wealth tax

Budget 2022: Bad economics, bad politics

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The budget for 2022-23 is a reiteration of the government’s tilt towards corporates and big business houses. It gives a heavy impetus to the private sector and neglects the public and social sectors.

The state of agriculture is worsening with the Gross Value Added by it in 2021-22 coming down to 18.8 per cent from 20.2 per cent in 2020-21. For the smooth functioning of the rural economy and to ensure food security, it is necessary to invest in agriculture. However, no measure has been announced to deal with the agrarian crisis. The allocation for agriculture has come down to Rs 3,70,303 crore from Rs 4,74,750.47 crore (revised estimate of 2021-22). The amount reserved for the procurement of paddy and wheat has come down by more than Rs 10,000 crore compared to the previous year. The demands of the farmers’ movement have not been fulfilled and the finance minister said nothing about a legal guarantee to MSP. The share of rural development has gone down to 5.23 per cent from 5.59 per cent in the budget.

MGNREGS shielded millions from destitution during the pandemic with the demand for work peaking in June 2021 at 4.59 crore persons. The situation has improved somewhat since then, but the unemployment figures are still staggering. Cutting the MGNREGS allocation is, therefore, not just bad economics, it’s bad politics as well.

The recent Oxfam International report on inequality has red-flagged the widening gulf between the rich and the poor in the country. It noted that, “the number of Indian billionaires grew from 102 in 2020 to 142 in 2021, the worst year yet for India during the pandemic”. The report proposed some tweaks to India’s taxation policies to correct the situation. “A 4 per cent wealth tax on the 98 richest families in India can take care of the Ministry of Health and Family Welfare for more than two years, the mid-day meal programme of the country for 17 years or the Samagra Siksha Abhiyan for six years,” it pointed out. Unfortunately, the government is so cautious of not hurting rich capitalists the slightest that these measures cannot be taken up, let alone far-reaching redistribution of wealth.

India’s public health infrastructure imploded during the pandemic and exposed the pitfalls of excessive reliance on private healthcare services. But the government refuses to learn the lessons. Last year, health was dubbed as one of the six pillars of the budget. But this year, the overall budget of the Health and Family Welfare has increased by a mere 0.96 per cent and the research budget by 3.9 per cent. The budget for Covid vaccination has been cut down by 87 per cent, indicating the government’s belief that we are out of the pandemic — that is far from the truth.

The country has fallen on all social indices, including hunger and nutrition, in the past eight years. Instead of tackling this, the allotment for mid-day meals in schools has seen a dip of 11 per cent. This cut is striking given the Annual Status of Education Report’s (ASER) finding that children of age 6-14 years currently not enrolled in any school has increased from 2.5 per cent in 2018 to 4.6 per cent in 2021. The worst affected by the pandemic were casual and agricultural laborers — predominantly Dalits and members of other marginalised communities. They received no relief in this budget.

The government intends to invite foreign universities to open campuses in the country. The fee structure of these universities will most likely benefit the affluent and further hurt Dalits and other marginalised communities. There is no increase in allocations for the marginalised communities. The Ministries of Social Justice and Empowerment, Women and Child Development and Minority Affairs will have to make do with meagre allocations.

While the country is reeling under poverty, inequality, unemployment and disease, the government wants us to believe that “capex” is going to bring growth. The higher capex amount is largely due to paying the Air India debt and defence expenditures. The Air India case is a classic example of “nationalised losses and privatised profits”. The Modi government has failed in creating the promised two crore jobs, but the FM has promised another 60 lakh jobs. The government has betrayed all sections of society.

The writer is general secretary, CPI



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