Shashi Tharoor: Disappointing Budget, The Indian economy is a slow moving, fettered elephant
Full text of Dr Shashi Tharoor’s reply to the Budget 2019-20
Thank you, Respected Chairman, for giving me the opportunity to present my Party’s views on the Budget 2019-20 that was presented by the Hon’ble Finance Minister, Smt. Nirmala Sitharaman, on July 5, 2019.
I would like to begin by congratulating the Honourable Finance Minister for her maiden Budget and the first of this new government in their second innings. It is indeed a matter of pride for all of us in this august House and the country, that this was the second ever Budget that was delivered by a woman, since Smt. Indira Gandhi presented the Budget in 1970—and on behalf of my party, I would like to extend my deepest appreciation for the Hon’ble Finance Minister for recreating history. It is a traditional practice for the Opposition to hold the government accountable for its performance, including the announcement of the Budget, but before I do so on behalf of my party, I would also like to place on record my personal admiration for the Hon’ble Finance Minister, whom I have known for many years.
It was a marvellous touch to bring a dose of Tamil Sangam poetry into this House, with her verse about the elephant and the paddy field. But I cannot resist pointing out that her metaphor accurately makes her Government a slow-moving elephant again, whereas what we were all hoping for is a bounding, lithe and agile tiger. Sadly, this Budget, with its creeping incrementalism devoid of any bold proposal, falls considerably short of unleashing the animal spirits that John Maynard Keynes spoke about; the poor animal of the Indian economy, this lumbering and limping elephant, still remains leashed and fettered as it has been for the last five years.
This is why one cannot blame her entirely for the abject disappointment that has once again been caused by an underwhelming Budget from the current government. She has, after all, had to inherit the mess that the government has spent 5years in power creating: the legacy of economic mismanagement that has featured a disastrous demonetization, unemployment at a 45-year high, agrarian distress that has raised farmer suicides to record levels, declining rates of savings and investment, and widespread stagnation in every area from manufacturing to exports.
It is with deepest regret that I note that the Budget that was presented last week to this House, was characterized by a remarkably mediocre set of announcements, distinctive misses, deafening silences on matters of substance and utterly evident insincerity of this government to truly offer a way forward to the people of our country from the series of crises they have been afflicted with since the first innings of this government in 2014. Since cricket is on our minds with the World Cup semi-final tomorrow, let me say that instead of the bold boundaries we expected in this first Budget after the elections, what we have is unnecessarily defensive strokes, dropped catches and quite a few no-balls and wides.
Moreover, the Budget reflects yet another complete disregard for the genuine concerns, hopes and aspirations of our people, many of whom came together to offer a fresh mandate for this government. It must be said that it is not we in the Opposition that the government has failed by offering these terms of disappointment; rather it is the mandate of the people of India that the government has chosen to squander at the beginning of its tenure.
As Mirza Ghalib has observed:
“BujhJaate Hai Diye, Kabhi Tel Ki Kami Se Bhi
This is what has happened to our country. Kusoorkisiaurka nahin, aapki Sarkar ketelki kami hain.
There were some remarkable aspects to this Budget but these, Mr. Chairman, came from what was not said in the Budget speech rather than what was. This was perhaps the first Budget in the history of the country, and the longest if I am not mistaken, where allocations, the engine of the document, were not mentioned. For over 2 hours, we waited for announcements of substance but had to make do with an hour-long recitation of the so-called achievements of the first term and grandiose promises of fluff for the coming decade, when the people of India wanted concrete answers to their problems of today.
Ultimately, it must be said that we were left with a sort of Trishanku budget that was neither here nor there, and at its heart, mediocre incrementalism wedded to some lofty ideals for a grand future. But sadly, there was little elucidation of a comprehensive and robust strategy or roadmap to get there and from the aam aadmi’s perspective, just a series of missed opportunities and uninspired reiterations of existing ideas.
To start with, the macroeconomic situation of our country’s economy was not considered worth a mention in the Budget speech. I can’t blame them. The mess they have made does not make for a pretty picture worth mentioning, after all. There was strikingly no mention of the country’s GDP growth rate (in fact the word ‘GDP’ was only mentioned once—with regard to external debt-to-GDP ratio)and the principal contributors to the GDP—investment levels, manufacturing, consumption—and even the government’s dubious fiscal deficit target was mentioned, rather amusingly, after the official speech concluded, as if it were an afterthought. But since the government has intentionally failed to provide a full picture for us, let me begin by doing their job for them.
