'The UPA has abandoned the aam aadmi!'

Prakash Karat, general secretary of the Communist Party of India-Marxist, has called the Union Budget 2011-12 anti-common man.

In an exclusive interaction with Editorial Director Sheela Bhatt, Karat explains what is wrong with the Budget that Finance Minister Pranab Mukherjee presented in Parliament on Monday. Here's what the Left leader had to say . . .

This Budget has failed to address the serious problems faced by the people. This Budget has done nothing to control inflation.

For example, in last the Budget the government had increased customs duty and that had led to increase in fuel price. People are still carrying the burden of it.

Clearly, government has failed to take any anti-inflationary measures.

This time, at least, the government should have cut the customs and excise duty on petroleum products to spare people from facing the fuel price hike.

. . . 

Subsidies cut!

In fact, there are overall cuts in subsidies in the 2011 Budget, if compared to last year. Rs 20,000 crore subsidies cuts are there in fuel, fertilizers and food.

On the one hand, the government talks about providing food subsidy and through the Budget they have actually cut in food subsidy by Rs 27 crore (Rs 270 million). The government is supposed to cover more people under the new Plan. Surely, they are not going to do that.

Another disappointment is the government's lack of action over the issue of black money. Except for forming a Group of Ministers on corruption they are not doing much.

That is why I say that the Budget has completely failed to address urgent issues facing the nation.

. . . 

The spectre of divestment

Actually, the government's announcement of direct cash transfer will be directly targetted at people who are the Below Poverty Line.

But anyway they are a small part of poor people. It will not solve the problem of a large number of poor people. The government is targetting such a narrow group through direct cash transfer that it will not solve the problem.

We want to strengthen universal Public Distribution System. It is working well in Tamil Nadu and Kerala.

The government's divestment targets have been announced. We always believe that divestment is 'backdoor privatisation'. The privatisation creeps into the system.

. . . 

No one's tackling price rise

The government had announced that they want to bring down public sector units' share to 51 per cent. From 51 per cent to bring it down to minority shareholding will not be too difficult for them (the government).

The Prime Minister's Office had issued a statement earlier on tackling price rise. It had virtually said that to bring down retail prices they would like to invite foreign investment.

The government is all for foreign investment even in multi-brand category. We are strongly opposed to it, we will keep opposing it. We have no doubt that it will aggravate the unemployment situation.

I do not think government's intention to borrow less from the market will positively impact people because other measures do not match this intention.

. . . 

GDP growth? Who is benefiting?

The government has provided relief of Rs 11,500 crore (Rs 115 billion) in direct taxes, but through indirect taxes they will raise additional tax of Rs 11,300 crore (Rs 113 billion). They are just transferring from direct to indirect tax, which is, always, a burden on the people.

Then this Budget has their favourite financial reforms, like bringing in more capital in banking and insurance. To bring in more and more foreign capital in to the financial sector is the pet agenda of the Manmohan Singh-led United Progressive Alliance government. They will try to push it. They would even like to bring in legislation in this regard in Parliament.

On the balance, this government -- through this Budget -- is pursuing the same course.

They all the time keep talking about 9 per cent growth and refuse to see who is benefiting from this growth and how much.

. . . 

Rich-poor gap rising rapidly

Inequality is growing in India; more and more people are unhappy and upset about the concentration of wealth in a few hands. The UPA government's policy is leading to increase in inequality. All these defects are covered up in name of high GDP growth.

The aam admi plank has been given up by UPA government. Just look at the Budget figures! They have given corporate tax exemption of Rs 88,000 crore (Rs 880 billion) in 2010-2011.

And the tax-to-GDP ratio, which had reached almost 12 per cent in 2007-08, has declined since then to around 10 per cent in the current Budget.

In a situation of heightening inequality, tax concessions to corporate are unacceptable. Our (the Left) government in West Bengal is supportive of the Goods and Service Tax regime, but the Bharatiya Janata Party-ruled governments are opposing it.

. . . 

Don't read too much into market rise

The rise in the stock market index -- the Sensex -- should not be read much into. That could be because the government has allowed FIIs to invest in mutual funds.

People on the right-of-centre wanted more reforms through this Budget. Because of the assembly elections, the UPA could not go in for as much reform as they want to, but the direction of the Budget is reflective of the neo-liberal policy of UPA, we think.

We do not see any change in it. That is why I am saying the UPA has abandoned the aam aadmi.