Wednesday, May 6, 2015

BJP Government’s Budget: a Fraud in the name of Ramrajya

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BJP the Party that promised to bring Ramrajya under the leadership of modern Ram PM Narendra Damodardas Modi has defaulted on their promise. It looks like it was another election rhetoric (Chunavi Jumla in the language of BJP President Shah). The truth is the very first full Budget presented by BJP is an insult to the philosophy of Ramrajya and Hinduism. The non-plan expenditure i.e. just to run the “System” or the government that includes Police, Military, Judiciary, Postal Services, President, Vice President, Prime Minister, Governors, 53 Ministries with numerous departments, 1 Department of Atomic Energy, Commissions, Committtes, 543 MP’s , various government employees etc. is Rs 13,12,200 crore out of the total budget of  Rs 17, 77, 477 crore. On top of that total debt servicing accounts for Rs 6,81,719 crore (debt payment Rs 2,25,574 crore plus interest Rs 4,56,145 crore on outstanding debt). The non-plan expenditure is 74% and debt servicing is 38% of the total budget that leaves Rs 4,65,277 crore that too after taking a new loan of Rs 5,55,649 under the plan expenditure for 120 crore population out of that 88 crore are living in acute poverty. If we calculate against the net revenue of Rs 11,41,575 crore, the cost to run the government is 115% and debt servicing is 60% of the revenue.

FM Jaitley has not shown or has even pretended that he is serious to do some thing about the problem or suggested public or political dialogue on the issue of massive spending on government and high debt servicing that is creating a huge deficit. PM Modi aka Modern Ram the Supreme Leader of BJP must understand that 74% to run the system and 38% in debt servicing of the total budget of Rs 17,77,477 against a new borrowing of Rs 5,55,649 and in real terms 115% to run the system and 60% in debt servicing against a revenue of Rs 11,41575 crore is  not permissible under Ramrajya. Neither it qualifies under good governance i.e. small government and more governance his own slogan that brought him and his party BJP to power in Delhi in 2014. The actions of Modi aka Modern Ram aka Jaitley speaks for itself that “Good Governance” was also an election rhetoric. (Chunavi Jumla in the language of BJP President Shah).

Jaitley could have announced some measures to at least re-structure the 53 Ministries to cut down their massive size, Complete ban on Official Functions in 5 Star Hotels & Resorts, Abolish Pension for MP’s, Ban on allocation of properties for Political Party Offices, end to VVIP & VIP culture of providing security & subsidized housing, pension to MP’s, cap on telephone bills, air travel, foreign trips, rail travel of elected & appointed officials and un-necessary appointment of officials under Ministers and various departments, commissions and committees. Can Jaitley explain how come a law maker is entitled to Pension and princely perks after winning one election only even if he never get elected again; where as a government servant is entitled to a pension only after 20-25 years of service. Jaitley could have proposed a road map to cut down the non-plan expenditure from present 74% to at least 60% in next 4 years.

Some of the budget announcements without any significant Expenditure plans for social schemes like Toilets, Nirbhaya Fund, old age pension, Accidental Life Insurance, education loans, Mudra Bank for small business loans, National skill development, Gramin Kaushal yojna (rural skill development)  etc are a step in the right direction. On education loan one has to pay 12.5% interest they do not have the luxury of paying 0.1% interest reserved for poor corporations like TATA or Ambani’s. National skill and Rural skill development for what? When villages after villages are taken up by industrialist, builders and government and practically every thing of daily use in India is made in China that could have used rural or city youth if make in India. MNREGA with Rs 34,699 crore allocation have been retained after PM Modi made fun of it under arrogance and snobbery in Parliament with no significant increase in its funding even to account for inflation. PM Modi also forgot his own party under PM Bajpai never did any thing to re-structure MNREGA. Then on the other hand expenditure on Sarva Shiksha Abhiyaan has been cut from Rs 28,000 crores to Rs 22,000 crores, the Integrated Child Development Scheme from Rs 16,000 crores to Rs 8,000 crores and the Mid-Day Meal Scheme Rs 13,000 crores to Rs 9,000 crores.  On top of that Scheduled Caste Sub Plan allocation has been cut from Rs 43,208 crore to Rs 30,000 crore and Tribal Sub Plan from Rs 26,714 crore to Rs19,000 crore.

