The Union budget is “regressive,” will push up prices, impose heavier burdens on workers and is biased towards the corporate and the rich, the Communist Party of India (Marxist) has said.
In a statement here on Friday, the party's Polit Bureau said it welcomed taxes imposed on luxury items but opposed the government's reliance on indirect taxes for mobilising revenue, as the measure would push up prices across the board.
Opposing the cut in fuel subsidies by Rs. 25,000 crore, the party said this proposal would inevitably lead to further increases in fuel prices. The cut in fertilizer subsidies by Rs. 6,000 crore would push fertilizer prices up, affecting farmers.
Pointing to Rs.5.3 lakh crore in revenue foregone during 2011-2012, the party said this huge sum included Rs.50,000 crore of tax concessions given to corporates. There was a shortfall of Rs. 30,000 crore in gross tax revenue, mainly because of slack collection from the corporates.
No move to curb speculation
The party said the budget came out with a slew of concessions for investments in stock markets. At a time when governments worldwide were trying to control stock market volatility through a tax regime to curb speculation, the budget proposed cutting the security transactions tax by 25 per cent and planned a new tax exemption for encouraging retail stock market investors. And this came about at a time when the EPF interest rate was lowered from 9.5 per cent to 8.25 per cent. Furthermore, the government once again ignored the need for a capital gains tax to prevent speculation.
Shortfall in allocations
As for the people, the government's claims of added allocations rung hollow because of the shortfall in actual expenditure. Crucial programmes like the Mahatma Gandhi National Rural Employment Guarantee Scheme had suffered from a huge shortfall of more than Rs. 9,000 crore last year. The gender budget also saw a shortfall of Rs.1,200 crore.
Given the inflation factor, the allocations for most programmes were in any case inadequate. For example, the allocations for the Scheduled Caste Sub-Component Plan and the Scheduled Tribe Sub-Plan, though increased, were still far below the required 16.5 per cent and 8.2 per cent of the Plan expenditure; in fact, it was even lower last year.