Monday, March 8, 2010

Budget spells double trouble

Gulf Today

For the people of Kerala, the central budget presented on Feb.26 spelt double trouble. The Communist Party of India-Marxist (CPI-M), whose members walked out of the Lok Sabha when Finance Minister Pranab Mukherjee announced a hike in petrol and diesel prices in the budget speech, followed it up with a hartal last Tuesday.

More trouble is on the way with the party planning to organise blockade of central government offices even in some small towns to focus attention on the price rise.

There was no work stoppage in the other CPI-M strongholds of West Bengal and Tripura. Nor will there be blockades in those states. This is because the agitations are organised by the party's state committee, and are not part of any national campaign.

Evidently the CPI-M wants to keep the pot boiling in the state with an eye to the panchayats elections due later this year and the Assembly elections due next year.

Meanwhile, the CPI-M-led state government is making its own contribution to the rise in living costs. Ahead of the state budget, it raised bus charges and taxi rates. The rate revision was unrelated to the latest petrol price hike. In fact, transport operators had been demanding rate revision for some time.

After presenting his budget in the Assembly on Friday, State Finance Minister TM Thomas Isaac said he had adopted a different approach from the central minister. Patting himself on the back, he claimed he had placed before the country a model which other states could follow.

There are no doubt differences in the approaches of the two ministers. But, then, there are also similarities in their approaches.

Reactions of the political parties to the two budgets were along predictable lines. The Congress and its allies hailed the central budget and criticised the state budget. The CPI-M and its allies denounced the central budget and praised the state budget.

While the Bharatiya Janata Party criticised the two budgets, most non-partisan analysts characterised both as populist.

One of the areas where differences are discernible in the approaches of the central and state governments relates to the public distribution system, which, in theory, covers the entire population of Kerala.

Pranab Mukherjee said in his speech that the centre would like to switch from the rationing system to a coupon system, which will allow poor people to buy their requirements of food grains at subsidised rates from any outlet.

The state government is keen to retain the public distribution system, although very few persons other than those holding below-poverty-line cards actually buy grains from ration shops now. It is well known that the ration shops divert the unsold supplies to rice mills.

The centre and the state are involved in a dispute over the number of people who are below the poverty line. While the centre puts the number at less than 1 million, the state reckons it is more than 2.5 million. The finding of a BPL survey conducted by the state government is awaited.

Thomas Isaac announced plans to supply rice at the subsidised rate of Rs2 a kilogramme to all labourers. The proposal is expected to benefit 3.5 million people.

Another area where the centre and the state differ relates to the public sector. The centre has been divesting the shares of public sector companies year after year to raise money. The state government, which claims to have turned round most of the losing public sector units, has decided to float a few new ones in the coming year.

Selective distribution of largesse is an area where the approaches of the two governments are similar. While the centre earned the gratitude of the middle class by lowering income tax rates the state sought to please the working class by offering a small rise in the paltry pensions besides extending the subsidised rice to all labourers.

The rich have reasons to be pleased with both the central and state governments. Both have showered concessions on the real estate sector. If industrialists are the major beneficiaries of central budget, traders are the major beneficiaries of the state budget.

Thomas Isaac has demanded only a nominal increase in the compounded tax paid by jewellers for the last few years. Those who evaded registration charges have been given more time to get themselves off the hook by making a small one-time payment.--Gulf Today, Sharjah, March 8, 2010.


Sooraj Nhaloor said...
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Sooraj Nhaloor said...

This kind of an observation is not at all surprising and falls clearly inline with what we can expect from the so called ' non- partisan' media.Putting the two budget seems to be rational in its periphery but is, clearly, an attempt to hold things upside down.While there is a clear attempt to cut short the contribution to the states, the absolute increment, which is reflected in this year's Union budget, is caused by the the increase in the improved realization of revenue receipts.Even then the Union budget reflects the same age old stand by bringing down the percentage allocation of funds to the states.This is not a state of affairs to Kerala alone but is shared with many other states.If it is to take a transparent and honest approach in this regard, the approach should be rational(in practice not just in words).While talking about the PDS system prevailing it is not to be forgotten, the successful days till the early years of 1990s, just before the actual reflections of 'Rao-Manmohan' model of economic reforms which set in the neo-liberal political agenda into eonomics.The growing discontent among the affluent class towards the welfare measures of the government is very well reflected with one of your early articles in this blog itself 'When governance reduce to Charity'.To be a Communist or Congress is a second question(not secondary) with the first is with whom this government tries to associate with.This is, of course, is political question and the people below the affluent class including the daily wage earners, the salaried, and others are matured enough to register their opinion while casting their vote during elections.To listen to Dr. Ambedkar in this regard, to keep the words, while delivering its duties, the government cannot be held responsible before any court for its non-fulfillment or failure but they can be held before the public while going for a mandate seeking for another term.The purpose, to me, is to identify the common, the down-trodden, the needy and not to get myself associated with any affluent class and being influenced by the money they keep in their pocket.