Union Budget 2023-24 Contractionary, Will Aggravate Economic Crisis: CPI-M

New Delhi: The CPI(M) on Wednesday said the Union budget presented by Finance Minister Nirmala Sitharaman for 2023-24 was "contractionary" and "anti-people".

In a statement, the Left party said the budget came at a time when the Indian economy had already slowed down before the COVID-19 pandemic struck, worsened during the two pandemic years and the post-pandemic recovery was adversely impacted by the global economic slowdown moving towards a possible recession.

"Under these circumstances, this budget should have addressed the central issues of increasing people's purchasing power with job generation and boosting the growth of domestic demand. This budget fails to meet this situation. On the contrary, it squeezes the government expenditures to reduce the fiscal deficit while giving further tax concession to the rich," the Communist Party of India (Marxist) alleged.

It said the budget comes at a time when the Oxfam report has shown that the richest 1% of the population in India has cornered 40.5% of the wealth generated in the last two years. Thus, it is a contractionary budget that will only aggravate the economic crisis, it claimed.

The party further said the increase in the total government expenditure for 2023-24 over the revised estimates for 2022-23 is a mere 7%, when the hike in the nominal GDP (with inflation) over the same period is estimated to be 10.5%.

"Thus, as a percentage of GDP, there is a reduction in government expenditure. If interest payments are excluded, then this expenditure is only 5.4 per cent more than last year. Once the implicit inflation rate of 4 per cent and increase in population of around 1 per cent are accounted for, this so called 'people-centric' budget only mounts further attacks on the livelihoods of the vast majority of our population," it said.

The Left party observed that when the unemployment rate is at a historic high, the budget has reduced the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by 33%.

It further pointed out that food subsidy has been cut by Rs 90,000 crore, fertiliser subsidy by Rs 50,000 crore and petroleum subsidy by Rs 6,900 crore.

"Despite the devastation caused by the pandemic, Rs 9,255 crore of the last year's allocation for health remained unspent. Likewise, Rs 4,297 crore remained unspent in the education budget," the CPI(M) said.

The statement also highlighted that no hike was announced in the budget in the measly remuneration of the Integrated Child Development Services (ICDS) scheme workers.

It also alleged that the gender budget is only 9% of the total expenditure.

The SC (Scheduled Caste) budget is only 3.5% against a population of 16% and the ST (Scheduled Tribe) budget is 2.7 per cent against a population of 8.6 per cent, the party said, adding that the "hollowness of bombastic claims" of doubling farmers' incomes is seen in the reduction in the Prime Minister Kisan Fund allocation from Rs 68,000 crore to Rs 60,000 crore.

It also said the government's claims of a substantial increase in capital expenditures that will lead to employment generation are "specious".

The revised estimates for 2022-2023 show that the total capital expenditures, including resources of public enterprises, increased by a mere 9.6%, well below the 15.4% increase in the nominal GDP.

"The tax exemption limit has been raised from Rs 5 to 7 lakh, providing some relief to the salaried sections. However, this will be more than offset by inflation and cuts in social sector expenditure, making people spend more on essential services, including health and education," the Left party said.

Hitting out at the BJP-led government, it said the budget continues to impose further attacks on fiscal federalism by "squeezing" resource transfers to the states.

The revised estimates for 2022-23 show that these transfers were identical to what was transferred in 2021-22, despite an 8.4% inflation rate in 2022-23. Further conditionalities have been imposed on state governments for accessing loans, the CPI(M) noted.

It said in order to provide a much-required relief to people and boost domestic demand, leading to an economic turnaround, the budget should have substantially increased public investments in job-creating projects.

For this, the party suggested a vast increase in the MGNREGS allocation, with a higher wage, restoration of the distribution of five kg of subsidised foodgrains along with free distribution of five kg of foodgrains, imposition of a wealth and inheritance tax and withdrawal of the Goods and Services Tax (GST) on food and essential commodities, including medicines.