news from the cpi(m)
July 02, 2009
Press Statement
The Polit Bureau of the Communist Party of India (Marxist) has issued
the following statement:
On Economic Survey 2008-09
The Economic Survey tabled by the Finance Minister in Parliament today
suggests a policy direction, which is inimical to the national
interest.
The survey brings out the adverse impact of the global economic crisis.
It admits that the overall growth rate has fallen to 6.7 per cent in
2008-2009. In particular, the fall in agricultural growth rate by 3.3
per cent and that of manufacturing by 5.8 per cent is alarming. It also
admits that per capita consumption has seen a sharp decline from 6.9 per
cent in 2007-2008 to 1.4 percent in 2008-2009, reflecting a big squeeze
in the purchasing power of the people.
But what are the prescriptions? At a time when the world is reverting
back to various forms of regulation of the financial sector, the
Economic Survey suggests opening up of crucial sectors of the economy to
FDI and deregulation of the financial sector in the name of "revisiting
economic reforms". This includes FDI in insurance, banking, defence and
even in the sensitive retail trade sector, which will directly hit the
livelihood of crores of families. It also proposes to mobilize as much
as Rs. 25,000 crores per year from sale of PSU shares. In contrast the
Economic Survey fails to make any assessment, leave alone suggest
measures to address, the human dimensions of the economic slowdown such
as huge job losses, growing unemployment and declining incomes. Clearly
the economic policy establishment has failed to draw any lessons form
the global financial meltdown.
This becomes even more apparent when the Survey discusses such an
important issue as rising prices of essential commodities and food
security. It actually proposes a reduction in food subsidy for PDS
outlets and introduce the failed system of food coupons. It also
suggests further cuts in subsidies for gas cylinders suggesting it
should be limited to only six to eight cylinders per family per year.
On the other hand the Survey is generous in its suggestions to give
further tax concessions to corporates by doing away with several taxes
such as FBT, STT, CTT etc. Thus it wants to shift the focus of revenue
mobilization away from tax mobilization to selling off public sector
assets. At a time when countries across the world are moving away from
fiscal fundamentalism, a completely irrational proposal to introduce a
new version of the FRBM Act with a zero fiscal deficit target is also
contained in the survey.
Many of the proposals made in the survey, which are inimical to the
interests of the people and the country were part of the UPA reform
agenda for the last five years, which could be to a certain extent
prevented by the interventions of the Left Parties. Any attempt by the
UPA Government to revive the discredited neoliberal agenda of subsidy
cuts, financial liberalization, disinvestments and privatization would
be met with stiff resistance.
eom
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