Respected Chairman, The Economic Survey 2019-20, that was presented last week on Thursday, makes a rather optimistic projection of 7 per cent GDP growth in the upcoming fiscal. In fact it goes on to mention that during the last quarter of the fiscal year, the growth rate will even pick up to 7.5-7.6 percent. It even adds that this acceleration will, in time, be a step toward hitting a growth rate of 8 per cent which will be integral to achieving the Prime Minister’s lofty target of a $ 5 trillion economy by the year 2024-25. Now I don’t know where they are getting these figures from but I must say there is a characteristic credibility issue with the rosy picture they are painting for the country.
As the Government’s own former Chief Economic Advisor has pointed out, our current growth rate could, in reality, be as much as 2.5 points lower than what is being projected. The government had offered to present a point-by-point rebuttal to the methodology used by Dr. Subramanian to arrive at this conclusion, but that has still not come through. Similarly, we all remember the GDP back series row that kicked up last year when the Niti Aayog brought in yet another method to calculate GDP in a manner that boosted the growth on paper for the NDA government while bringing it down for the UPA years, a move that invited widespread condemnation from experts around the world. The recurring high-profile departure of experts from this administration (the latest being the deputy governor of the RBI) also does not inspire confidence in the credibility of the numbers offered by this government.
Traditional economic wisdom dictates that the GDP of the country will only grow if the key contributors to it expand—such as investment, manufacturing, consumption and exports. But here we have a peculiar situation where none of these are growing, and have in fact hit rock bottom, but the government still believes it can sell the idea of a 7-8 per cent growth rate in the future without offering a roadmap on how exactly this will happen. Let us not forget that the GDP growth rate in the most recent quarter is considerably lower than such fevered fantasies, at a tepid 5.8 per cent.
The Finance Minister at the onset of her speech echoed the Economic Survey by emphasising the central role of investment to propel the economy, pointing out that that we need to ‘invest heavily in infrastructure, in digital economy and on job creation in small and medium firms’. She is, of course, right in this regard but completely failed to take cognizance of the fact that according to the Centre for Monitoring the Indian Economy (CMIE), which tracked project announcements and implementation in the June quarter, investment (both private and public) has shockingly gone down by 81 per cent from the previous quarter and, worse, 87 per cent lower than the same quarter last year.
This reflects an alarming decline inboth public and private investment and an overall 15-year low. Our manufacturing and services sectors have been particularly hit, with the former falling by 68 per cent from the previous year and the latter by 98% from the previous year. And this horror story only gets worse. So where does the Government’s optimism about investment come from?
Projects to the tune of nearly 13 trillion rupees are currently stalled with the stalling rate (based on the percentage of projects under implementation) in the private sector touching a record high of 26.1 per cent in the June quarter. 27.2 per cent of projects in manufacturing are stalled, 20.4 per cent of power projects, and together with the services sector account for 92 per cent of the total stalled projects. Ask any industrialist what it will take for him to invest in the present Indian economy, and he will tell you: Improve consumption, so that people will buy what we make.
But consumption levels also tell a similar tale. According to the Society of Indian Automobile Manufacturers (SIAM), automobile sales fell by 20.6 per cent in May 2019, the steepest decline in 18 years, which in turn has arrested manufacturing and demanded inventory correction, causing total production in this segment to fall by 8 per cent. Two-wheeler sales fell by 17.3 per cent in FY19 and even traditionally strong movers of consumption, like Fast Moving Consumer Goods (FMCGs), are likely to fall by an overall 2 per cent according to a report published by the market analytics and information firm, Nielsen.
The slowdown in consumption (which was alluded to in the Economic Survey but strangely skipped in the Budget) has also affected India’s prime services sector, with the Nikkei India Services Business Activity Index (or PMI) falling to a 49.6 in the June quarter (the lowest this year) from the 50.2 in registered in May. This is also worrying, given that while a figure above 50 indicates expansion, a reading below signals a contraction and in this case, the first contraction since May 2018.
The decline in all of these key indicators makes it clear that there is an acute trust deficit among investors, coupled with low consumer confidence in the economy, for which this government in the Budget has neither addressed nor provided a roadmap on how it will turn around this situation. The hasty and ill-thought through demonetisation bears a large share of the responsibility for shutting down lakhs of small and micro enterprises and throwing many more lakhs of people out of work. As a well-known couplet tells us:
“ye jabrbhidekhahaitari Khkinazron ne
ye jabrbhidekhahaitari Khkinazron ne
lamhon ne Khatakithi, sadiyon ne sazapayi.”
We also have to consider new research that has been published recently by researchers from Harvard’s Centre for International Development (CID), which has predicted that based on its Economic Complexity Index for 133 countries (a measure of the diversity and sophistication of the productive capabilities embedded in the exports of a country) India will only manage an average annual growth of 5.5 per cent till 2027, whereas China will continue to remain as one of the fastest growing economies with an average growth rate of 6.1 per cent.
