Terming the budget as “contractionary”, a “complete gimmick” and full of ‘jumlas’ (rhetoric), the CPI(M) today said it would neither help in expanding domestic demand nor increase employment but burden the people as the government aims at “substantially” hiking indirect taxes to raise resources.
“The Finance Minister has joined the Prime Minister and the BJP President in producing ‘jumlas’. And this budget is a classic example of that,” party General Secretary Sitaram Yechury told reporters here.
Maintaining that the budget was “completely opposite” to the recommendations of the latest Economic Survey that the government should look inwards and bolster domestic demand, he said, “This is a contractionary budget and not an expansionary one… It’s a complete gimmick.”
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To buttress his views, he reeled out data from the budget document and said revenue expenditure as a percentage of GDP was 13.36 per cent last year, compared to 12.74 in 2017-18.
“This year’s budget includes the revenue of Railways also, which was not there in 2016-17… so compared to the last budget, the revenue has declined substantially,” he said.
While capital expenditure in 2016-17 was 1.86 per cent of GDP, this year it was 1.84 per cent, including Railways, and 1.51 per cent without Railways, the CPI(M) leader said.
The expenditure on MGNREGA last year was Rs 47400 crore, which was increased to Rs 48,000 crore this year, which is “a cosmetic increase, given inflation, and solely intended to play to the gallery”, he said.
On Finance Minister Arun Jaitley’s remarks about fiscal consolidation, Yechury said the fiscal deficit has come down to 3.2 per cent from last year’s 3.5 per cent. “This decline is due to the major hike in excise duty on petroleum products. The revenue receipts have gone up substantially due to this.”
“If you are expecting a nine per cent less revenue this year and your fiscal deficit is also less, it means that your expenditure has contracted,” he said, adding “that’s why it is a contractionary budget”.
He said the government was aiming to raise revenue to bridge the gap of reduction of direct tax receipts by Rs 20,000 crore by “raising Rs 60,000 crore through a huge hike in service tax, customs and excise duties, thereby imposing severe burden on the common man.”
Referring to demonetisation which was effected from November 9 last year, Yechury said, “The negative features of it have not been taken into account as the third quarter data have not been dealt with in the budget.”
“There is not a single word on recovering the massive NPAs (non-performing assets of banks), though the government would only act against those who have fled abroad,” he said, adding that the NPAs amounted to Rs 11 lakh crore while the “entire budget is Rs 24 lakh crore”.
“The government does not intend to confiscate the properties of those responsible for these NPAs and duping the banks, but wants to deal only with those who flee to foreign countries,” Yechury said.
On the budget proposal to abolish FIPB, he said FIPB was not just to attract foreign investment but also acted as a regulator. “Now by removing the regulator, the government is allowing FDI increasingly through the automatic route. There will be no further regulation of foreign capital.”
The listing of PSUs in foreign stock exchanges would lead to trading of their stocks by FIIs and therefore, sale of the state-run bodies to foreign entities.