Monday, March 16, 2015

P. Sainath: So Richie Rich? Have Another One On Us (Socialism for the rich, capitalism for the poor)

This year’s budget write-off in customs duty on gold, diamonds and jewellery (all aam aadmi items, of course) is Rs 75,592 crore. That’s well over twice the “record” amount allocated to the Mahatma Gandhi National Rural Employment Guarantee Scheme. As Prof Jayati Ghosh points out, the MNREGA has given billions of person-days of work to tens of millions of poor rural households this past decade. It  has been allocated Rs 34,699 crore. (You can find the gold figure in the Union Budget 2015-16. Just go to the annexure marked Statement of Revenue Foregone; This giveaway on gold and precious stones in fact accounts for fully a fourth of all customs duty exemptions. Overall, the budget for agriculture has fallen by more than Rs 5,000 crore compared to last year. The concessions on customs duty on gold, however, have gone up by more than five times that amount in the past 12 months.

Meanwhile, the feeding frenzy at the corporate trough has crossed the Rs 42 trillion mark this year (or US $678 billion, if you’re among those whose overseas stash the Narendra Modi government has pledged to bring back to our sacred shores). Yup, 42 trillion. As in 12 zeroes. Relief for the corporate needy (and other well-off hungry) rec­orded in this year’s budget comes to Rs 5,89,285.2 crore. Or Rs 5.49 lakh-crore ($88 billion roughly) if you skip personal income tax which benefits a relatively wider group of people. And the freebies adding up to that total are just  those under a mere three heads: corporate income tax, excise duty and customs duty. The Rs 5.49 lakh-crore figure brings the bills for the 10-year orgy to Rs 42.08 trillion. The public pays for the party. The guests enjoy anonymity.

Did I say 10-year orgy? It’s gone on much longer, actually. Just that the government started publishing revenue forgone data only from 2005-06. How much would  the total come to if we had the data for earlier years? Oh, well, never mind. This is big enough. Rs 5.49 lakh-crore is the biggest ever instalment in corporate karza maafi in all the years for which the numbers exist. It is also close to 140 per cent higher than the giveaways of 2005-06, the year we started getting this data (see Table 1).

This year’s write-offs, though, come in new clothes. Take, for instance, the corporate income tax handouts. Till the 2013-14 budget, the table listing these was called: major tax expenditures on corporate taxpayers. This year the budget has caught up with the semantics of the elite. It’s now called revenue impact of major incentives on corporate taxpayers (emphasis added). Oh, goody.  That makes it all fine then. These are incentives, not grabouts. Don’t crib.

Union finance minister Arun Jaitley told a gushing TV anchor last year that he “hoped” there would be no return to wasteful subsidies under the NDA government. He added that it depended on the situation as it unfolded. So here’s how it unfolded. Corporate income tax written off in the statement of revenue foregone of the last UPA budget was Rs 57,793 crore. In the first year of the Modi regime, it was Rs 62,399 crore—about eight per cent higher. It will likely be even higher since this year’s figure is still an “estimated” or provisional one...
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