Interim budget has no step to check impact of recession: Left

Calling the interim budget a "pre-poll declaration" by the Congress, Left parties said on Monday that the government had not taken any step to check the impact of the global recession on the Indian economy by increasing public expenditure.

While CPI(M) Politburo member Sitaram Yechury said the interim budget was nothing but a "perorative" (lengthy and pompous) document and government had in fact lowered the expenditure on major social structure schemes, CPI leaders Gurudas Dasgupta and D Raja called it a "lollipop" budget meant for the coming elections.

Comparing the 2008-09 budget allocations with this year's figures, Yechury said the funds earmarked for rural employment guarantee scheme declined by Rs 6,650 crore, food subsidy by Rs 1,328 crore, rural development by Rs 5,176 crore and Jawaharlal Nehru Urban Renewal Mission by Rs 1,735 crore.

Instead of increasing public expenditure in these and infrastructural sectors, the government has in fact slashed spending on them, which would not only lead to lower purchasing power of the commoners but further increase job losses, he said.

Raja said the budget "painted a rosy picture of the Indian economy and government's performance which was not at all true in terms of ground realities and non-fulfilment of promises made by the UPA in the Common Minimum Programme."

Maintaining that the government was still following the principles of "fiscal fundamentalism", Yechury said the allocation shown on various heads was actually earmarked in last year's budget and "what we are seeing is a contraction of government expenditure, whereas the only way to fight global recession was to increase it".

Observing that the coming year would experience a "further contraction" in public expenditure, he said capital plan expenditure had also declined by Rs 4,500 crore, which would lead to further lowering of economic activity.

He said the government's projection that fiscal deficit would rise by five per cent next year instead of six now, would be only due to the fact that it would spend less.

Giving an example of the civil aviation sector, he said even though jet fuel was now cheaper than petrol and diesel, air traffic was not improving as passengers do not have enough purchasing power to buy the tickets even though these are low.

Referring to the government's claim of higher foodgrain production and procurement, Yechury asked if this was true, why did it not increase the state allocation for foodgrains.

The CPI(M) leader said the public-private partnership model has failed as, in the aviation sector, the private airport owners were now being allowed to levy additional charges on passengers to cover their expenses.

In a statement, the CPI(M) Politburo said "the claim of being the second fastest growing economy in the world will not provide any relief to the millions of workers in sectors like textiles and garments, gems and jewellery, leather, construction among others who are losing their jobs.

"Farmers of crops like cotton, rubber, coffee are also facing sharp price falls," it said, adding that the revised estimates of 2008-09 has "further exposed the inadequate response of the UPA government to severe the impact of global recession on the Indian economy".

Maintaining that the "alarming Rs 60,000 crore shortfall in tax revenue collection in 2008-09 is a direct impact of the economic slowdown", the CPI(M) said this huge revenue shortfall would adversely affect public expenditure and constrain the spending plans of the next government.

It said the claims of overflowing granaries and record food production "sounds vacuous in the light of steep cut of 73 per cent in the allocation of foodgrains to states under the APL category."