Inequality, Jobs, Hunger: Why You Should Care About the Union Budget

This budget is the last chance for course correction for the Modi regime. It is going to be a test of who the government sides with, the 90% citizens of the country or the top 1%.

In an ideal scenario, the resources of a nation should be distributed equally among all its citizens, ensuring that everyone has fair access and opportunities. However, the current regime’s corporate-friendly agenda makes it increasingly difficult for the middle class and the poor to stake claim to the public resources. This budget is the final opportunity to set the policies and the politics right. Because after this, the already high inequality would spiral to such an extent, that it would be impossible to think about a pro-people state, without substantially cutting down on the billionaires’ wealth.

Today, unemployment is spreading like a pandemic; the unemployment rate in the country is 9.2%, and its percentage is even higher among the youth. Eight out of every ten young people are unemployed. You couldn’t miss the huge crowds of unemployed youth making news because they turn up in huge numbers for a vacancy of 10 people.

On one hand we are talking about demographic dividend, the idea that if the population is young then there will be some benefit in economic growth. But on the other hand, instead of giving jobs to them, posts are lying vacant in railways and many public sector companies. Even if recruitment exams take place, the rampant paper leaks keep the jobs away from the aspirants.

The BJP government had promised to create two crore new jobs annually if they came to power in 2014. By March 2024, this would have amounted to 20 crore new jobs. Instead, vacancies have disappeared in the public sector! Employment in Central Public Sector Enterprises (CPSEs) has decreased, with a reduction from 17.3 lakh employees in March 2013 to 14.6 lakh in March 2022, marking a loss of about 2.7 lakh jobs over the decade under Modi’s administration. The overall decline in employment opportunities is stark, with vacancies through the Staff Selection Commission plummeting from 80,650 in 2014 to 36,348 in 2023 and this list goes on.

The recent Lok Sabha elections have also shown that employment remains the topmost concern in the country. The government needs some serious overhauling of the public sector and it should create and fill vacancies sooner than later.

The double whammy of GST and indirect taxes

The poor are suffering the brunt of GST and other indirect taxes more than the rich. WhatsApp propaganda may say that the poor do not pay taxes. Only two crore people, which is 2.2% of the country’s population, pay taxes. But in reality, huge tax is being collected from the poor on everything. From the 5% GST on flour, pulses and rice that you buy, to taxes such as road tax, toll tax, service tax, and the taxes on petrol and diesel are taken out of everyone’s pocket.

Corporate tax has been waived off but every small shop owner has to pay GST. Statistics show how demonetisation, GST and Covid lockdowns caused a loss of Rs 11.3 lakh crore to the unorganised sector, along with the loss of 1.6 crore jobs. At the same time, the government is earning so much money from the collection of GST that it has stopped telling how much GST has been collected from this month. The GST collected last month was a staggering 1.74 lakh crore, the highest GST collected this year. This is the same money you have been paying on everything!

It is obvious that if we want to bring more money into the economy and increase demand, then the tax burden on the poor and the middle class will have to be reduced.

Whenever it comes to the performance of this government, its infrastructure work is hailed as the biggest achievement. The onset of monsoon has shown how flimsy this claim is, with airports and bridges collapsing and roads being washed away. Earlier there was a danger of the plane falling, now the roof of an airport can also fall. Railway accidents are happening frequently. But the situation of the people is only meme-worthy, with no actual accountability mechanism in sight. In the last 10 years, Rs 44 trillion has been spent on infrastructure, a lot of money will be spent in this budget too, but the government’s bet on infrastructure has failed. Despite investing so much money, neither jobs are being created in this sector nor the infrastructure built under it is standing the test of time.

There is another sector which has the potential to create jobs and also make the country self-reliant but which is facing a terrible blow after COVID-19 – our small and medium enterprises. More than 90% of the country’s workforce is employed informally. This sector provides employment to more than 90% unorganized workers while 45% of last year’s total exports came from this sector. The MSME sector also demands that the GST system should be fixed and credit facilities should be easily available.

Also, instead of selling away public sector enterprises, investment should be made in them. A study found that every rupee invested in railways generates Rs 5. To increase economic activity, investment in railways and its safety is very important. As we have seen, the private sector will come to buy public assets at throwaway prices but will never come forward to invest money in building the country’s infrastructure.

Today we are at 111th position in the hunger index. And our leaders are calling even the little relief given to the poor as revadi (freebies). But we need such relief. There is a need to increase the budget of MGNREGS and implement a similar scheme in urban areas too. There is a need to listen to the voices of farmers and strictly implement MSP on the ground and not just on paper.

Hope this budget exercise yields to the demands of the 90% of the country.

This article was originally published in The Wire and can be read here.

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