As for the fiscal deficit target, the announcement that the government will stick to 3.3 per cent hardly inspires any confidence. For one, this is a reiteration of commitments it has made in previous years but failed to meet. We all recall how my good friend Arun Jaitley kept having to adjust his fiscal deficit target every year. For another, this was made on the assumption of a growth in tax revenue to offset increased government spending on schemes like Ayushman Bharat and the expanded version of PM-Kisan which has been allocated Rs 75,000 crores. But as theEconomic Survey itself highlights, while direct tax improved by 13.4 per cent, the gross tax to GDP ratio in FY19 fell to 10.9 per cent (a decrease of 0.3 per cent), as indirect taxes fell short by 16 per cent due to shortcomings in GST(which by the admission of the government’s own economic advisors requires a ‘mop-up’). In the present scenario, how the government will finance this deficit remains to be seen and the target is questionable at best.
One solution, the government will point out, will come from non-tax receipts, namely the self-declared disinvestment target of INR 1 trillion. But we all know how theGovernment has so far played the disinvestment game, by getting one public sector company to buy shares in another, which is not disinvestment at all but fudging the books. Now the Govt is hoping for a lakh crores by selling loss-making Air India—but when the far more successful Jet Airways has failed to find a buyer, who will bid for Air India?
Similarly, I would also like to draw the attention of the House to this government’s continued failure to provide relief or even a roadmap to the country on direct taxation. It was my esteemed colleague, Mr P Chidambaram, who in 2009 had proposed a direct tax code to replace the complex and outdated Income Tax Act, 1961, so as to bring India’s tax ecosystem in line with the demands of a fast growing economy. However, despite having constituted a task force to propose draft legislation on direct taxation, this government has failed to provide a tangible rollout plan for this much need tax reform. Indeed, the task force’s deadline has repeatedly been extended, with the last such extension to July 31 taking the overall delay to over a year.
The government sought to provide short-term sops to the aam aadmi, providing an additional income tax deduction ofRs 1.5 lakhs on affordable home loans. However, given thehigher excise duty on essential items for the home like ceramic tiles, marble flooring, electronics and mountings for furniture, which are imported mainly from China because they are cheaper, the savings may well be more than offset by higher costs for all these.
Similarly there is a deduction of Rs. 1.5 lakhs on loans towards the purchase of electric vehicles. But given thecomplete lack of public infrastructure (and government investment) to support electric vehicles, repeated power failures in every part of the country, and the absence of a grid or cabling to support the much higher power load required to charge electric cars, these additional deductions are meaningless.
Meanwhile, whenthe aam aadmi is already paying the highest fuel prices in the world because of this Government’s taxes on petrol and diesel at a time when the prices for fuel are dropping worldwide, adding an extra two rupees pluson every litre of petrol or diesel at a time of international low prices of crude oil, adds insult to injury. This is a continuation of the BJP government’s established practice of dangling a carrot before the citizen and while he is not looking, distracted by all this hoopla, pulling whatever cash he has on him out of his pocket.
While the Hon’ble Finance Minister did quote ancient poetry to thank the tax payer, allow me to offer a more recent poem (which I modified from one that’s currently in circulation) that rather aptly captures the present situation:
Tax his car, tax his wage,
Tax his book on every page.
Tax his fuel, his credit card,
If he screams, tax him hard.
Tax his newsprint, tax his drink,
Tax him if he tries to think.
Tax his bosses, tax his peers,
If he cries, tax his tears.
Tax his pay, tax his phone,
Tax his house, tax his loan.
If he thinks this is a sin,
Tell him it’s his achhe din!
Another big announcement by this government, met by plenty of table thumping by my esteemed colleagues on the other side of the well, was the extension of the 25 per cent corporate tax rate to companies under a 400-crore rupee turnover. However, in keeping with this government’s underhand tactics, even this headline-grabbing figure was meant to obscure the reality. Not only has the government failed to live up to its own promise of a universal corporate tax rate at 25 per cent by FY20, as announced in the FY16 budget by the then Finance Minister, Mr Jaitley, but it has also failed to phase out tax anomalies that often lead to litigation.
As numerous analysts have repeatedly pointed out, India remains one of the least competitive economies, amongst our competitor nations, for large domestic or foreign companies, with the total effective tax rate paid by some corporates reaching an astronomical 48 per cent, whereas organisations like CII have been calling for you to reduce corporate tax to 18 per cent. In comparison, Chinese companies enjoy a flat corporate tax rate of 25 per cent, with this dropping to 10 per cent for certain small scale or other encouraged businesses. By not sticking to its own promise, the government has once again failed corporate India and missed out on a significant opportunity to actually encourage increased private investment in our economy.
Respected Speaker, While the macroeconomic picture of the country’s economy was treated by the government as a fly in the ointment, the Finance Minister did spend a considerable time building castles in the sand, particularly with her lofty ‘Vision for the Decade’,which includes the PM’s drive to create a$ 5 trillion economy by 2024-25,which would supposedly cater to the ‘aasha, vishwas and aakansha’of the people.