Jaitley has Rs 4,65,277 crore only even after taking Rs 5,55,649 crores in new loans to service his so called growth plans for a population of 120 crore out of that 52% are farmers. He has allocated a princely sum of Rs 25,000 crore in Rural Development Fund for 62 crore farmers. That works out to be Rs 403 per farmer or Rs 2,015 if you take average size of the family 5 members in one year or Rs 167.92 per family per month provided there is no corruption. Out of the 12 crore hectare farming land only 5 crore hectare has irrigation facility rest 7 crore hectare depends on Mother Nature God; if there is timely rain the farmer will have a crop,  if the rain is delayed by a month or no rain whatever input including his labor the farmer has put in will go waste. On irrigation and flood control Jaitley has allocated Rs 5,300 crore that works out to be Rs 757 per hectare per year, provided there is no corruption, It is a shame even after 67 years after independence there is no irrigation facility for the farmer.

The government brags about Rs 70,000 crore subsidy to the farmers where as the fact is it is given to big corporations for the sale of poisonous fertilizer and pesticides to ruin the health of the farmers and consumers as well as to ruin the soil. In 2007 there was 17 crore hectare of farming land vs 12 crore hectare now. The 5 crore hectare land was given to big corporations under Special Economic Zones and other projects. Jaitley has made it very clear that this process will continue and now we have Japanese bullet train project also. It cannot be disputed that infrastructure improvements are vital if growth is to be inclusive. The question is, what types of infrastructure will be developed or investment undertaken, and who will benefit as a result. All indications are Rs 20,000 crore spending on infrastructure will not improve things for ordinary people, but instead may intensify dispossession and displacement as well as theft of resources that has already been occurring in the country under the guise of industrial corridors, Tech Cities, Luxury housing, Office Complex, Malls and SEZs, etc.

To the middle class Jaitley has told them that they are on their own by raising indirect taxes on them while not raising the exemption limit of Rs 2,50,000. This is the same Jaitley as Lok Sabha candidate from Amritsar on April 20, 2014   demanded a raise in the Income Tax ceiling from Rs 2,00,000 to Rs 5,00,000. Advocating low tax structure, he said,"Direct Tax should be reduced. If the Income Tax limit is raised from Rs 2 lakhs to Rs 5 lakhs, 3 crore people will save Rs 24 crore which will lead to a small impact of 1 to 1.5 per cent of National Tax Fund." Now he has raised service tax from 12.36% to 14%, increased the price of petrol by Rs 3.18 and diesel by Rs 3.09 per liter. On top of that increased the basic custom duty on Metallergical coke from 2.5 % to 5%, on iron and steel and articles of iron and steel increased from 10% to 15% and on commercial vehicle increased from 10 % to 40%. Few days before the budget his counterpart Railway Minister Prabhu raised the passenger and freight rates by 14%. Even a high school economics student will tell them that it will bring cost push inflation and affect the very basic commodities and services needed to live by poor as well as middle class.

