Imphal Review of Arts and Politics


Union Budget 2021 and What the Northeast Can Expect From it, as Well as be Prepared For

Much has already been said about the Union Budget 2021 presented by the finance minister, Nirmala Sitharaman on February 1. Among many others, what was also prominently outlined in this budget document of 60 pages, the first 36 of which contain the script of the budget speech and the rest, annexures, is an intent that point towards an eventual undoing of the welfare state model that India was originally conceived of, to lean more towards a market determined political economy. The budget therefore openly sides with corporations. It must also be taken note of that COVID pandemic has alarmingly contracted the Indian economy, as also the rest of the world. However, it is also true that even in the midst of the crisis, there were several corporations whose businesses were unaffected and instead made extra killings, but the new budget introduced no COVID cess on any of these corporations. Instead, new cesses were levied indiscriminately on the public by raising the price of petrol by Rs.2 and diesel by Rs. 4. More significantly than this is in what may be considered as the preamble of the budget approach stated at the very beginning of the finance minister’s speech. She said her approach is rested on six pillars, namely, “Health and Wellbeing”, “Physical & Financial Capital and Infrastructure”, “Inclusive Development for Aspirational India”, “Reinvigorating Human Capital”, “Innovation and R&D”, and “Minimum Government and Maximum Governance”. Of these, the sixth, “Minimum Government and Maximum Governance”, can be treated as the superstructure of the outlook of this government, therefore understandably reflecting in its budget intent too. It is, in short, a sugar-coated way of saying privatisation will henceforth no longer be an exception but a normalised official resort.

Indeed, the budget paper itself spells this out in the section on “disinvestment” and “asset monetisation”. From “disinvestment” alone, the budget estimate proposes to raise a sum of Rs. 1.75 lakh crores and to this will be added another unspecified amount from “asset monetisation”. To put it in plain words, under this disinvestment initiative there will be a certain category of public sector undertakings will be sold to private parties and the government thenceforth would only earn taxes from them. As to which category of government enterprises would be open to such “outsourcing” or totally sold by auction, Annexure-3 of the budget document has the details. Public sector undertakings to come under the strategic disinvestment which will not be sold but “outsourced” are Atomic energy, Space and Defence, Transport and Telecommunications, Power, Petroleum, Coal and other minerals, Banking, Insurance and Financial Services. In these, there will be bare minimum presence of the public sector enterprises. The remaining CPSEs (Central Public Sector Enterprises) can be sold, merged or closed, it says. The budget estimate also proposes “asset monetisation” of idle or under exploited government assets. In crude terms, this will be like leasing out government infrastructures to private parties for rent income. As to which assets will end up monetised thus is not exhaustively spelled out, but certain land and freight routs of the railways will be some of these. The budget estimate also indicates toll highways will also likely come under this category. All this will also be in the name of the much-hyped Public Private Partnership, PPP.

All this is in the neoliberal belief in the laissez-faire, or the natural fairness of the market and that the competition it engenders automatically checks prices and promotes quality of services and goods. There is a lot of truth in this no doubt, and indeed we have seen how so many public enterprises, except for a very few, have not been able to live up to expectation despite the immense tax money resources at their command all because of the skewed sense of complacency amongst employees that their jobs are immune to scrutiny for bad performance, unlike in the open market where each employee knows his or her career depends solely on performance. For instance, why do government schools and colleges fare so badly, when private schools and colleges, although their teachers and staff are much less paid and protected from larger economic downturns, generally shine much brighter. The results of the high school leaving certificate examinations as well as higher secondary certificate examinations demonstrate this each year. Take also the example of how the Manipur State Road Transport Corporation, withered away despite being in charge of a fleet of 200 transport vehicles, passenger as well as freight, while private initiatives with just one or two vehicles are known to prosper. Fair competitions do also check prices and promote quality, that is if the competition remains fair, which seldom is the case, given the ruthless cutthroat nature of market instincts.

There are however plenty of downsides to this and in recent times, extremely grave ones are coming to the fore. The chief among these stem from the fact that the driving logic of the market is profit, and profit is about keeping cost of production down and price of products dear. This often translate as creating the condition for emergence of cheap labour with whom to create big capital. Indeed, one of the easiest ways of keeping production cost low is low salaries and benefits for employees. In all economies which follow this model the world over, extreme income inequities have not only become a reality but is threatening to get worse and take societies to breaking points. While workers get condemned to wretched subsistent living and job insecurity, business owners are allowed to get obscenely rich, all out of the labour of their workers. Even in remote backwater places like Manipur, we are already beginning to see this grave new world unfolding. This being so, so many who controlled capital were able to make fortunes out of the COVID disaster, while others have been thrown out of their jobs and livelihood means. This is another reason why all must remain alert of the new direction the Indian economy is being steered towards. Maybe in many cases, privatisation will result in delivering better productivity by the enterprises concerned, but these rejuvenated enterprises could also result in the slackening of the nation’s commitment to protecting human dignity and rights. This question must not be ignored at any cost.

There is one more thing that those in the Northeast ought to be vigilant of. The budget has another feature that tell of yet another meta narrative of the current regime. This has to do with the ruling party’s stated policy of homogenising the Indian people and economy. Loud evidences of this were seen in the controversy over the Citizenship Amendment Act that provoked prolonged but non-violent street protests in Delhi, the scrapping of Article 370 which gave Kashmir a special status in India, the effort to marginalise all other religions in the country except Hinduism etc. Hence, this year’s budget speech also has no special mention of the Northeast as has been the trend in the past many decades. The DoNER ministry and the NEC, created to look after the developmental affairs of the region were also side-lined as never before. This however does not mean the region was completely ignored by the budget for indeed there are plenty of schemes of which a fair share will land in the region. As for instance there is an outlay of Rs.19,000 crores for road building in Assam, there is also another Rs.1000 crore for the uplift of tea garden workers in West Bengal and Assam. These two of course are probably meant as favours in view of the upcoming Assembly elections in these two states. But there is also the outlay for setting up 750 Model Eklavya Schools in tribal areas each with outlays of Rs. 20 crores to Rs. 38 crores and Rs. 48 crores in hilly areas. No points for guessing that a large number of these too will be located in the Northeast. Likewise there will also be 15,000 schools to be qualitatively strengthened to incorporate the National Education Policy. Furthermore, there will be 100 new Sainik Schools set up. Surely, the Northeast will also have its share of these as well. There are more such schemes mentioned, but the moot point is, the Northeast is now being taken as homogenous part of the larger plan, and not treated as anything unique or special, either in identity or economic needs. As to whether this is good or bad is a matter for debate, but the Northeast needs to take note of this changing perspective so they are not caught unawares when things have advanced too far and made difficult to revert.

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