DR. T. SUMATHY (A) THAMIZHACHI THANGAPANDIAN (CHENNAI SOUTH):
“The difference between despair
And fear, is like the one
Between the instant of a wreck,
And when the wreck has been.”
These lines are taken from Emily Dickinson’s collection of poems. She
begins with the feeling of despair and compares it to a shipwreck; the panic
that concentrates the mind as the ship goes down. Unfortunately, something
more dire awaits us. We give priority to the wreck initially; a premature moral
judgement. What follows when the ship completely goes down is the utter
sense of loss, one that is more long- lasting and pertinent.
The same can be understood to be India unfortunately, a ship we can
see slowly sinking in front of our eyes. Year after year, we return to this
envisioned ‘Temple of Democracy’ in the months of January and February for
the past three years. Hoping that for once, this one set of documents, the
Budget, we as Indians look forward to every year will be truly representative of
us. We face dejection every year and this time around has been no disparate.
But similar to Emily Dickinson’s lines, what we face today is despair and
dejection. If this continues, what we will eventually arrive at is the situation of
the ship going down completely. The government will have taken this nation so
far down the line of ruin; what we will have is a feeling of complete loss.
The Hon’ble Finance Minister, Thirumati Nirmala Sitharaman had said
that the seven focal areas of the India Budget this financial year are: green
growth, youth power, inclusive development, reaching the last mile,
infrastructure and investment, unleashing the potential and launch of digital
platforms. But I beg to differ here. The budget does focus on seven areas but
in my opinion, they are; slashing out on federalism, promotion of
disinvestments, indifference to those on the margins, disregard for the middleclass, differential treatment for states, promotion of inequality and unequal
growth. It comes as a surprise, in fact it is commendable, the conviction of the
Union government, that too in the year preceding the elections, thinking that
with the utter neglect it has given to the economy, the states, the people and
their sufferings what the nation really wants; that the general elections next
year can be fought and won.
According to the Economic Survey, the government is either unaware of
or in denial about the material circumstances of the great majority of Indians.
Keep in mind that overall employment rates are at historically low levels, that
formal employment is declining, that job losses are affecting even the most
“dynamic” industries like IT, that median money wages are lower than they
were two years ago, that official surveys find horrifying nutrition indicators, and
that micro surveys show evidence of an increase in the prevalence of absolute
hunger. All we see is hand-picked data that reinforces just one dictum: that all
that is well in this country has only happened after the year 2014.
Government capital expenditures have so far had less favourable effects
on either overall macro-growth or the availability of private investment
opportunities. Then, one must address the finance minister with the more
significant (unasked) query. The Modi administration has been in power for
nine years. How has India’s private investment development failed to take up in
a sustained way when Modi was perceived as a pro-investment, pro-corporate
prime minister who won the election with one of the strongest political
mandates since the middle of the 1980s? Despite all fiscal incentives, including
corporate tax cuts, Make in India, PLI, and successive increases in increased
government expenditure for encouraging a private crowding, practically none
have had a significant impact on improving private investment across
industries (leaving the Adani Group aside of course).
The overall debt increased to 155.31 lakh crore in 2022, 2.77 times what
it was in 2014. Each resident owed 43, 124, but in the last nine years, this
amount has climbed to 1,09,373. It has been agreed to incur additional debt for
the current fiscal year totalling $12,31 lakh crore at an interest cost of $1,
39,320 crore. This is the cause of the Union government’s inability to reserve
funds for crucial Ministries.
The effective tax rate will decrease from 42.7% to 39% as a result of the
finance minister’s announcement that the surcharge on the super-rich (those
making Rs 5 crore or more annually) will be cut. This may have been done in
an effort to swiftly persuade the super-rich to switch to the new tax system, but
it begs the question: Why has the Modi government continued to favour the
“pro-corporate super-rich” in terms of tax policy?
The budget also does not extend a helping hand to the construction
sector, and the welfare of 93 percent of unorganised workers, including
construction workers, and migrant workers has been neglected.
The Government has already scrapped the Maulana Azad national
Fellowship for minority students. The ambit of the Pre-Matric Scholarship for
Minority School Students has also been limited to standard 9th and from 1 st to
10th earlier. The Union government gave zero thought to how adversely would
these moves affect students from social and religious minorities. And the
present budget goes absolutely mute on how it aims to ensure that the
students covered under these schemes continue their education and receive
opportunities.