Now the Corporate sector, the Darling and massive financial donors of BJP: Jaitley in a interview to Head Lines Today said he has given Rs 2,00,000 crore to this sector. They will get Rs 20,000 crore in first year, Rs 40,000 crore in second year, Rs 60,000 crore in third year and Rs 80,000 crore in fourth year. Estimated revenue forgone due to corporate concessions for 2013-2014 is Rs. 76,116 crore or 19% of collected corporate tax revenue. By way of comparison this corporate subsidy is 82% of the food subsidy of Rs 92,318 crore for the same year. Corporations are celebrating the Jailey’s intent to bring down the Corporate Tax from 30 per cent to 25 per cent in the next four years. In USA where the corporate Tax is 35% according to CAG ; US Corporation’s effective rate of tax was 12.1% in 2011 that is 40 years low. On top of that the bigger the US Corporation the less or no tax they pay. U.S. corporations actually pay incredibly low taxes due to the ever-proliferating loopholes, credits, and deductions in the tax code and the use of overseas tax havens. If the effective rate in USA is 12.1% in India it has to be under 10% or in some cases 0 because Indian Corporations are more innovative; they get subsidized loans, land, electricity, break on all kinds of taxes including custom & excise and can book their profits in foreign countries by over invoicing or under invoicing and route it back through Mauritius. Besides plethora of credits and deductions in tax code they buy super luxury cars, luxury homes & farm houses, air planes and yachts in their corporation’s name for their personal, family, executive and for the use of politicians and top bureaucrats.

Laws to curb Black Money is nothing but another rhetoric similar to the one made by Modi during campaigning of bringing back Black Money and after election labeled by BJP Party President as Chunavi Jumla (Election Rhetoric). Unless the route of Mauritius that accounts for 40% FDI to India is closed how one can stop the generation of black money? Arun Jaitley as Union Cabinet Minister of Law, Justice and Company Affairs opened the Mauritius route in 2001 for official money laundering by big corporations. There are unconfirmed reports now as Finance Minister he wants to give same status to Singapore since Ambani's are involved in a scandal for routing their black money via Singapore . People are living in fools paradise if they think Jaitley aka Modi are serious about curbing black money generation or bringing back black money stashed abroad. All the laws to curb black money are for those who do not know or do not have the means to use Mauritius route.

Even after Congress party’s catastrophic defeat in 2014 due to rampant corruption and massive scams the country’s crony capitalists are unlikely to suffer as a result. The nexus between business and politics is as tight as it has ever been. BJP spent Rs 32,000 crore to bring Narendra Modi to power with massive corporate donations. BJP is estimated to have spent at least Rs 6,200 crore on print and broadcast advertising alone. Of these donations, around 90% comes from unlisted corporate sources who will be rewarded when the times comes. Reliance is now India ’s biggest media company, as well as its biggest conglomerate. Reliance, Adani, Tata, Jindal, Ruia’s etc has unprecedented political access and power. All these corporations unlike East India Company do not have their private army but soon will be making all kinds of war heads, missiles, helicopters, air planes, ammunition and other sophisticated military gadgets because Jaitley has increased the FDI limit to 49% from 26% for this Industry. Just few days before the budget Middleman/Lobbyist has been legalized in India for deals with the government including defense deals. Now there won’t be any shortage of Radia’s openly operating in the corridors of power to influence law makers for favors for their corporate clients.

No where in his budget Jaitley has acknowledged rising economic inequality and shown any intentions to come up with a plan to stop it. It looks like for FM Jaitley who’s net worth is more than Rs 1000 crore, 88 crore poor especially agricultural labor, casual Labor, self employed the name sake business owners, unemployed youth, schedule castes, schedule tribes and minorities are invisible. Because they are not organized like big corporations with lobbyist that can plead their case to the law makers. They do not have means to have a voice to make complaints or demand social justice because the Forth Pillar of Democracy “The Media” is also owned by Industrial houses and in some cases the law makers themselves through their spouses or relatives. Above all they are the slaves of an elite class behaving like British Rulers of the past.

PM Modi aka modern Ram of BJP has said that this budget is Progressive, Positive, Practical, Pragmetic, Prudent, Pro Poor and Pro Growth. Can PM Modi explains on what page or paragraph the rising economic inequalities has been addressed by this budget? On what page or paragraph high cost of governance, British style perks for Politicians, nexus between politicians and corporations, undue economic favors to corporations etc has been addressed? It looks like Modi and BJP that worship Shahid Bhagat Singh has no respect for his ideals. Bhagat Singh said, "There can be no equality, not even in politics and before the law, so long as there is glaring inequality in economic power."

Devendra Makkar
davemakkar@yahoo.com

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