But ask these same people and they will tell you that it means little for them. Because it has nothing to do with what will actually cater to their ‘aasha, vishwas and aakanksha’, which would be the GDP per capita in rupee terms, which goes directly into their pockets and matters to them.
For instance, according to the most recent World Bank classification this month of countries by Gross National Income (GNI) per capita, India continues to be a lower-middle-income country along with 46 others, while even little Sri Lanka has climbed to the upper-middle-income group for the fiscal year (FY) 2020. What the government plans to do to increase the GNI of its citizens to even the Sri Lankan level was strangely absent. Clearly, this imagination of an expanded dollar footprint of the country’s economy represents only the ‘aasha, vishwas and aakansha’ of the ‘suit boot ka sarkar’ than of the aam aadmi.
Mr. Chairman, Allow me to try and piece together what this Budget then left for the aam aadmi. In her address, the Hon’ble Finance Minister memorably invoked the Father of our Nation, quoting the Mahatma’s immortal vision that ‘The soul of India lies in its villages’ and went on to emphasis this government’s apparent commitment to ‘gaon, garibaurkisan’. But for each of these categories—rural India, the economically and financially challenged in our society, and those who put food on our table—there was sadly very little for them to write home about. Take our nation’s kisans, those who provide the ‘food security’ that the Finance Minister was so proud about. To these men and women, these last 5 years, have been nothing but recurring episodes of step-motherly treatment from this government.
Yes, it is true that the budgetary allocation for the Ministry of Agriculture and Farmers’ Welfare has indeed gone up from the previous fiscal—rising from INR 75,752 crores to INR 1.39 lakh crores. But in the fine print one realizes that this seemingly increased attention for the agrarian sector, comes, rather disappointingly, mainly from the Rs 75,000 crores that has been allocated this time for the expanded version of the Pradhan Mantri KisanSamman Nidhi (PM-KISAN) which provides 14.5 crore farmers of the country with an annual income transfer of 6,000 rupees.
As we in the Opposition have repeatedly pointed out, the PM-KISAN scheme in its current form is clearly divorced from the reality of the acute agrarian crisis the country is currently facing. Announced first in the Interim Budget of February 2019, the present government decided that theburden of the farmer was only worth a paltry Rs 500 a month.In their pitiable attempt to reach out to a community where the average annual indebtedness stands at Rs 47,000,did the government really believe that a 500-rupee note would provide relief to a farmer in the throes of existential despair? Do they believe that salvation will come to him in the form of Rs 16.5 a day?
Or even lower, for in the average rural household of 5 members, it would mean Rs. 3.3 a day, a staggering low of 1/8th of the poverty metric of Rs. 27.2 per person and much lower than what they could earn through the MGNREGA scheme that our party championed? No, the idea was not to provide genuine relief, but just enough to win votes. Ghalib will forgive us if we change his lines a little:
“Hazaaron Khwaishein Aisi, Ki Har Khwaish Se Dam Nikle,
Hum Chale The Kisan Suraksha karne, Laute 500 rupyeliye.”
Respected Speaker, This cynical lip service to those who put food on our tables could not have come at a worse time. Just look at the situation the farmers of our country find themselves in. In 2016, the present ruling dispensation made a song and dance about their commitment to doubling farmer income by 2022.
But as widely available data confirms, if anything, since then farmer incomes in the country have in fact fallen, growth rate in the sector has slowed down to a crawl (again acknowledged in the Economic Survey but not in the Budget), input prices, and therefore cost of cultivation, have risen alarmingly, but earnings have fallen, and the procurement system of MSPs has largely failed to assuage the crisis faced by the debt-stricken farmer. To make things worse, the southwest monsoon, which accounts for 70 per cent of India’s annual rainfall, has so far seen a deficit of 26 per cent, leading to a 27 per cent decrease in planting in the kharif season.
Farmers across the country have risen in protest and have marched in order to flag the attention of a government that has consistently, systematically and unconscionably failed them. What reception have their legitimate concerns received? In Delhi they were ignored, in Nashik they were harassed and in Mandsaur they were shot.
Our kisans could be forgiven for changing the words of another well-known shayari and saying:
“AlwidaKehte Hue, Jab Maine Is Shaksh Se Pucha
Ke Koi Nishani To Do, [repeat]
Wo Muskurate Hue Bole, Goli Le Lo.”
Under these grave circumstances, it is not surprising that the allocation for support schemes like the Pradhan Mantri Fasal Bhima Yojana, the government’s flagship crop insurance scheme, has seen a modest increase from INR 12,975.7 crores (2018-19 revised estimates) to INR 14,000 crores in the current fiscal. But in her address, even while the Finance Minister began by praising her government as one whose ‘signature was in the last mile delivery’, there has been no mention of the glaring loopholes in the crop insurance scheme that undermine its supposed benefits for its beneficiaries.