As usual, the budget also does the continuous job of disappointing us
about job creation. The finance minister refused to mention or acknowledge
the job creation crisis tearing across sectors across India, just like what she
has done in the last four to five budget speeches. As in previous years, only
token announcements had a significant impact on securing young people
secure, respectable jobs. We may be facing the biggest “brain drain” of
educated, young Indian hopefuls abroad than has ever been observed if the
government’s endeavour to achieve upward social and economic mobility
among the youth is centred primarily on creating skill centres for foreign
outreach. Both previous and current budgets have avoided allocating funds for
the purpose of generating targeted job growth across industries. With the
current budget as well, it appears that the current government’s own “failed”
supply-side interventions will continue up until the 2024 Lok Sabha Elections.
These interventions have “no gain” in creating good employment opportunities
for young people or in stimulating private investment opportunities (despite all
the carrots provided).
The housing-for-all Pradhan Mantri Awas Yojana (PMAY), was launched
in 2015 as one of the star welfare projects of the Narendra Modi government.
For the construction of eight million dwellings in rural and urban regions for
qualified recipients in 2022—2023, 480 billion rupees ($59 billion; E47 billion)
were allotted in the previous budget. The Union government was contacted in
August of last year with a request for an extension of the deadline and further
financial support after the ministry of housing and urban affairs, which is in
charge of the urban portion of the programme, claimed it was behind schedule.
Data is available for the current fiscal year from I April 2022 through 23
January 2023. This demonstrates that while 2.6 million dwellings were
constructed as part of the rural component of the programme, 1.2 million
residences were finished in urban areas. The government is currently 4.2
million homes shy of its overall goal, according to this statistic. According to
data from the ministry of water resources, so far only around 17 million
households have been given piped water connections this year. That’s slightly
short of 50% of the target. I could go on and on and mind it, that the list would
take considerable time to end but you’ll notice a similar pattern. The
government is falling short of its promises and lagging behind on welfare
schemes particularly. And all of this when it does not think twice before
criticising previous Union Governments and saying that their contribution to
India has been anything but impressive.
Our Chief Minister Thalapathy M.K. Stalin was indeed correct in stating
that the budget was nothing but a huge disappointment to Tamil Nadu and its
marginalised sections of society and that there was no effort taken in the
budget to provide financial independence to the states.
In light of the current state of the economy, rising commodity prices, and
supply chain disruptions, the Tamil Nadu Chamber has asked the MSME
Ministry for a long-term sustainable model to support the sector’s growth in the
next Union Budget of 2023—2024. According to data from the Annual MSME
Report 2021-2022, which was included in the Tamil Nadu Chamber’s press
release, there are 63 million MSMEs worldwide that employ over 110 million
people and account for 30% of the GDP and almost 50% of exports. Rs 9,000
crore for the micro, small and medium enterprises was very meagre as the
MSME sector was the backbone of the country’s economy and also on selfreliance.
Due to unsustainable demands on their working capital and price
mismatches between the negotiated price of supply to the buyer and the cost
of production, a significant number of spinning, weaving, and garment units are
in danger of closing. As a result, the garment industry is experiencing
enormous losses, and many MSME businesses have already stopped
operating. This has led to significant job losses in a sector that often creates
jobs. Stock declarations could’ve been made mandatory, import duties on
cotton for contracts entered before 30th November 2022 could’ve been waived
off, cash credit limits could’ve been established, money margins sought by
banks could’ve been reduced but what was done? Nothing!
The budget has deviated from the concept of it catering to all states by
rejecting the proposal of states like TN, which sought an extension of GST
compensation period by another two years, and allocating funds and schemes
targeting election bound states. It is like butter in one eye and lime in the other.
The people who run this government are known for their divisive tactics and
this is the proof.
Since the states would not realise the full benefits of capital loans owing
to umpteen conditions imposed in availing them, the Hon’ble Chief Minister of
Tamil Nadu had suggested that the scheme must facilitate states to avail
capital loans to develop infrastructure as per their requirement, including
replacement of old buses with new ones to encourage public transport.
Given this, the numbers provided in Budget 2023-24 are startling to say
the least. We have not experienced such a savage cutback of essential social
spending in a very long time, and certainly not in the last two decades. In a
period of falling employment and lower real wages especially for the rural poor,
the allocation for the MNREGA has been cut by around one-third from the
likely spending in the current year, to only Rs 60,000 crore. Is it because the
scheme has the name of the Father of our country, Mahatma Gandhi? I don’t
understand why this government is so mean-minded. The group People’s
Action for Employment Guarantee has estimated that the allocation for the
coming year should be at least Rs 2, 72,000 crore if the promise of 100 days’
work is to be met even for those who worked on the programme in the current
year — this would be only around one-fifth of that.
