, in the name of curbing expenditure, he has chopped plan expenditure. Now how does a poor country advance by investing more in the plans? Last year, the Finance Minister had cut Rs.1 lakh crore in plan expenditure.
The hon. Finance Minister has reduced total expenditure by Rs. 60,000 crore. He is claiming that he had reduced fiscal deficit. Now, is reduction in fiscal deficit meant to satisfy the Moody’s and Standard and Poors so that they give him a better rating? This is a question which Shri Chidambaram has to answer.
The hon. Finance Minister has reduced subsidy this year as also in the last year. He has reduced total subsidies from Rs. 2.48 lakh crore to Rs. 2.20 lakh crore? Who will this affect? In oil, subsidy is reduced which means that diesel and LPG prices will be increased and will affect the aam admi. In fertilizer subsidy has been reduced which means that it will hit the kisan. Now, the Government on the one hand is talking about introducing the Food Subsidy Bill and subsidy given is Rs. 90,000 crore. But all estimates say that if the Food Subsidy Bill comes into effect, then at least a sum of Rs. 1,20,000 crore would be necessary. Now, who is Shri Chidambaram trying to please? Is it his own party, or his fiscal deficit control instinct? It is not clear from the Budget. That is why I am disappointed. I do not agree with his views. But he is always known as a very efficient Minister who has a monetary view, a pro-market view, who dreams of new Budget. This Budget is just a tinkering with our economic policies without any concrete direction as a whole.
Sir, I would like to submit that this Budget following the monetary policy has cut down severely on the social sector. Shri Pallam Raju has said that allocation in education is up by 17 per cent. The HRD Minister says it is too little. In the health sector, I support the introduction of cities in the National Health Mission. Allocation in health is up by 27 per cent. The hon. Prime Minister’s cardiologist, one of the noted health scholars in the country, Shri K. Srinath Reddy said that it is disappointing and too less. In Defence sector, the hon. Finance Minister as compared to 17 per cent increase in allocation last year, this year he has given 5.3 per cent in Defence. We all know what happened in Kashmir yesterday and what happened in the LoC where the head of one of our jawans was cut off. The hon. Finance Minister has reduced the allocation in Defence. He is trying to raise finances from disinvestment. He has set a target of almost Rs. 56,000 crore. We are generally against this rampant disinvestment of public sector enterprises… (Interruptions) Disinvestment will weaken the public sector and put them in the hands of dishonest people. I know, in my parliamentary constituency, there is a company called M/s Jessop which was disinvested and today the private entrepreneur is not running it properly and it is lying almost idle. This should not happen.
Sir, the main thing is that the hon. Finance Minister has not talked about black money at all. The former Finance Minister, Shri Pranab Mukherjee gave a White Paper on black money. Though the Paper was not good and Shri Jaswant Singh called it a bikini because it concealed the essentials and revealed the nonessentials, yet he spoke about black money. But Shri Chidambaram has refrained from talking about black money. Yesterday I read a book on black money by one Shri Brij Bhardwaj. It says that the estimate of black money in India is to the tune to Rs. One trillion. Now, what is the Finance Minister doing to flush out this black money, part of which is parked abroad and comes to India only at the time of elections? We had Adjournment Motions in this House on black money. Shri Chidambaram for some reason has decided to keep quiet on this issue. I thought he would he would go after black money in a big way in an election year. No such thing has happened. The real estate market, large scale counterfeiting operations, smuggling and corruption all help in creation of black money. The mafia operations and crimes indicate that a large part of our economy is outside the tax net. Unless we tackle black money and bring back Indian money stacked abroad and break the nexus of black money between the real estate operators and politicians, this country will not be able to make progress.
As I said, even today, I saw a programme on a television channel. They are saying “Money laundering scam by major private sector banks”. What is this? What action will be taken against those banks? He is opening the doors of banks to foreign companies. What will happen to our country? Sir, please think about this. Shri Chidambaram has reduced subsidies and at the end, he has quoted Thiruvalluvar which he always does. Let me quote a Bengali poet, Shri Sukanto Bhattacharya. He says:
“Khudar Jagate Prithvi Gaddomoy
Purnimar Chand Jeno Jhalsano Ruti”
It means in the world of hunger, the world is prosaic. There is no poetry. The full moon looks like a burnt roti. Sir, this Government in the last few years, has given 3.48 lakhs exemptions to corporates in the hope that they will invest. He has not done away with exemptions. What does it mean? You are pampering the rich and extorting the poor. Please remember this point. This question was asked by this young poet, Shri Sukanto Bhattacharya.
“Bolte Paro Bado Manush
Motor Keno Charo, Ar Gorib
Keno Sei Motorer Tolai Chapa Porbe. ”
Why do the rich drive in cars and why are the poor crushed under? So, Shri Chidambaram, I say that still there is time. There should be no tinkering. You take ten per cent surcharge from the rich … (Interruptions) He says that 42,000 people are there who pay more than Rs. 1 crore as taxes. There are more people in South Delhi who have more than Rs. 1 crore as income. You are not trying to bring them into the tax net. Lastly, let me say that he has quoted the Nobel laureate, Stiglitz. In 2002, Stiglitz wrote a book – Globalisation and its Discontents – where he has said:
“The West has seriously mismanaged the process of privatization,
liberalization and stabilization and that is why the poor are worse off
than they were before globalization.”
In 2006, Stiglitz wrote another book, Making Globalisation Work. I hope that Mr. Chidambaram has read that book also and find a way to make globalization work and not subject our economy to the vagaries of our markets in the West. That is not the way. I will not speak on any sectoral demands. I am only asking to give some special package for the jute industry which Shri Rajiv Gandhi has given. There is no mention of jute industry at all. 1603 hours (Shri Francisco Cosme Sardinha in the Chair) lastly, when Pandit Jawaharlal Nehru died, a poem by Robert Frost was found at his bed side. It said:
“The woods are lovely, dark and deep
But I have promises to keep
And miles to go before I sleep.
And miles to go before I sleep.
My little horse must think it queer
To stop without a farmhouse near
Between the woods and a frozen lake
The darkest evening of the year.
The woods are lovely, dark and deep,
But I have promises to keep
And miles to go before I sleep
And miles to go before I sleep. ”
Shri Chidambaram, do not go to sleep. You have miles to go before you make this economy recover.