Since the implementation of the PMFBY, insurance companies have collected annual premiums far exceeding their payouts to the aggrieved farmers. What they have paid has not been timely. Recent reports based on data from the government’s own Ministry of Agriculture, points out that as of May 10, 2019, out of the 12,867 crore of claims that have been filed (and certified by the concerned state governments), 40 per cent of claims (5171 crores) from the kharif season that ended in December 2018, remain unpaid.
As you must be aware, Mr Speaker, according to guidelines of PMFBY, claims have to be paid within 2 months from the end of harvest—which means February 2019, (but hadn’t been paid by May). By comparison, earlier, under the equivalent UPA schemes, [National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS)], the gross premium collected was Rs 10,560 crores and total claims paid were Rs 28,564 crores. In fact, enrollment in the PMFBY scheme has fallen from 58 million farmers in FY 17 to 55 million farmers in FY18. But it still remains a golden goose for insurance companies. In a country suffering from agrarian distress and farmer suicides, we cannot afford to have a scheme that enriches the insurance companies, but gives a raw deal to the poor farmer.
Aakhir is dardkidawakyahain,
At the same time, there is also little investment in other schemes for farmers that could have actually helped reach the target of doubling their income by 2022. For instance, the allocation for agriculture-related research and education, which many experts have pointed out offer great returns on investment, has only risen marginally from 7,953 crores (FY18-19 revised estimate) to 8,078 crores and remains more or less at 0.37% of the agricultural GDP—far short of the 1% that is the globally accepted requirement for increased productivity and competitiveness in this sector. There was also the mention of the return to ‘zero budget farming’, which is puzzling: uskamatlabkyahain?
Aakhirhamarekisanonka budget waisebhizerohain, Mantriji! Aaptohchemical fertiliser subsidy keliyesirf 9000crorediyehain, auraapParamparagatKrishiVikasYojanakosirf325 crorediyehain. Zero budget tohsahihain: PradhanMantriKrishiSinchaiYojanabadhayahainsirf 17 per cent—marginal increase of 17 per cent—aur diesel subsidy—jodenachahiye jab baarishkumhain (in rainfall deficit areas) sir72 crore—auryeh jab deshkekayeeilaqon mainsevere droughtchalrahanhain.Yehtohkisanonkeliyebilkul zero budget hain, Chairman Sahib.
We cannot afford to be misled by this Govt’s rhetoric and empty promises, Mr. Chairman. You have to walk the talk.
“Terevaade par jiye hum, tou ye jaanjhootjaanaa [repeat]
Kekhushee se mar najaate, agar aitbaarhotaa.”
Then there is the grand announcement of the ‘Matsya Sampada Yojana’ under the Department of Fisheries– Department, still not the separate Ministry long promised by this Govt, which the government had outlined in its 2012 National Policy on Fishing and Fishermen and promised in its 2014 manifesto. Now you claim this Yojana will introduce a robust fisheries management framework. As the MP from Thiruvananthapuram, which has a significant fishing community, I have repeatedly pushed this government on the urgent need for a dedicated Ministry to look after the interests of a sector that is the source of livelihood for nearly 4 million of our country’s citizens.
Most members of these communities represent some of the country’s most vulnerable groups economically and environmentally. Many live below the poverty line. A dedicated Ministry tasked with securing their interests would have gone a long way towards giving them a future. And yet, in response to my questions, I have been told that there is ‘no rationale for the creation of a separate Ministry for fishermen’. And the effect of the lack of a dedicated Ministry for the fishermen shows—the Budget talks about a Blue Revolution but it has alarmingly failed to allocate a single rupee for the strengthening of our coastline through a sea-wall.
In my consituency, from Pallithura to Pozhiyoor, from Valiyathura to Shankumukham, every single day, large swathes of our coastal land is being washed into the sea as a result of widespread coastal erosion. It is affecting the homes, the livelihoods of lakhs of fisherfolk, but their repeated pleas, which I have raised three times in Zero Hour, have fallen on deaf years. You have actually reduced the money for the Coastal Management Program by 42 per cent in your budget! When the Ministry responsible is more concerned with cow protection that protecting fishermen, obviously is better to be a cow than a malsyathozhilali in India today.