The massive cut in the allocation for the food subsidy by nearly one-third
is similarly striking given all the evidence on undernutrition and absolute
hunger. The increase in allocation for the National Health Mission will not keep
pace with inflation, implying a cut in real terms and an even bigger cut in terms
of per capita spending. The much-celebrated public health insurance scheme
PM Swasthya Suraksha Yojana was allocated Rs 10,000 crore in the current
year but will apparently manage to spend only Rs 8,270 crore. For the coming
year, the allocation is only Rs 3,365 crore!
Unlike most countries in the world that significantly increased public
spending on schooling to allow for students to deal with learning losses during
the pandemic, the Indian government did not do so. Instead, even the budget
estimate of Rs 63,449 crore for 2022-23 is not expected to be met, with a
shortfall of Rs 4,396 crore. And the budget outlay for the coming year is only
Rs 5,356 crore more, once again just about keeping the pace with expected
inflation. The higher education outlay is slated to increase by a pathetic Rs
3,267 crore, suggesting no real expansion. The union
Government’s tall claim that it will increase GER to 50% by 2030 would
remain elusive and cannot be achieved without adequate fund allocation. The
finance minister spent what seemed like an aeon talking about agriculture —
but the total budgetary outlay for agriculture is down, as is that for rural
development. Some of the reductions are striking: the Market Intervention
Scheme that is supposed to provide price support for farmers when market
prices fall below a certain minimum level was announced with much fanfare a
few years ago. But the allocation for that scheme has fallen from Rs 1,500
crore to only Rs I lakh! (You read that right — it’s not a typo.) The finance
minister announced that the PM-KISAN payments would increase from Rs
6,000 per farmer to Rs 8,000 per farmer in what is clearly one of the few
preelection sops — but that is not reflected in the expenditure budget, where
the amount allocated is the same as the previous year, Rs 60,000 crore. This
means they will have reduced number of beneficiaries under this scheme.
Lending support to oil companies termed as “capital expenditure to fund
the green transition”! May be the Hon’ble Finance Minister would have thought
that the corporate oil companies are too poor to support the Government’s
initiative. One of the biggest lies is in the declaration that state governments
are being provided hugely increased funds to finance their capital expenditure.
In reality, the total transfers to the states are projected to come down. In 2021-
22, such transfers amounted to Rs 4,60,575 crore, but they were reduced to
Rs 3,67,204 crore in Budget 2022-23, and the Revised Estimates suggest only
Rs 3,07,204 crore will be transferred in the current fiscal year. The Budget
2023-24 provision is for Rs 3,59,470 crore.
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Meanwhile the states’ share of tax revenues has come down to only
30.4% in the upcoming Budget, down from 33.2% in 2021-22, and a very far
cry from the 42% share promised by the 14th Finance Commission.
Clearly, this Government is either not interested in genuine
macroeconomic revival or persists in the foolish belief that just announcing big
capital spending plans can cause people to overlook the actual realities.
The National Rural Employment Guarantee Scheme (MGNREGA) has
seen its budget decline to Rs 60,000 crore as against Rs 89,400 crore in the
revised estimates for 2022-23. Even though MGNREGA wages are only twothirds of the private market wages, the high demand for work under the
scheme is ample proof of the crisis of jobs and earnings in rural areas. This is
the lowest amount allocated in the last five years compared to actual
expenditure on the scheme. With spiralling inflation and even the cushion of
free food grains having been withdrawn, rural areas are likely to face an
uncertain situation.
With the distress in the rural economy spilling over to urban areas and in
particular the urban middle class, there were expectations that at least the
latter will benefit from the budget. Not surprisingly, the only thing they got was
a carrot to shift to the new tax regime, which has failed to take off even after
two years of implementation. On the other hand, there was something tangible
for the super-rich with a reduction in tax rates. The impact of these is unlikely
to spur demand from the middle class, much less from the super-rich.
None of this is surprising given the government’s preference for supplyside interventions even when there is excess capacity in a demandconstrained economy. It is this understanding that is reflected in an almost
one-third increase in allocation for investment. A bulk of this is in railways and
roads a much-needed boost to the infrastructure sector. But given the small
share of public investment, it is unlikely to be sufficient unless it is
accompanied by the private sector increasing its investment. The track record
in this regard has, unfortunately, not been very good with the private sector
neither responding to rising public investment nor tax subsidies, as were given
in 2019. This will have a negligible impact on employment and domestic
demand given the low employment elasticity of these investments. Regardless,
the increase in investments is welcome. But if this has been achieved at the
cost of sacrificing demand, can it revive the economy?
In the last 5 years, the Government has constructed 567 Multipurpose
Cyclone Centres under the National Cyclone Risk Mitigation Strategy in
Odisha, Andhra, Gujarat and West Bengal, but not a single MCC was
constructed in Tamil Nadu, which has been ravaged frequently in the last 5
years than any other State in the Country. The condition remains the same
with the current budget as well!
