India increases its defence budget by 1.4 trillion rupees to meet the ‘threat from Pakistan’

India's Budget - Bailout for Global Arms Industry

India increases its defence budget by 1.4 trillion rupees to meet the 'threat from Pakistan'

The interim budget presented by the Finance Minister - the last in the tenure of the UPA Government - displays a total unconcern for those ravaged by the global economic crisis. There is no indication of any measures to bring relief to those lakhs of people who have lost and are fast losing their jobs in various sectors - like textiles, garments, gemstones, jewellery etc... No announcement of an effective and adequate stimulus package was made. No concrete promise was made of increased public spending in various crisis-ridden sectors of the Indian economy and society.




Even the much-touted increase in allocation for "flagship" schemes like NREGA is also an eyewash. Actually, the Plan allocation for the current fiscal is Rs. 30,000 crore - revised from the previously declared allocation of Rs. 16,000 crore. This reflects only what the Government has already spent on NREGA: which is far below the actual needs of the scheme. The Plan allocation for the next fiscal year 2009-10 is just Rs. 30,100 crore, a tiny and far from adequate increase indeed. Further, while the total revised allocation for the Rural Development Ministry for the current fiscal is Rs. 64,854 crore, for the year 2009-10 the allocation has actually been slashed by 14.93%.




Pranab Mukherjee's excuse is that the Government has "no mandate," in its fag end, to introduce any far-reaching measures. This fact, however, did not stop the UPA Government just prior to the Budget session from bypassing Parliament to introduce new investment norms that virtually throw open the entire economy to FDI. According to these changed norms, FDI caps stand nullified, since investments by companies "owned or controlled" by Indians having substantial foreign capital are excluded. Even as legislation is pending in Parliament to raise the FDI cap in insurance, and working-class protests have prevented caps from being raised further in various other sectors, this piece of subterfuge allows FDI and foreign players to take control of sensitive sectors of the Indian economy via the backdoor. The very same forces responsible for the global economic crisis are being allowed to rampage into India unchecked.




The pretext of "no mandate" has not caused the UPA Government to have any hesitation in introducing a massive hike in defence allocations - a whopping Rs 1,41,703 crore, representing a 34% increase from last year. This, when the Government was unable to utilise Rs. 7000 crore from last year's allocation. Last year itself, the country's defence budget shot past Rs 1 lakh crore for the first time, three times more than the expenditure on health and education. This time, the Mumbai terror attacks have provided the pretext for yet another steep hike in defence spending.




The Defence Ministry has "assured" the arms industry at the recently held arms expo near Bangalore that defence spending is "recession proof." At the expo, it was Israeli and US arms manufacturers who dominated the show. In the past decade, India has emerged as Israel's largest client and also the largest arms importer among the developing countries. In effect, at a time of recession, the UPA Government with its hiked defence budget has chosen to bailout the global arms industry rather than the Indian poor.




The Interim Rail Budget too is nothing but populist eyewash. The Rail Minister claims to have reduced fares - but was silent on the pre-budget hike in freight charges on agricultural commodities, iron ore and steel. This measure will inevitably further hike the price of essential commodities and is yet another burden on the shoulders of the recession-hit aam aadmi. Also, the very day the Interim Rail Budget was presented, there was a major accident on the Coromandel Express in Orissa, followed by another in Bihar the very next day. These accidents point to the total neglect of public spending on rail safety, something the Rail Minister's boasts cannot explain away.




In a budget speech that shamelessly doubled as election propaganda for the Congress party, Pranab Mukherjee ended with the claim that "our people will surely recognise the hand… that alone can help our nation on the road to peace and prosperity". We can well say that the people of India in the impending elections will surely recognise the hand that gave succour to the imperialist US when its credibility was lowest and dragged the Indian people deeper into the abyss of the global recession.




This comment was published in A CPI(ML) Weekly News Magazine, 17-23 Feb