The Interim Budget

An interim poll-eve Union   budget was on expected lines with gimmickries added to attract voters. Otherwise also, it was a traditional altering tax-rates slightly from here to there. Most surprising and disturbing feature was a heavy cut in excise-duty for cars of all segments, a policy absolutely in contrast of promoting public transport. Does Union government want to make roads even more congested and consumption of petrol and diesel increased instead of being decreased?

Union Minister Jairam Ramesh had once rightly termed SUVs as 'Socially Useless Vehicles' misusing diesel-subsidy for elite rich. Earlier the then Delhi Chief Minister Shiela Dixit had also insisted on discouraging big cars which occupy more parking space and road-traffic share.

In truth the interim budget presented by P Chidambaram has nothing new. But what strikes the discerning observer is the package of concessions given to the producers of goods for upper middle class consumption. For example, he has made cars, motorcycles, scooters and relatively costly mobile phones cheaper. But the price of cheap mobile phones used by low-income groups is not going to fall, rather it will rise. It is clear that the rise of the Aam Admi Party has worried Chidambaram, and he tries to appease the middle classes, lest they should go over to this new force or to the BJP, which is breathing down the neck, at the coming LOK Sabha polls. What will happen to coarse cloth and life-saving drugs? Or will the rural poor have to remain satisfied with one-teacher schools? Of course military spending is to rise, because India has to fight Pakistan, while remaining subservient to the lone superpower, namely the USA. The budget on the police and para-military forces has also gone up.

What needs to be pointed out is that this budget contains no provision for reducing the extreme inegalitarianism in the economy. Instead there is the meaningless obsession with growth, or 'predatory growth'. Chidambaram has dished out the hope that the growth rate will go up in the coming months. Growth in the production of cars, refrigerators and costly mobiles etc catering to the needs of the affluent middle classes constitute the essence of this 'industrial growth'.

It is true that over the last two decades, the pattern of investment of the corporate tycoons has been increasingly oriented towards those goods that are non-basic by Indian standards. This is understandable, because the demand for these goods rose phenomenally in consequence of the large growth of income of one section, say about twenty five percent, of the population. The world recession hit the industries producing these goods very badly, one reason for which was the fall in relative income of these affluent groups. The Government, in the face of this demand crisis, took some measures to boost up the market. One of them was to raise the salaries and allowances of teachers, clerks, administrators, and government officials, bank employees etc almost unimaginably. But these measures are not enough, and the industrial recovery is still a long way off. For the time being, the well-to-do sections of the masses have to be appeased and made to vote for the Congress. Just before the general elections they have to justify certain things and they have to blow up certain things. In a sense the interim budget has listed UPA government's achievements in the past 10 years.

Frontier
Vol. 46, No. 35, Mar 9 - 15, 2014