Modi Government’s Union Budget Intensifying Attacks on People

Rail Budget

Bullet Train Vs People’s Concerns

The Modi Government’s first Rail Budget is a step in the direction of handing over the precious national asset of Indian Railways over to private interests and FDI – at the cost of the common passenger and the health of the Railways in general.

99% of Indian passengers demand safety, amenities, affordability and adequate availability of accommodation. The Modi Government’s budget sacrifices all of the above in the name of the fad of a ‘bullet train’ for a tiny minority.

One of the burning concerns of people has been the spate of Railway accidents. The Rail Budget of the new Government does nothing to address these concerns. The main reason for the repeated accidents has been the failure to fill up 3 lakh vacant posts, leading to a situation where the Railways lack adequate staff to carry out basic safety procedures, and drivers are overworked and forced to work long inhuman hours without sleep. The Kakodkar Committee Report on railway safety in 2012 had estimated that some 15000 people die every year in railway accidents and fires, and had termed this an unconscionable ‘massacre’. The Committee had recommended an expenditure of Rs 20000 crore per year on safety measures. The Rail Budget totally fails to allocate such an amount or outline measures to bring down accidents by employing sufficient staff, upgrading maintenance, and shifting to fire-resistant materials in coaches.

In the name of shortage of funds, the Railways are being privatised through the PPP route and by introducing 100% FDI in Railways. The experience of airports has shown that PPP is a gateway for corruption and for facilitating exploitation of a public asset for private profits, inevitably leading to greater cost burden borne by the passenger and no improvement in efficiency, safety or comfort.

The Rail Minister has admitted that only one out of 99 projects sanctioned in the last decade has been completed – but has failed to outline a comprehensive plan to complete these projects.

The Rail Budget has tried to divert attention from its failures in these crucial areas by highlighting the Bullet trains.

Are the Railways short of funds, necessitating privatisation and FDI? On December 31 last year, the Times of India reported that a CAG test audit revealed that iron ore exporters had cheated the Railways of close to Rs 50,000 crore during 2008-12 (as reported by RUPE in its January 2014 Report ‘The Truth about the Railways’). The iron ore exporters illegally availed of the subsidised rates offered for those moving iron ore for domestic consumption. The RUPE report had observed “Thus, in order to provide a giant subsidy to firms plundering the country’s natural resources, the Government starves Railways of safety and developmental expenditures, in which the travelling public and the Railway workers have a common interest.”

Even before the Rail Budget, rail passenger and freight fares were massively hiked. Fares will also go up with every increase in fuel prices, since the Budget links future fare increases with fuel adjustment.

The Rail Budget is a blueprint for privatisation and corporatisation, imposing greater burdens on common people and displaying complete callousness to the existing crisis of passenger safety and rail workers’ conditions.

Union Budget

Pro-Corporate, Anti-People

The Modi Government’s first Union Budget has continued and severely intensified the offensive on common people and benefits to corporations that marked the previous UPA-II regime.

The Budget has opened the floodgates of disinvestment of PSUs to the tune of 43000 cr, with FDI being increased to 49% in defence, insurance and e-commerce.

The Budget is remarkably silent on MNREGA and Food Security that directly affect the poorest sections, also on concrete measures to quell inflation, such as taking essential items off the list of commodities that can be traded in the futures and forward trading market. The Finance Minister, on being asked, said that the existing allocation for MNREGA will stand. Allocations for MNREGA have not been increased for years, in spite of steep inflation, and the Modi Government has continued with the same policy.

Most of UPAs schemes have been retained with only cosmetic changes and renaming with a saffron tint! National Skill Development has been renamed Skill India Idea, Accelerated Irrigation Benefit Programme (AIBP) has been named Pradhan Mantri Krishi Sinchai Yojana, JNNURM and Bharat Nirman has been turned to Shyama Prasad Mukherjee Rurban Mission and Rajiv Gandhi Gramin Vidyutikaran Yojana now has been reworked as Deen Dayal Upadhyay Feeder Separation Package.

The chronic under spending on social sector schemes is also another feature retained from the UPA days. While the defence budget has seen a whopping Rs. 30,000 cr rise from last year, allocations for all the social sector schemes are virtually stagnating even in nominal terms at last year’s level, while some specific allocations actually declining.

Allocations for MNREGS has been kept fixed at Rs. 33, 000 cr. as in the last budget. This is absurd in the face of un-paid MNREGA wages to the tune of Rs. 5000 cr. pending from last year and the recent Supreme Court order to pay MNREGA wages at the revised rate. Clearly, this will not only reduce the number of workdays but will fail to minimally compensate the working poor for the runaway inflation. However, what is crucial is that allocations for MNREGS under Major Budgetary Head has been shifted from item 2505 to 3601 i.e. from under the category of ‘central government’s anti-poverty programs’ to the ‘grants in aid’ to states. This will give space to the Centre to shirk its responsibility that the MNREGS Act mandates for monitoring the specific use of the fund as a legal right of the poor and open up scope for misuse and diversion by the state governments.