As an MP from Kerala, let me also point out that this is part of a pattern of continuing neglect of the needs of my state. The money required for the rehabilitation of Cyclone Ockhi victims has still not been provided; there is practically nothing for the victims of last August’s Kerala floods either. Our fishermen, mostly living below the poverty line, demonstrate great heroism in rescuing thousands of people in the floods, but our requests for help to Rebuild Kerala have been rejected in this Budget, against an internationally-conducted damage assessment of ₹31,000 crores needed for this purpose. Where is the corpus for rubber farmers and assistance for economically vulnerable immigrants returning from Gulf countries? We want their remittances, but we want to do nothing for the people who have been sending these remittances, when they lose their jobs and come back.
My request for establishing the National Institute of Medicinal Plants in Thiruvananthapuram has been continuously overlooked and the promised National Ayurveda University, as an institute of national Importance, has not come either. Despite the Government’s big talk of promoting Ayurveda, it has failed to harness Kerala’s potential in traditional knowledge and Ayurvedic medicines and herbs, even though I had a public oral commitment from the AYUSH Minister when he came to Thiruvananthapuram last year.
The Plantation industry in South India, especially in Kerala, consisting of tea, coffee, rubber and cardamom plantations, is providing employment to over 1.5 million workers, that too in remote areas. But it is under great financial stress due to unremunerative prices and high cost of production. Money due to these plantations under various schemes is not being cleared, due to lack of funds with the Commodity Boards. Therefore, we need to increase allocations to these Boards. Unfortunately, this has been ignored in this Budget.
Similarly, there is no proposal to upgrade the National Institute for Speech and Hearing in Thiruvananthapuram into a National University for Rehabilitation and Disability, as was promised by the previous government or the Regional Cancer Centre to a ‘Centre for National Importance’. None of these vital needs have featured in the budget.
This Budget prompts such disappointment in most of the public in my state that it brings to mind a famous poem many of you know:
“Hogayihain peed parvatsipighalnichahiye,
Is Himalay se koi Ganga nikalnichahiye.
Aajyehdeeewar, pardon kitarahhilnelagi,
aur mere seene main nahin to tereseene main sahi,
Sirf Hungama khadakarnameramaksadnahin
Respected Mr. Speaker, But Kerala is not the only example of this government’s neglect. In her address, barring a passing mention to allied fields like skilling and the national apprenticeship scheme, the Finance Minister barely scratched the surface of arguably the greatest crisis that is facing India today: The crisis of jobs in the country. After dismissing findings from a leaked NSSO report earlier this year, the government did a full u-turn after the elections, and as per its own Ministry of Statistics and Programme Implementation,the unemployment rate in the country stood at 6.1 per cent of the total labour force, a 45 year high.
The data went on to show that 7.8 per cent of all employable youth in urban areas were jobless, while the same figure was 5.3 per cent in the case of rural India. Similarly, joblessness among men stood at 6.2 per cent, while it was 5.7 per cent in the case of women.
Now its all very well for the Finance Minister to claim that ‘IndiaInc are India’s job-creators’ but the fact remains that government’s repeated and deafening silence on this issue is truly shocking. Gone were the days when it parroted the PM’s promise to create 2 crore jobs every year. Nowadays it appears silence is all that India’s youth will be left with from this government. The current Budget has no specific schemes for youth unemployment, except the unsuccessful and hollow skill development scheme, with its underwhelming record of under-achievement. You call the youth Bhagya vidhatas but you give them no jobs to create their own Bhagya. This is worrying for more reasons than one.
To start with, by the own admission of the Economic Survey, the demographic dividend that we are so fond of talking about, is about to disappear on this government’s watch. The document has clearly highlighted that India’s population growth rate will slow down in the next two decades (<1% in 2021-31 &<0.5% in 2031-41). It also notes that while the country has a whole will go through a ‘demographic dividend’ phase, some states will start transitioning into an ageing society by the 2030s. Which effectively means that we are genuinely in the last decade to utilise our demographic dividend. But it would appear that this government would rather go down in history as the government that squandered this golden opportunity on its watch.
It is all well for this government to talk of a ‘New India’ but they fail to acknowledge that any discussion about New India, about India’s future, centres on India’s youth. After all, who else are we building this ‘New India’ for if not the young? We have trained world-class scientists and engineers,but 287 million of our compatriots are illiterate, 37% of the global total, and we have more children who have not seen the inside of a school than any other country in the world does.
For the moment we have a great demographic advantage with the majority of the population under 25 and a startling 65 per cent under 35. This is potentially a young, dynamic labour force that could deliver to us that demographic ‘dividend’ so often proclaimed across global platforms. China, Japan, and even South Korea (our major East Asian competitors) are facing a serious demographic squeeze, and the rest of the world is ageing. We will too and therefore time is of essence if we want our youth to not only be part of India’s development, but drive it.
This requires us to provide them with both education and employment opportunities on an unprecedented scale. But education is not your priority: While the government has increased the total allocation to the Education sector from 83,625.86 crores to 94,853 crores, this still falls well short of the Kothari Commission recommendation that expenditure for education must be at least 6 per cent of the GDP. You are not even at half that level.
