Shimla: The Communist Party of India (Marxists) has slammed the fiscal package announced by Prime Minister Manmohan Singh for averting an economic slowdown as ‘too little, too late’.
CPI(M) spokesman Tikender Panwar said that an increase of Rs 20,000 crore in plan expenditure that was less than 0.5 percent of the gross domestic product was a weak stimulus for reversing the economic slowdown.
The government needed to come forth with much higher public expenditure program aimed at generating employment and enhancing incomes, especially in agriculture, NREGA, education, rural infrastructure and housing for lower and middle income groups, the party says.
The governments dependence on tax cuts like CENVAT are counter-productive as can been gauged from the sops handed out to the aviation sector earlier, said Panwar. The concession has not resulted in reducing prices, he added.
With the corporate sector reluctant to pass on tax concession to the consumer, only profits will swell but it would fail to stimulate demand in the real economy.
Interest rate subsidy and tax concessions for exports would also fail to address the enormous job losses being experienced in the sector. Elimination of export duty on iron ore not in the country’s interest, the party says.
Besides, the government has failed to link concessions to conditionalities preventing layoffs and retrenchments.
State governments have been left in the lurch by the fiscal package, says Panwar. Tax revenues falling due to the economic slowdown, the states are experiencing great difficulties in maintaining the desired level of plan expenditure.
A debt relief package for the states along with interest rate subsidy on their borrowings and relaxation of fiscal responsibility norms are a must, to enable states to step up expenditure and create jobs as well as expand welfare measures, the party spokesman stated.