Preview of BudgetTime was when "Economics", the "Dismal Science", was called "Political Economy". The pre-budgetperiod is ...
Preview of BudgetImpending elections in a few States impinge on Governments Economic choices. The "imperialistic"style of ...
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Preview of budget

Published on: Mar 4, 2016
Published in: Economy & Finance      

Transcripts - Preview of budget

  • 1. Preview of BudgetTime was when "Economics", the "Dismal Science", was called "Political Economy". The pre-budgetperiod is when Economics does indeed become Political Economy with a vengeance. It is especially sowhen the party in power hangs on by means of a coalition the maintenance of which depends on the"sharing of spoils" among a jumble of parties; and more so, when the representatives of these partiesaim at maximizing personal gains.In such a situation, the "Budget" becomes an exercise in trading off benefits to the corporate dispensersof financial largesse, but hoodwinking the people that their "benefit" is the overwhelming concern ofthe Government.As has been rightly observed, India today is a government "of the rich, for the rich, by the rich". We hadpassed through a "depression", which left the Corporate Sector enjoying histories of profit moreglorious than ever. Under this slogan of "depression", companies downsized employment, modernizedequip-ment, manipulated Government to grant concessions, and disarmed trade union militancy. Bankslent more money on easier terms, and profited fantastically; all of them made profits and the biggestscored records of sorts. Now, "Recovery" is possible at much lower wages/salaries cost. Real wages arelower, inflation having eroded the value of money, and the unemployed accept less advantageousterms. Government won a "Glorious Victory" when it enforced the power of Oil Companies to increasepetroleum prices ("dismantling the administered price regime"). Though it has declared war onsubsidized supply of food items to the poor (except for the fictitious "Below Poverty Line" segments), itcontinues to subsidize Oil Companies to the extent of 8000 or so Crores of Rupees for accounting lossesfor not passing on price increases on kerosene.What we passed through would have been called "stagflation" had it not been fashionable to forget oldjargon for new. The mythical God, "Growth", was propitiated, but it did not entail increasedemployment. Now the slogan is "In-clusive Growth", but that seems to be interpreted as meaningspreading tentacles of the banks into rural areas to tap more of the meagre savings of the poor, andcatch them in ever tightening debt traps, enslaving them to the new oligopolies cornering agriculturalproduce. These corporate giants buy the produce from the bonded farmers at prices just above thelowest in the local market. Banks finance the corporates liberally in this operation, and for establishingcold storages, so that the produce can be sold when prices are high. That is the secret of the persistentinflationary pressure on food articles constituting what used to be called "wage goods", viz., the itemsthat are the necessary ingredients in the requirements of the poor.It is no longer possible to frighten the people into submission with the hoax of a "depression"; thatbonanza is past. Time was when an exceptionally imaginative Finance Minister wove fantasies out of thebiased statistics of his minions to boast that the "Inflation Rate" was under control, and ultimately wentbelow zero. Even the Government endowed with such wizards can fool all people only for some time.Truth caught us when food prices started rising at double-digit rates of inflation. The salaried classes,perhaps the most influential "middle class" in India, are lulled into lethargy by "Dearness Allowances"and periodical "salary revisions". The poor, as always, have to bear it all.
  • 2. Preview of BudgetImpending elections in a few States impinge on Governments Economic choices. The "imperialistic"style of functioning of a previous Finance Minister would have lost quite a few votes; the currentMinister is known for his suavity and ability to make the worse appear the better! We may expect a lotof fancy terminology in an attempt to hide the awful realities of the sacrifices that will be thrust on thepoor. The further concessions to Big Business will be justified by high-sounding propaganda that theyare necessary for "Growth". A few seemingly anti-inflationary moves like Central Banking measures(raising interest and repo rates, etc.), will be more than made up for by more "liberal" bank credit fortrading in agricultural produce. There will be many "crocodile tears" shed about the falling productivityand the need for doing "something" for the farmer, combined with sermons on how hurtful it "really" isto alleviate the suffering by means of subsidies.The fact that corporates will be subsidized by the differential interest rates for stockpiling of agriculturalproduce will be hidden. There may be reduction in tax on some items like tractors and spare parts,pumps, agricultural machinery, refrigeration equipment. That serves a double benefit for Government -advertising "mileage", as well as the loyalty of the corporates manufacturing these items! A third benefitdepends on the banks; they could push loans on farmers for purchase of these items as part of "InclusiveGrowth" through banking! Of course, the better off farmers make common cause with the rich.Government will feel there is less need for justifying the benefits the Budget will pass on to the "REAL"Indians - the Corporate Giants like the Tatas, the Ambanis, and so on, well known names, as well asnameless new operators. Of course, though not "Indians", this category will include global capitalistenterprises to which Indian companies will be increasingly tied. The inflow of Foreign Direct Investmentwill be further enabled by more concessions, called "Special Zones" and other labels. IT, and other infra-structure centred tertiary sector oriented companies will be further assisted. The Defence budget will begenerously increased - that will help the great big arms manufacturers in USA and elsewhere, and gainthe loud acclamations of the most powerful on Earth - and perhaps a "permanent seat" in the UNgoverning bodies.Inevitably, the inflationary pressure will continue; it will be glorified as a concomitant of the Great God"Growth". Growth of gains of the already rich; of the assets of Ministers and politicians, of pollution andgrab of forest lands by international corporates like Vedanta, and of so-called "Smart Cities" of the elec-tronic age of bewilderment. And growth of the impoverishment of the poor, and of the enslavement ofthe farmer, and of the helplessness of the labour force. The poor in India suffer more deprivation thaneven those in sub-Saharan Africa; they will be, in the near future, be listed among the poorest of thepoor.

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