December 12, 2019
Manish Gupta speaks on The Appropriation (No. 3) Bill, 2019
FULL TRANSCRIPT
Sir, it gives me real pleasure to stand here and talk about budgets and supplementary budgets, because budgetary allocations, provision of funds, plans, non-plans etc. is equally important for both the Centre and the States. Therefore, both in the spirit of cooperative federalism, both in the sense that the Sarkaria Commission, the Punchhi Commission had recommended, is that, we need to cooperate with each other as far collection of revenue and distribution of revenue is concerned.
Sir, this supplementary demand for grants is looking for an additional gross expenditure of Rs 21,246 crore from the capital and the current account. Sir, fundings have to be through borrowings and increase in revenue. The government has collected only Rs 9.3 lakh crore, which is 45 per cent in April to October, out of the total budget estimate of Rs 20.8 lakh crore, that is for 2019-20. This excludes borrowings, the chances of obtaining which are very slim considering the economic situation. The budget is running a huge deficit of Rs 3 lakh crore as of the end of November. In seven months, the collection revenue should have been above seventy percent. So, it appears that the revenue projections made for the budget were unrealistic. Therefore, this effect is being carried over towards the end of the year.
Sir, let me come to fiscal deficit. This is a much talked-about topic. We should know that the government’s accounting is on a cash basis, whereas in the corporate sector, it’s accounting is on an accrual basis, there is a big difference. So, the projections of the current fiscal, the revenue expenditure has been fused up to show a 3.3 per cent fiscal deficit. Government borrowings have increased alarmingly. In the last year, the collection was Rs 5.7 lakh crore, that was the borrowings; but this year it has already crossed Rs 7.1 lakh crore.
Sir, there are other borrowings, as you know, in the case of FCI. As we all know that FCI borrows from the national small savings funds. This is not shown on the accounts of the government. So when that is not shown on the accounts of the government, that depresses the fiscal deficit and this has been going on for many years. This is also being done in the case of many other organizations like NHAI, PFC, RAC, IRFC and others. So this national savings fund is a fund from which money is withdrawn and not shown in the accounts of the government.
This depresses the fiscal ratio and then a time will come when the government has to pay back this money. When we have to pay back, then the accounting will be difficult. So for the recapitalisation of banks already Rs 1.19 lakh crore have been spent on this and we are yet to see its results because the RBI has stifled its controls on the banks because of previous NPAs, and other difficulties are reluctant to lend. So, in spite of the recapitalisation for increasing the investments is not happening.
Now, 11 million people have lost their jobs in the last 7-8 years. Every year 12 million new people are added to the labour market. This is further aggravating the situation
Sir, the GDP falls, industrial production falls, and industrial production interest on bank deposits falls, savings fall and the economy falters.
Sir, let me come to MGNREGA. It was a popular scheme when it was introduced and this year in the budget I find that Rs 66,000 crore have been put on the outlay. But this sum is inadequate over and above the fact that devolution of funds to the states have been not up to the agreed standard. Actually this needs actually Rs 88,000 crore, so there’s actually a shortfall of Rs 20,000 crore.
Sir, in the supplementary proposals we find that a sum of Rs 8,820 crore has been given to Jammu and Kashmir and Ladakh. It appears that it is only for salaries and pensions. This could have been anticipated in the regular budget and properly budgeted so that it wouldn’t have to be on supplementary grants. Supplementary grants are usually for budgetary outlay for very important projects, which needs to be completed. I find a sum of Rs 20 crore for shrines and temples. Sir, this could have been easily been given from the budget, what is the idea of giving it such a pride of place in the supplementary budget?
Sir, for the Ujjwala scheme, Rs 1000 crore has been increased in the supplementary budget. But in the last four months for four times the government has increased the price of LPG.
Sir, Rs 1,45,000 crore was set aside for sops to corporate. So where is the money going to come from? Because of the low revenue the government is disinvesting frantically. Sir, this is a bad method. Shortage of revenue in the budget is sought to be made-up by disinvesting PSUs means selling the family silver for household goods to recover money.
This brings us to an important public sector, core sector firms like BHEL, Balmer Laurie, NTPC, MTNL, Hindustan Copper Limited. Ordnance factories were thought of to be privatised but that is not happening. But, there is nothing in the supplementary demand to revive the Ordinance Factory, so they can contribute meaningfully to the nation’s efforts in defense.
Sir, the policy being followed is the intervention on their supply side with structural reforms. The need of the hour is for working on the demand side to take the country out of the tailspin that is going in all sections of the economy. So, there is a fund known as National Clean Energy Fund. This is a fund for which revenue is grant from the coal mines at Rs 400 per ton. Now, 80 per cent of the coal mines are in West Bengal. But, there is no outlay from this fund for any new project, power project or, any renewable energy project in this State or, in any other state. This fund is holding Rs 16,000 crore at this point of time.
Sir, food and supplies – I am not going into the figures. There was a cabinet committee on unemployment. Unemployment is a big issue now for my country. What has happened to this cabinet committee on unemployment? If you would enlighten us on this.
The FM has asked for an additional expense on defense… which is 7000 km of a maritime border. We find that the Navy share in the budget is not adequate, always a shortfall. It has dropped from 18 per cent in 2012 to 13 per cent in 2019, which means that out of 200 ships the Navy has to build, it will only able to make 160 or 170. So, that kind of produces a new kind of deficiency in the Navy budget.
A big issue is GST, which my friend had referred to. Sixty per cent of the revenue from GST is for States. They depend for 60 per cent of the revenue on GST and the GST downflow of funds in the States.
Sir, the MSMEs are the backbone of the Indian economy and there is a lack of credit in the disposal to banks. No action has been turned up and no provisions have been made in the Supplementary Demand for Grants.
Regarding Finance Commission, as my friend has talked about it I am not going into the details. But, West Bengal stands to lose Rs 22,000 crore to Rs 45,000 crore because of the finance commission.
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