The Budget estimate for post-matric scholarships for SC students has been slashed from Rs 3,000 crore last year to Rs 2,926 crore this year. Similarly, post-matric scholarship for ST students has been reduced from Rs 1,643 crore in 2018-19 RE to Rs 1,613 crore this year. According to activists from the Dalit Arthik Adhikar Andolan,the allocations for fellowships and scholarships to PhD and post-doctoral students hailing from SC/ST backgrounds tell a similar tale. Worryingly, thefunds for teacher training, that most experts agree is key to the success of our education sector, have also been slashed, moving down from 871 crores in the last Budget to a meagre 125 crores in the current Budget.
There is of course the increased allocation for research under the National Research Foundation, which is welcome in theory—but again, only time will tell if the government will use this body as a backdoor to centralise government control of research, clamp down on academic and intellectual freedom on our campuses and hold research aid to our universities to ransom, subject to the kind of research they produce.
The government also talks about developing world class institutions in India and has allocated money for this, but has coupled this withslashing allocations for existing world-class institutes such as our IIM’s whose share of central allocations have fallen to 445 crores from the 1036 crores they received last year, as well as a reduced allocation for the Higher Education Financing Agency.
Last week the students of Bangalore’s National Law School University, who already pay 1,80,000 a year, were suddenly told, with no prior warning or consultation, that their fees were going up by 50,000 rupees more. You can imagine what this does to those studying on loans or scholarships. This is arguably the best legal university in the country, and a sound legal education is a foundation for our democracy. But this Government will not invest in subsidizing scholarships for our best students, preferring to waste its money on grandiose statues instead.
Yes, there was the laudable increase in allocation for free and subsidised UPSC coaching for minority candidates, from 8 crores to 20 crores, which we would have unanimously welcomed, had the government not simultaneously reduced the allocation for education empowerment as well as funds for pre-metric and post-metric scholarships for Muslim students.
Starving education is bad enough, but the allocation for Defence, a sector that was barely mentioned by the Finance Minister, requires our attention as well. The Defence allocation has crossed the 3 lakh mark, but as my Party has repeatedly pointed, this represents merely a 6.87 per cent increase from last year’s allocation of 2.98 lakh crores which was 1.58 per cent of the country’s GDP, the lowest since the 1962 war. Even with the current allocation (once adjusted for inflation), many defence experts have pointed out that the increase is insufficient to meet the modernization requirements of the armed forces, which, in a testimony to the Parliamentary Standing Committee on Defence, pointed out that 68 per cent of the Army’s equipment belonged to the ‘vintage’ category.
It is all very well for the Finance Minister to begin her speech by talking about the importance of national security and her counterpart, the Defence Minister, to repeatedly point out that financial constraints will not affect capacity building, but the paltry allocation and the lack of mention in the Budget address really does question the intentions of this government.
We expect our Armed forces to offer ‘punitive’ deterrence against Pakistan and ‘credible’ deterrence against China, but what is the government doing to aid and assist our forces in maintaining the requirements of national security that we thrust on them? To provide one illustration offered by a credible expert and former Lt. General, the current 13th Army Plan (covering 2017-22) is likely to have only 300 odd schemes compared to the 700 that was laid out by the 12th Army Plan. No wonder when you ask “where’s the josh?” you get long faces from the defence experts. Where’s the money? They reply.
I am sorry to say, Mr. Speaker,it would appear thatfor this government, empty political sloganeering, dialogues from movies and the appropriation of our military for electoral ends, matters more than how best we help and equip them to protect the country.
There were other plenty of misses and half positives that I would like to quickly touch keeping in mind the time. For instance, environment: there was the laudable emphasis on electrical vehicles in the Budget, which is important keeping in mind the afflictions of pollution, but at the same time, no mention of the serious lack of infrastructure to support a roll-out at this stage. Similarly, in the vision for the decade, while one criterion was a ‘ Pollution Free India with Green Mother and Blue Skies’, the actual allocation for the concerned Ministry is so abysmal that at Rs 2,954.72 crores, it is even less than what was spent on the Statue of Unity in Gujarat! There are substantive cuts to allocations for the National Green Tribunal (-74 per cent), ‘Environment Protection Management and Sustainable Development’ (-8.5 per cent) and the cherry on this shocking cake, a mere40 crore for the implementation of the Climate Change Action Plan.
Then health care: There was also an increased allocation for the government’s flagship Ayushman Bharat scheme, which rose 220% from 2000 crores in FY 19 to 6000 crores in the current Budget. But as with the Fasal Bhima Yojana, this may very likely benefit private hospitals and insurance providers, rather than the aam aadmi, and comes at the cost of pivotal schemes such as the National Health Mission (allocation reduced by 1167.88 crores) and the government commitment to create 1.5 lakh critical Health and Wellness Centres by 2022—As of February 2019, only 1.6% of this target, or 2458 centres, has been met.
