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Union Budget 'reduces' spending on key govt programmes, to negatively impact economy

Counterview Desk
More than 50 organisations, including labour unions, farmers' groups and campaigns working on issues of food security, health, education and employment came together at Jantar Mantar to protest against the 2020 Union Budget presented by the BJP government.
Following the protest, the main leaders -- Anjali Bhardwaj, Rahul Roy, Hannan Mollah, Gautam Mody, Annie Raja, Beena Pallical, Dipa Sinha and Anupam Sindhu -- issued a statement on behalf of the participating organisations stating that the Union Budget has sought to undermine people-oriented schemes and the social sector.

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Terming the budget anti-people and anti-poor, speakers criticised the government for not providing any relief to the millions of people who are hit by the twin maladies of economic recession and inflation.
People expressed their deep anguish over the high levels of unemployment which they are having to bear the brunt of, and said that the budget cuts in food subsidy and Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) were perverse.
They said the budget totally failed to address the crisis of unemployment and reduced consumption which needed to be combated by providing more employment in MGNREGA and in the public sector. The move towards privatisation of companies like the Life Insurance Corporation (LIC) was sharply criticised.
People gathered at the protest said that instead of focusing on the pressing issues that impact people’s lives, the government is busy distracting people with divisive agendas like the Citizenship Amendment Act (CAA), National Register of Citizens (NRC) and the National Population Register (NPR).
Eminent economist Prof Jayati Ghosh, said many figures in the budget were wrong and the government was misleading the people of the country. The Union Budget 2020-21 comes at a time when the economy is in dismal shape. The economy is growing at barely 5% while inflation, especially food price inflation is already above 7%. Savings, investment and output are down.
Unemployment is at a four-and-a-half decade high. Wages of workers and earnings of farmers and small businesses are falling. The poor, the marginalised and the working class have been very badly affected and are being pushed into misery.
At this time what the economy required was a sharp increase in government spending to boost the economy in order to create jobs and raise wages so that it would provide an overall impetus to consumption and investment. The BJP government has however done just the reverse.
It has, quite significantly, reduced government spending on key government programmes. This will have a greater negative impact on the economy: causing more job losses, further decline in wages and earnings both of which will force lower consumption sending the economy into a continued downward spiral.
For 2020-21 the BJP government is going to reduce the money available for food subsidy by Rs 70,000 crore from the existing Rs 180,000 crore which is the actual cost of the grain to be distributed through the public distribution system and other nutrition programmes under the National Food Security Act (NFSA).
For four years now, part of the food subsidy is being funded through loans from the National Small Savings Fund. This in fact makes the Food Corporation of India (FCI) vulnerable and undermines its crucial objective of ensuring people receive food at an affordable price while farmers receive remunerative prices for their produce.
Alongside, the BJP government proposes a reduction in funds available for the MGNREGA by Rs 9,500 crore from the current Rs 71,000 crore. This is over and above the unpaid wages including almost nearly 100% of wages in the 8 drought notified states.
Correspondingly, taking the rate of inflation into account, there is barely any increase in the funds for the anganwadi, maternity benefits and the mid-day meal programmes. These programmes taken together are the key to the wellbeing of the women and education of the young of the country including demonstrably affecting enrolment in schools. In line with this understanding the BJP has also frozen the education budget.
Govt seeking to place people’s savings at the disposal of private, including international, capital, will demobilise India's financial sector
The funds being made available for healthcare expenditure remain the same thereby reducing expenditure in real terms that will lead to a continuing collapse of the public health system.
Within the budget heads there are readjustments with the money for Ayushman Bharat being doubled from revised estimates of Rs 3,200 crore per year to Rs 6,400 crore per year confirming the BJP government's commitment to private insurance – private hospital method of health services delivery while completely ignoring governments obligations to primary healthcare.
The proposal to link private medical colleges with district hospitals in PPP mode is another attempt to create avenues for profits for private interests in health service delivery while starving public health institutes of funds.
Despite its claims of ‘ease of living’ nothing displays more that the BJP simply does not care about people than its lack of support for the old age pension. In the six years that the BJP has been in government it has not increased the outlay for pension under the National Social Assistance Programme.
As a result the real value of the monthly pension of Rs 200 per month when the BJP came to government has fallen to Rs 93 per month. We can be sure that there will be neither an increase in the pension amount nor in the reach or coverage.
There is a total Gap in allocation of Rs 1,22,998 crore under Scheduled Caste (SC) budget and Rs 57,606 crore under the Scheduled Tribe (ST) Budget. Out of the total Budget allocated for SCs only Rs 16,174 crore is targeted schemes (19%) and for STs it is Rs 19,428 crore (36%). This shows that most of the schemes are either notional allocation or general allocation.
Government expenditure on social security and social protection is necessary expenditure by a government to provide support to the most needy in society.
At a time of economic decline such expenditure is also critical in ensuring that peoples consumption levels are sustained and the money they spend on basic consumption feeds back into the economy in order to spur demand, wages, employment and output.
On the other hand, the government has embarked on some of the largest tax giveaways to corporates and the rich in our history.
The government now expects to meet its resource obligations through the disinvestment of the public sector banks and the Life Insurance Corporation (LIC). These repositories of people’s savings shall be placed at the disposal of private capital including international capital thus effectively demobilising the entire financial sector. With this the BJP government plans to also privatise Air India, Bharat Petroleum etc.
The country needs a budget that will address the needs of the people and increases the purchasing power of common people without which the economy will remain in doldrums.
We need an economic policy that addresses people’s needs: raises the minimum wage, raises the minimum support price and increases and expand expenditure on food security, employment guarantee, universal access to healthcare, universal high quality public education, an old age pension and a strong and robust public sector.
This alone will make it possible to achieve a stable, self-reliant and humane economy based on principles of equality and social justice.
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Click HERE for the list of participating organisations

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