Sonia Gandhi’s letter puts many official expenditures under the public scanner

Wed, 08 Apr 2020 14:22:19 +0000

Image Courtesy:economictimes

No sooner was Congress President Sonia Gandhi’s advice to Prime Minister Modi made public, both critics and followers sat up and took notice. Social media, now fuelling news media more than ever, has made everybody online a political observer and commentator.

The Congress President’s response has the tone of a factual report and was a reply to suggestions sought by the prime minister himself. PM Modi had sought suggestions from Opposition parties at a time when the nation may be a few days away from the next stage of the Coronavirus pandemic. However, it has done something bigger. Each of the points she has raised, has put many expenditures under the public scanner. Most of these had been put on the back burner as all political, public, and media focus has been on the Coronavirus pandemic.

She had suggested five steps, which according to her would help the government to save money and add the funds to the budget needed to deal with the pandemic. Her suggestions were not as simple as they seemed in writing. Each is a critique of massive expenditure that the Narendra Modi-led government has incurred so far, and planned for future projects that the opposition feels should not be a priority.

Topping her list of austerity measures was a “complete ban on media advertisements – television, print and online – by the Government and Public Sectors Undertakings for a period of two years.” As reported in the Indian Express the only advertisements allowed should be Covid-19 advisories and those on issues relating to public health. “Given that the Central Government currently spend an average of Rs 1,250 crores per year on media advertisements (not including an equal or greater amount spent by PSUs and Government companies), this will free up a substantial amount to alleviate the economic and social impacts of COVID-19,” she is quoted in the IE. She has asked for a two-year ban on this expenditure.

This suggestion got a sharp response from the News Broadcasters’ Association (NBA) which has strongly opposed Sonia Gandhi’s suggestion. According to a report in the economic times the NBA has reacted strongly and issued a statement. The NBA has stated that her suggestion was “highly demoralising”, especially now when the media was out reporting on Covid-19. The statement was also shared by journalist Rajat Sharma, who heads the NBA, called it deplorable. “News Broadcasters Association (NBA) deplores Congress president Sonia Gandhi’s suggestion for 2-year ban on govt ads to print, electronic, online media,” he stated.

Gandhi also pointed out the Rs 20,000 crore Central Vista ‘beautification’ project, and suggested that it be put on hold.

“At a time like this, such an outlay seems self-indulgent to say the least. I am certain that Parliament can function comfortably within the existing historical buildings. There is no urgent or pressing requirement that cannot be postponed until this crisis is contained. This sum could instead be allocated towards constructing new hospital infrastructure and diagnostics along with equipping our frontline workers with Personal Protection Equipment (‘PPE’s’) and better facilities,” she is quoted in news reports.

According to the IE report, Sonia Gandhi also asked the Prime Minister to ‘order a proportionate reduction of 30 per cent in the expenditure budget of the Government’. She also pointed out that all the money collected for the ‘PM Cares’ fund be transferred to the ‘Prime Minister’s National Relief Fund’. This brand new ‘PM Cares’ fund has been in the spotlight and questions have already been asked about the need for this second fund, and also how even government doctors were being ‘encouraged’ to ‘donate’ to it. Many celebrities, including actors, sports-persons, industrialists have made public declarations of their support and promised big donations to the fund.

Gandhi said “it seems like a waste of effort and resources to have and create two separate silos for the distribution of funds.” She added that the yet to be utilised Rs 3,800 crores of the PM-NRF, and the additional money from the PM-Cares fund will ensure security to those who need it most urgently.

Her other suggestions also put a critical spotlight on the other big expenditures this government has undertaken on foreign visits by the prime minister, president, vice president and other union ministers, state chief ministers etc. One of the sharpest suggestions include the suspension of international travel by the Prime Minister, as well as other dignitaries. Gandhi put it on record once again that these international trips by the PM,and ministers had cost Rs 393 crore, in the past five years. She suggested that the PM allow travel in special cases, and the money saved can be used for anti-Covid-19 programmes.