And finally there was also the striking missed opportunity in the tourism sector, where it is well known you can create 8 times more jobs than manufacturing, and that too employ unskilled and semi-skilled labour: it takes little training to be a waiter, a doorman, a busboy, a gardener’s assistant. But your Budget gives no major tax breaks for the industry, no incentives for PPP model development and no encouragement to invest in jobs dedicated to servicing the hospitality industry.
Respected Chairman, The Hon Finance Minister declared, echoing the Prime Minister, that this was a Budget for a bright and stable “New India”, an India where every woman, man and child would be given an empowered and dignified standard of living, in a society that harnesses India’s entrepreneurial spirit to become an economic powerhouse.
But, as usual with this government, between the rhetoric and the reality there falls a great shadow. For all its slogans, statements and ideals, one is struck by the complete lack of any glimpse in this Budget of how our country is going to achieve any of this. Yes,you have won votes by building toilets under Swachh Bharat, and you are ready to declare an Open Defecation Free India, but studies show that 65% of these toilets have no running water.You have given gas cylinders (shabash!) but 90 per cent of the recipients cannot afford to refill their cylinders and so continue cooking in dangerous chulhas fuelled by wood or cow dung and inhaling toxic indoor fumes.
Meanwhile, sadly, withvigilantism, mob lynching and increasing assaults on women and girls, the road to New India appears littered with the wreckage of all that was good and noble about the old India.
As the poet Dushyant Kumar put it,
“Kahaa Ntoutaithaau jaalaahar ghar keliye
Kahaa Nchiraag Hmayassarnahi Nshaharkeliye”
Whether it is the ‘Achhe Din’ of 2014 or the ‘New India’ of the present, under the BJP government, these Budget speeches appear to be meresubterfuge, a smokescreen for the real agenda of Divided India that this government has pursued since coming to power five years back.
The ‘Achhe din’ sloganeering has met the reality of the economic doldrums we find ourselves in. No wonder you are talking of ‘New India’, when you have made such a mess of Old India.
We may yet be able to address our staggering economic challenges if our leaders develop the capacity to look at the bigger picture. Even during the best phases of our growth in recent years, growth was never only about per capita income figures or enabling businesses. It was always a means to an end. And the ends we cared about were the uplift of the weakest sections of our society, the expansion of possibilities for them, the provision of decent health care and clean drinking water. Those ends remain. Whether we grow by 9 per cent, as we once did, or at 5.8 per cent as we did in the last quarter, our fundamental commitment must be to the bottom 25 per cent of our society.
“PradhanMantrji man kibaatkartehain, VittMantridhankibaatkartihain, lekinaapki Sarkar jankibaatkabkaregi?”
Your idea of New India is one of exhortation: Make in India, Digital India, Start-Up India, Stand Up India, Sit Down India. Our new India must be one of consultation. We must never speak of ‘India Shining’ without asking who India is shining for. Our new India must follow policies that both promote higher economic growth and also ensures that the benefits of our growth are enjoyed by the poor and disadvantaged sections of our society.
The choice is clear. We can have a new India that belongs to all of us, led by a government that works for all of us. Or we can have a new India that belongs to some, and serves the interests of a few.
You can choose a new India that embodies hope, or one that promotes fear. You can support a new India united in striving, or an India divided by hatred.
I believe we must build New India on solutions to our major challenges. We have to overcome our poverty. We have to deal with the hardware of development, the ports, the roads, the airports, all the infrastructural progress we need to make, and the software of development, the human capital, the need for the ordinary person in India to be able to have a couple of square meals a day, to be able to send his or her children to a decent school, and to aspire to work a job that will give them opportunities in their lives to transform themselves.
We have to tackle and end corruption. We need to conquer these challenges, real challenges which none of us in India can pretend don’t exist. But it must take place in an open society, in a rich and diverse and plural civilization, in one that is open to the contention of ideas and interests within it, unafraid of the prowess or the products of the outside world, wedded to the democratic pluralism that is India’s greatest strength, and determined to liberate and fulfil the creative energies of its people.
As Ghalib pointed out:
“Nazar Ko Badlo Toh Nazare Badal Jate Hai,
Soch Ko Badlo Toh Sitare Badal Jate Hai,
Kashtiya Badal Ne Ki JaruratNahi,
Disha Ko Badlo Toh Kinare Khud Badal Jate Hai.”
We must remain faithful to our founding values of the 20th century if we are to conquer the challenges of the 21st and build the New India that you seek. In the words of Makhdoom Moideen, known as shayar-e-inqalab: “Hayat le kechalo,kayenat le kechalo