Allocations for Health and Family Welfare has seen a marginal nominal increase of about Rs. 500 cr. from Rs. 34382.48 cr. (in Chidambaram’s interim February budget) to Rs. 34874.86 cr. in this budget, mainly on account of setting up of AIIMS type super-speciality hospitals in different parts of the country. It is another matter, how a paltry Rs. 500cr can even start the process of setting up as many as 5 AIIMS type hospitals! This amount can be put in perspective by contrasting it with the 200 cr allocation for a single statue.

At the same time, allocations for important Hospitals and attached Medical Colleges like Safdarjang Hospital has been slashed from 614.54 cr. (Revised estimates of 2013-14) to 601.00cr (in 2014-15) under the Hospitals and dispensaries head and from 10 cr to 9.5 cr under education, training and research head!

The same is the story with allocations for other social sectors like Women and Child Development, ICDS, Minority Affairs where the allocations are exactly the same in nominal terms as last year’s or the interim budget of last February. For Drinking Water and Sanitation, allocations have seen marginal decline in nominal terms from Chidambaram’s interim 2014-15 February interim budget.

The share of Education in the budgetary allocation has declined from 4.69% in 2013-14 to 4.59% in 2014-15. Within the Higher Education expenditures, allocations for University and Higher Education have been slashed from Rs. 11844.29 (Revised estimates of 2013-14) to Rs. 11145.26 in 2014-15!

The Budget allocates a mere 500 cr for 5 new IITs – contrast this with the 200 cr allocation for a single statue of Sardar Patel, a pet project of Modi’s Gujarat Government that the Centre has now adopted! The Budget indicates that education will be left to predatory mercies of privatisation, which will put it out of reach of the vast majority of students in the country.

When it comes to employment too, the Budget fails to recognise the vast army of para teachers, ASHA, anganwadi and other rural health and education workers as government employees. The Modi Government continues with the model of insecure, casualised employment that exploits youth and women and also affects the quality of education and health services.

The huge infrastructure outlay in railways, roads, and ports has been allocated in the PPP framework. Experience has shown that PPP has been a system which has involved huge corruption, and which has meant private profits at public cost. In this case, the huge outlay will prove a bonanza for the real estate sharks who will use the PPP model to milk profits.

Some of the Budgetary decisions have immediate benefits to specific corporations. FDI in e-commerce has also been introduced; this in spite of an earlier white paper by the Department of Industrial Policy & Promotion (DIPP) stating that FDI in E-commerce would go against the spirit of restrictions imposed on FDI in multi-brand retail. BJP’s posture has been one of opposition to FDI in multi-brand retail, yet it is allowing it in by the back door with FDI in e-commerce. Modi’s team is known to have close connections with the e-commerce giant, eBay CEO Pierre Omidyar, with BJP MP Jayant Sinha having earlier served as head of the Omidyar Network in India.

The Finance Minister has also virtually put a hold on the restrospective taxation legislation that was enacted after the Supreme Court’s ruling in favour of Vodafone in 2012. This legislation allowed for retrospective taxation of overseas transactions which involve assets primarily in India. Now, the Finance Minister has set up a high-powered committee to vet each case before invoking this law. It may be remembered that the Finance Minister Union Finance Minister Arun Jaitley recently recused himself from matters pertaining to the Rs. 20,000 crore Vodafone tax dispute and delegated decisions in this matter to his junior Minister Nirmala Sitharaman. It may be presumed that he recused himself because of a conflict of interest emerging from possible prior association with the corporation in his capacity as a lawyer. Surely a conflict of interest is also indicated if the retrospective taxation legislation that directly pertains to the Vodafone case and similar matters, is weakened by the present Finance Minister?

The Budget extends the 10-year tax holiday to power companies.

The Finance Minister has also indicates that ‘hurdles’ in the path of mining will be removed and mining will receive a boost. Those hurdles, of course, have been the adivasis fighting for their survival and their rights to forests and land. The need of the hour was the nationalization of mining, to end to open plunder of our precious mineral resources by corporations and MNCs, resulting in huge corruption. Instead the Budget Speech indicates that hurdles in the path of this plunder will further be removed.

The Economic Survey also indicates a shift to a regime of cash transfers and erosion and undermining of the MNREGA.

All in all, the Modi Government’s first Budget is openly pro-corporate and anti-poor in its orientation, and does nothing to alleviate price rise and usher in the relief promised to the people by Modi’s election campaign.

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