Gandhi has, of course, supported the ordinance slashing the salaries of all Members of Parliament by 30 per cent. “Every single Indian has made great personal sacrifices to fight this disease. They have complied with every suggestion, instruction and decision taken by your office and the Central Government. It is time that the legislature and the executive reciprocate this trust and good faith,” she stated.

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Budget 2019: As Tax Revenues Fall, Govt. Squeezes Expenditure

Thu, 04 Jul 2019 06:13:56 +0000

Tax revenues are estimated to have fallen short by a whopping Rs.1.67 lakh crore in 2018-19. So, the govt. has put the screws on public spending, cutting it by Rs.1.46 lakh crore.

If you want to see neoliberal dogma in action, have a look at the finances of Modi government’s last year of the first term. Details of will emerge in the full Budget for 2019-20 to be presented in Parliament on 5 July, but the Controller General of Accounts (CGA) has all the data about last year’s spending and income.

In the Interim Budget presented in February this year, just before the general elections, the outgoing Modi-led BJP government had estimated that Rs.17.3 lakh crore was expected as revenue receipts, mainly made up of tax collections. However, the CGA shows that by March end (which is the end of financial year 2018-19), revenue receipts were Rs.15.6 lakh crore. That’s a shortfall of Rs.1.665 lakh crore.

The reason for this shortfall is not difficult to work out. Net tax revenue was wildly estimated at an exaggerated amount of Rs.14.8 lakh crore in February whereas by end of March it turned out to be Rs.13.2 lakh crore – a shortfall of Rs.1.674 lakh crore. This was contrary to the big claims of rising GST returns, better income tax compliance, wider tax net and so on.

After adding up various other sources of revenue to the tax revenue, the final figure for total receipts of the government was Rs.16.66 lakh crore, short of the estimated Rs.18.23 lakh crore in the Interim Budget.

It is difficult to believe that just one month before the financial year ended, the government had no idea that this was the sorry state of affairs. The only conclusion is that figures were artificially hiked up in February with an eye on the upcoming elections.

It is customary for mainstream economists and financial gurus to go into paroxysms of hand wringing when confronted with revenue shortfalls. They immediately trot out the global neoliberal prescription of cutting spending, which should be practiced by all governments at all times, according to them, but especially so if revenues are falling. Otherwise, they say, deficit will grow, and that is a strict no-no for any true-blue neoliberal.

The Indian finance ministry mandarins are steeped in this mythology, and so, of course, they too put the squeeze on expenditures, as can be seen in the table above. Total expenditure was estimated at Rs.24.57 lakh crore in the Interim Budget in February but come March, the CGA reveals that it had actually subsided at Rs.23.11 lakh crore. That’s a cut of Rs.1.458 lakh crore.

This squeeze did not happen in just the last month of the financial year, that is, in March. Actually, the finance ministry had squeezed funding across the board throughout the year. But that was in preparation for various expenditures that had to be incurred as the year ended. For instance, Rs.20,000 crore was allocated for the first tranche of the scheme for income supplement of farmers (PM-KISAN), to be followed by another tranche of Rs.75,000 crore this year. Several other instances of this kind can be cited, including the so-called social security scheme. Apart from such special political decisions, pick up any year and you will see that govt. spending spikes in March as the financial year end. It is after accommodating this kind of last-minute spending, as also the election related spending that the govt. has ended up with a total reduction in expenditure.

The question now is this: in the upcoming budget, how is the govt. proposing to tackle the crisis of falling revenues? This is of concern to the people because the govt. will be inclined to cut spending if that happens. And, that will be disastrous at a time when the economy is going through a slowdown, demand is flagging, investment is stagnating, and joblessness is raging.

Courtesy: News Click

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expenditure | SabrangIndia

Sonia Gandhi’s letter puts many official expenditures under the public scanner

Budget 2019: As Tax Revenues Fall, Govt. Squeezes Expenditure

Tax revenues are estimated to have fallen short by a whopping Rs.1.67 lakh crore in 2018-19. So, the govt. has put the screws on public spending, cutting it by Rs.1.46 lakh crore.