Budget 2021-22 disappointing: Farmers' Unions

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Peasant organisations criticised the Union Budget 2021-22 on February 1, 2021, for completely disregarding the suffering and demands of the people and implying more by what was not mentioned in the Finance Minister’s speech.

The All India Kisan Sabha (AIKS) said the Budget offered nothing new for the agriculture sector. It decreased the budgeted allocation from Rs 1,34,349 crore in 2020-21 to Rs 1,22,961 crore in 2021-22. This means there was an overall reduction of 8 percent in allocations towards agriculture.

“The government appears to be following a strategy of squeezing the peasantry. There are no major additional allocations in agriculture or major new schemes. The coronavirus lockdown period had seen the Indian peasant show stellar commitment to the maintenance of food security in the country. The government, however, has paid them nothing in return,” said AIKS General Secretary Hannan Mollah.

Regarding the government’s boasting of rice and wheat procurement in the last two financial years, the farmers organisation said the government had to procure more grain due to low open market prices. Nonetheless, the procurement levels were much less than requirement levels and many farmers sold their produce at low prices.

“The spending for most schemes in agriculture declined in 2020-21, and shows no promise of rise in 2021-22. For instance, in the Pradhan Mantri Krishi Sinchai Yojana, the actual expenditure in 2019-20 was Rs. 2,700 crore and the budgeted expenditure for 2020-21 was Rs 4,000 crore. But the actual expenditure in 2020-21 was Rs 2,563 crore, which is lower than the actual expenditure in 2019-20,” said the AIKS in a press release.

It also condemned the claims of the central government that current Minimum Support Prices (MSP) are already 50 percent above the cost of production. Mollah said that the government considers the A2+FL cost as the cost of production and not the C2 cost as suggested by the Swaminathan Commission. Meanwhile, a majority of farmers are still outside the procurement network, and are denied access to MSPs. However, the government announced no plan on how to expand the access of farmers to procurement or MSP. In fact, its medium-term plan is to reduce procurement, which is visible through its insistence on implementing the three Farm Acts, said the AIKS.

Farmers also raised concerns about the government’s failure to pay its dues to the Food Corporation of India (FCI) over the last few years, instead forcing the FCI to borrow high-interest loans from the NSSF.

“It is welcome that the budget has announced its intent of not burdening the FCI with loans, but it has remained silent on the past dues to be paid to the FCI. Unless these dues are paid, the financial viability of the FCI will remain stressed. It also remains to be seen whether the government would meet this obligation to the FCI in 2021-22,” said the AIKS.

Moreover, the privatisation of public infrastructure such as NAFED warehouses is a part of pre-existing agreements between the FCI and Adani Logistics for building and managing silos, said farmer leaders.

Further, the Union government announced extension of the ‘Operation Greens’ scheme provides credit subsidy to promote agri-logistics to 22 perishable commodities. It is presently controlled by large agro-based companies.

However, the AIKS dismissed the budget speech’s emphasis on infrastructure development considering the actual allocations for schemes such as Pradhan Mantri Gram Sadak Yojana or the Pradhan Mantri Awas Yojana in rural areas have been stagnant for about two years. There are no allocation revisions in this regard.

Mollah also pointed out that the Budget maintains a dead silence on land acquisition and compensation while focusing on large scale infrastructure projects through private partnerships.

“Large scale land acquisition of farm lands would be required for the highway projects announced,” he said.

Similarly, the budget also gave a raw deal to livestock farmers. The actual spending for the Department of Animal Husbandry and Dairying fell from Rs. 2,706 crore in 2019-20 to Rs. 2,630 crore in 2020-21. The budgeted allocation for 2021-22 is Rs 3,057 crore, which is hardly a rise in real terms, said the AIKS.

Building this further, workers organisation Centre of Indian Trade Unions’ (CITU) General Secretary Tapan Sen said, “The lavish statement of the Minister on her government’s commitment to peoples’ well-being and livelihood does not, as usual, match with the actual allocations.”

Talking specifically about social sector and welfare related expenditures such as MNREGA, he said that the Budget drastically cut down allocation by 41 percent of what the government actually spent in 2020-21 although the rural unemployment and joblessness increased phenomenally.

In Mid-day meal, allocation was cut down by Rs 1,400 crore from what was actually spent last year. In ICDS, the allocation reduced by 30 percent compared to allocation in last year’s budget. In jobs and skill development, allocation was cut down by 35 percent compared to allocation in the last budget while Sitharaman indicated the government move to “bring down the number of Centrally Sponsored Schemes” as per the recommendation of the 15th Finance Commission.

Sen said that the Budget entirely focused on promoting “ease of doing business” for corporates and big business, both foreign and domestic, by way of easing the burden of compliance of their statutory obligations under Companies Act, and also in the matter of direct tax assessment and recovery of unpaid taxes, besides numerous exemptions on various heads.

“Promoting tax evasion by corporates with impunity has become the hallmark of the “ease of doing business policy” of the Modi Govt, which tantamount to sponsored loot of national exchequer,” said Sen.

He pointed out that while lamenting on financial crunch and low revenue generation during the pandemic period, the Finance Minister did not utter a single word about the need to recover huge accumulation of unpaid direct taxes (Corporate and Income Tax) of Rs. 10,57 lakh crore in the process of their last five year rule; of this Rs. 2.29 lakh crore tax dues are under any dispute and yet remained unrecovered. Further, during the same five-year period, the corporate tax rate was drastically slashed down for promoting better compliance.

CITU said the Budget talked about its wholesale privatization programme of mostly profit-making PSUs, while declaring closure of all loss-making PSUs, even those in core and strategic sectors like pharmaceuticals, heavy manufacturing etc.

Leaders said the entire focus is on selling the assets including land at the disposal of these PSUs, Railways, Ports etc under their programme of monetisation combined with privatisation. Even in Railways, Urban Transport, gas-pipe lines and also electricity discom sector, reforms proposed by the Govt are virtually privatization through PPP route.

“The government appears to be in a haste in its selling spree of national assets. Rs 1.75 lakh crore is targeted to be garnered through privatization in the current fiscal,” said CITU.

Sen also alleged that the government’s “Minimum Government” programme was simply a strategy to hand over the financial sector to private hands by increasing FDI to 74 percent in the insurance sector while pushing through IPO in LIC and privatization of public sector banks after recapitalization from national exchequer. He called such measures “disastrous as well as destructive propositions.”

He also pointed out that public health infrastructure was not spared from privatisation either despite the grim experiences of the pandemic. The organisation also voiced other concerns such as the reduction in customs duty on steel semis and scrap that will severely affect the domestic steel industry, particularly the integrated steel plants, both in public and private sectors.

“In totality, the government policy continues to be destructive for the national economy as a whole. In this background the projection of 11 percent growth in 2021-22 appears to be sound bites without much substance. [Sitharaman citing] Labour Codes [to] ensure universal social security and statutory minimum wage for all is totally devoid of truth. These Codes are going to abolish all labour rights including that to even ask for social security and minimum wage and that is why the entire trade union movement has rejected forthright these Labour Codes and demanded their scrapping,” said Sen.

Overall, peasant organisations said the Budget did not provide anything for people, did nothing for addressing the severe unemployment situation, lack of direct relief to people under severe distress through income and food support.