Govt's economic stimulus merely transfer of misappropriated RBI reserves to corporates: CPI(M)

The CPI(M) on Friday dubbed the government's post-budget, economic stimulus in the form of Rs 1.45-lakh crore tax break to corporates as an act of transferring the RBI reserves of Rs 1.76 lakh crore to India Inc after misappropriating it from the Central bank.

In a statement, the party also asserted that the government's bid to undo the Budget provisions cannot reverse the economic recession as "people do not have the money to buy what may be produced".

In the biggest reduction in 28 years, the government on Friday slashed corporate tax by almost 10 percentage points as it looked to pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments with a Rs 1.45-lakh crore tax break.

 

Two-and-a-half-months after presenting her maiden Budget, hailed as "development-friendly" and "future-oriented", Finance Minister Nirmala Sitharaman announced cutting the corporate tax rate to 25.17 per cent to bring them at par with other Asian countries such as China and South Korea.

The CPM, however, said, "This RSS-BJP government through an ordinance has amended the Income Tax Act giving huge concessions to corporates and superrich to the tune of a whopping Rs. 1.45 lakh crores. This comes over and above the Rs 70,000 crore of concessions to the realty an exports sectors recently."

"The misappropriation of the reserves of the Reserve Bank of India to the tune of Rs 1.76 lakh crore is now being transferred to the corporates instead of it being used for increasing public investments that will generate employment and increase people's purchasing power," the CPI(M) said.

Asserting that India's current economic recession in India has been caused by the lack of demand, the CPI(M) said, "These efforts reversing the budget announcements cannot reverse the economic recession as people simply do not have the money to buy what may be produced."

"With the global economic slowdown and a huge fall in the world trade, any hope of increasing our exports will also come to a naught," it said.

The CPI(M) said the corporate tax, including surcharge and cess, too has been reduced from 34.94 to 25.17 per cent.

"This is a massive concession of about 10 per centage points. Further, companies making fresh investments from October 1, 2019 will have the option of paying taxes of 17.01 per cent inclusive of surcharges," the CPI(M) said.

"The budget announcement of an enhanced surcharge on capital gains has now been withdrawn providing a massive benefit to foreign portfolio investors. This comes on the eve of Modi's visit to the US and his brazen attempt to woo portfolio investors from the US and the rest of the world," it said

The CPI(M) further said "in a situation of alarmingly rising unemployment, lay offs, retrenchment and fall in real incomes of the working people, none of these measures can help improve people's livelihood or reviving the economy".

"What is needed is large doses of public investment to create employment and increase people's purchasing power. The government is pursuing the exact opposite which is nothing else but loot of Indian money for private corporate benefit and speculative profit," it said.

The CPI(M) said it reiterates its demand that the Rs 1.76 lakh crore taken from the RBI reserves be used for public investment to build our much-needed infrastructure.