Medicinal plants from Tamil Nadu are the true backbones of a wide
range of local health traditions, in addition to the codified medical systems
such as Ayurveda, Siddha, Unani and Homeopathy. Several medicinal plant
species constitute many classical drug formulations and hundreds of home
remedies. The people of Tamil Nadu’s rural areas depend on medicinal plants
for their livelihood and health security in addition to serving as a significant
supply of raw materials for the traditional medicine and herbal business.
Additionally, there is a chance to make money by promoting these priceless,
uncommon plants both domestically and internationally. While Tamil Nadu can
be the perfect option for setting up an Integrated Medical Plant Conservation
Park, do we see talks about the same despite the apparent thrust the current
government places on AYUSH? Absolutely not.
The Virudhunagar District’s Sivakasi Taluk boasts over 1000 firecracker
companies and a thriving printing industry, both of which are presently
suffering as a result of the ban on fireworks and the highest GST rates of 28%.
What efforts has the government taken to safeguard the welfare of the 6 lakh
workers involved in the business, despite being aware of this number?
As a significant corporation, Hosur is home to thousands of SMEs and
MSMEs, hundreds of industrial houses, and the oldest and biggest SIPCOT in
Tamil Nadu. People from all walks of life commute to and from this location, but
Hosur is still out of the way of the metro rail services that could make it easier
and more convenient for thousands of people to travel.
The strategic sale of the Integrated Salem Steel Plant in Tamil Nadu’s
Salem district to a private corporate business has received preliminary
approval from the Union Government. The Union government has made an
effort to conceal the overall losses of Maharashtra company SAIL, which are
the result of blatant mismanagement and increasing administrative costs that
are not essential. They aim that the factory is a loss-making unit of SAIL. The
administration must establish appropriate accountability for the situation and
stop making such hasty judgments.
The Sethusamudram Channel Project is crucial for boosting Tamil
Nadu’s and India’s economic growth. Atal Bihari Vajpayee, the prime minister
during the time of the National Democratic Alliance government, approved the
project’s feasibility assessment. The project’s alignment was completed at that
point. Due to the persistent efforts of our erratic leader Dr. This project was
subsequently approved during the United Progressive Alliance government led
by Congress in 2004 and opened on July 2, 2005. However, a roadblock was
made while this project was being worked on, causing it to be put on hold. The
development and growth of Tamil Nadu will be hampered by the Project’s
ongoing execution delays. If this project is carried out, the Indian economy will
improve, especially in Tamil Nadu’s southern districts, and many job
possibilities for the country’s educated and competent youth population will be
made available. However, we still do not find any mentions of the Project by
the Union government
Chennai has a water shortage as a result of its constantly growing
population. The Ministry of Urban Development benchmark of 135 Ipcpd (litre
per person per day), which is lower than the household water supply,
according to the 2011 Census, could not stop urban and industrial growth or
real estate growth in Chennai, a megacity. It is crucial to manage and protect
the available water resources because Chennai’s urban population is expected
to grow over the coming years. Additionally, adequate water resource
augmentation should be done for every square kilometre of urban growth.
Even though the high time arrived a long time ago, a comprehensive solution
to our water woes supported by the Ministry is still a distant dream for Chennai.
It is pure actions, determination and commitment to the nation and not
great oratory skills, acts of self-appreciation or the apparent power to
communicate well that is going to propel the nation towards true prosperity. If
the current Union government actually wants people to repose their faith in
them, it needs to act up. It needs to brace up and realise the responsibility of
running a nation like ours. It needs to accept the diversity this nation brings
and at least attempt to cater to the needs of the many diverse sections of this
society for starters, be it economic, social, religious, lingual or cultural!
This was the last full budget in which government could undertake
serious steps to revive the economy. That required prioritising allocations
towards reviving consumption demand, spurring private investment and
protecting people from the vulnerabilities of high inflation and a slowing
economy. The budget does none of this.
This budget is different from others in the last three years. It was bad in
202122, worse in 2022-23 and worst in 2023-24. There is no vision to create
jobs for fast growing unemployed youth population. No plans to tackle
escalating price rise and inflation. No intent to stem inequality. The union
ministers seem to have borrowed the term “Amrit Kaal” from the Hon’ble Prime
Minister and the Government has termed this budget as Amrit Kaal budget, but
in reality, the budget is a bad budget for the poor and middle-class agrarians
and dangerous for the large unemployed youth population. This Budget has No
Vision, No Mission full of lies and Illusion. Hope this would be the last full
budget of the Government run by the whims and fancies of few oligarchs.
Thank You.
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