Budget 2015 : A Step Towards Inequality
By Dr. Vivek Kumar Srivastava
01 March, 2015
Countercurrents.org
The first full budget of new government is out. Many may Interpret it as pro growth some may term it as middle path adopted by the government as focus on infrastructure as Rs. 70,000 crores have been allocated to Infrastructure sector. Along with this Tax-free bonds for projects in rail road and irrigation will be introduced with five ultra mega power projects (4000MW each) will be set up.
The budget has talked about these issues but it has also made two major announcements, first there will be implementation of seventh pay commission report for the central government employee. This will be received happily by the employees and they should do so but it is also likely that this measure will increase inequality among the government and private sector or self employed ones. The government employee should be given benefits of the pay commissions but equally true is that government should take measures to reduce inequality which is definitely to be increased after such decision. Sixth pay commission was highly responsible for the inflation and rising cost of living in big cities as Delhi. It was also responsible for the high increase of the property rates in metro to small cities. Within few years the property rates ballonet to three to six times.
Second relates to the abolition of Wealth Tax, with a reduction in rate of corporate tax to 25% over next four years. This announcement may have its own spiraling effects. There is always talks to reduce subsidy in the agricultural sector but benefits to corporate groups may outnumber the subsidy benefits to rural people. Farmers credit has been targeted at 8.5 lakh crore, a welcome step but focus should be on those who are trapped in debts and vicious cycle of poverty. These farmers always find hard to have credits. This needs to be targeted more than any thing else in rural sector. Budget is silent on this specific group of farmers.
The impact of excise duty and service taxes are manifold. Coaching institutes have become costlier. When school system for middle class is failed they seek support of coaching to get their ward admitted in IITs, IIMs, AIIMS etc. Kota is living example. Families with no government jobs are under stress. Moreover there is no change in tax slab. This will make middle class more burdened.
The social sector allocation is valued but these are mainly affected severely by the corruption. The percolation of benefits in terms of monetary units is not healthy in amount. Job creation has not taken place among the rural poor. The growth rate for employment generation among rural youths is meager. They leave their places and migrate to big cities. Jan Dhan Yojana like schemes are aimed for financial inclusion but it is also needed that people should have money to deposit in the banks.
The budget is policy statementand gives direction for future . The present budget has some good points but it is certain that inequality will breed. If government does not corrective measures this is bound to affect the social fabric of the country. Seventh pay commission and support to corporate houses in terms of financial benefits will act as catalyst.
Dr. Vivek Kumar Srivastava has twenty years University level teaching experience, presently Assistant Professor in CSJM Kanpur University[affiliated college],Vice Chairman CSSP, email: [email protected]
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