After successfully forcing rollback of the rail fare hike announced in the Railway budget by its own member (then Railway Minister) Dinesh Trivedi, the Trinamool Congress, an important constituent of the United Progressive Alliance government, on Thursday hit out at the budget 2012-13, terming it “regressive.” Participating in the debate on the Union budget in the Lok Sabha, Trinamool member from Hooghly Ratna De said unlike previous budgets presented by Mr. Mukherejee, this year's budget had an over-riding objective of fiscal consolidation. “In an attempt to achieve that, the Minister compromised on both growth as well as inclusiveness. The budget is anything but inclusive. This is highly inflationary and regressive. It hits the poor the most”.
A huge increase in indirect taxes to the tune of Rs. 45,000 crore together with fare hike in railway across the board makes the budget inflationary and regressive. “In such a precarious situation and income tax relief to the upper middle class and the rich defies all the principles of inclusiveness and increases the mediocrity.”
Whether all these measures would really, at the cost of inclusiveness, help the fiscal consolidation? “As my understanding goes, it would not.” This was because the assumption on the basis of which Mr. Mukherjee promised to bring down fiscal deficit to 5.1 per cent of the GDP would not hold good. The targeted deduction in subsidy on food, fuel and petroleum to two per cent of GDP was unconvincing. Moreover, the targeted reduction in fuel subsidies was unlikely to be achieved, more so in the face of the Middle-East crisis.
Growth of unemployment and high inflation was eating up the purchasing power of people, she said.
The member, a doctor-politician, also criticised the government for bringing down the interest rate payable to the PF subscribers for 2011-12 to 8.25 per cent (from 9.50 per cent for 2010-11).
Throughout her speech there was not a single word of appreciation of the budget proposals and instead she sought a financial package for West Bengal, ruled by her party president Mamata Banerjee. Ms. De also wanted moratorium on repayment of loan by the State government as it was facing a huge burden of paying interests and repayment of loan costing as high as Rs.21,000 crore every year.
It was mentioned that once the Food Security Bill was approved by the Parliament, funds required for that would be fully provided for. But Mr. Mukherjee did not mention the sources which would provide for such a huge sum. Resource mobilisation through non-tax revenue like divestment and spectrum allocation had been pegged at Rs. 30,000 crore and Rs. 40,000 crore respectively. Both seem to be over-estimation, given the present business scenario in the country. All these considerations combined together indicate that plans for fiscal consolidation were unlikely to work, she said even as Mr.. Mukherjee was keenly listening.
Earlier, initiating the debate former Finance Minister Jaswant Singh (BJP) said the UPA-2 regime had come to a standstill due to the “perpetual crisis” and weak political leadership. The government seemed to be an “illusion” as no decision had been taken in view of so many scams rolling out in public one after the other.
Mr. Singh targeted the Manmohan Singh regime for price rise, fiscal deficit, black money and lack of investment in the country. The civil servants were unwilling to take any decision as they did not want to commit any mistake, he alleged and said: “This indicates weak political leadership of the country."
Taking a dig at the UPA vis-à-vis TMC's demand on rolling back rail fare hike, Mr. Singh said it had been “condemned to perpetual crisis.” He sarcastically added: “If you succeed, it is good. We want you to succeed. But your government does not want to succeed.”
P. Karunakaran (CPI-M) regretted that as a result of the policies of the government, the rich were becoming richer and poor getting poorer.
Brijbhushan Sharan Singh (SP) said the budget had ignored the poor. “It is not good for common man,” he said.
Opposing the proposals to bring down subsidies for fuel and fertilisers, M. Thambidurai (AIADMK) said it was against the interest of common man and “subsidy is very important” in the time of financial crisis. It would be difficult for the States to take up pro-people measures, if the Centre brought down subsidy on essential commodities, he said.
