Budget is a good season for India's 'aliens' to read the Constitution's Preamble

The Budget season is a good time to think over and marvel at the India story. It's a good time to think about the great Indian loot of the public. The not-so-masqueraded thievery perpetrated on hapless millions by a failed system.

No, the aim is not to debunk the great Indian growth story. Not to take the sheen away from the fact that a dirt heap of a nation travelled light years in 70 years of independence to become the sixth largest economy in the world.

But the budget is indeed the right time of the year to think about a country that hasn't yet been claimed by its people. There's no better season than this to mourn the day light hijacking of the country, hook line and sinker.

In this budget too you will see grandiose plans being laid out for the uplift of the poor. That's a great spectacle. After all we are talking about the biggest bloc of the poor people in the world. More than 300 million by conservative estimates. Has India ever realistically acknowledged the existence of its poor?

The Economic Survey 2018, which was unveiled on Tuesday, surprised with practically no mention of the word 'poverty'. Even the word "poor" found mention only a handful of times, most of the time in an unrelated context.

The only time the word "poverty" was mentioned in the humungous document was this, from the State of the Economy chapter: "For all the gloom pervading the world, these are the best of economic times for humanity and especially for those living in poorer countries. The global "bads" – war, violence, deprivation and poverty – are at unprecedentedly low levels (Pinker & Goldstein, 2016; Gates & Gates, 2014)."

Skewed understanding of poverty 

That's quite a sanguine view of the world. The good times are coming for all, especially for the poor. The multitude of yojanas that offer basic income, employment, toilets, food and education have been up and about for ages but have they helped in reducing the swelling ranks of Indian poor?

In India our understanding of poverty is skewed, distorted, prejudiced, and most often it runs counter to basic statistical level-headedness. One of the things that we can expect from this year's budget is a grand announcement of the Universal Basic Income (UBI) scheme. A grand idea, but in India you must be an idiot to think it will be anything beyond a mere tokenism. Some great election year lip-servicing of the poverty question.

If the government indeed announces UBI, how much will that be in Indian conditions? How much money will be seen as enough to ensure respectable life for the teeming millions of Indian poor? Not a fancy sum by any stretch of imagination. According to an IMF projection, India, if ever it's going to offer the UBI, the amount will never exceed a paltry Rs 2,600 per year. That works out to around Rs 200 per month to make a poor man help live a respectable life -- with enough food for the family, a roof above the head and education for the children.

The poverty line sham

Paradoxically, this is quite consistent with the other official views about Indian poverty. Like the poverty line. A 2014 panel headed by former RBI governor C. Rangarajan concluded that anyone who spends above Rs 47 a day in cities and Rs 32 in villages could not be considered as poor. That's why the government's old age pension is still Rs 200 per month for those who opt to queue up for it with hands outstretched. That's why the farm pension and medical support for the rural poor remain a joke even now. The old, the poor, the small-time farmers, the unorganized labourers and the homeless are the dregs and discards of the system.

Compare that with how the government is treating its own. According to the government budget data, as much as 20 percent of the government receipts is spent on salaries and pension of around 90 lakh central government employees. If you bundle the debt servicing costs, then the outgo rises to about 75 percent. That means only a meagre 25 percent of the government income is available for everything else, including uplift of the humanity!

In states, this ratio is even more lopsided. In Kerala, for example, salaries and pensions gobbled up as much as 53 percent of the total revenues of the state in FY-18.

With the government fast becoming a heartless beast existing and thriving for its own sake, the 'aliens' are cast further out of the system. After recent hikes following dire protests, millions of Anganwadi teachers in the country, who live in genteel poverty, now get about Rs 5,000 per month as salary. Compare that with the generous hikes for the MPs, judges and those in the top echelons of the government.

More than a million famers committed suicide in the last two decades in the country. They quit life after crop losses made it impossible to repay bank loans worth a few lakhs. On the other side, there are sordid stories about thousands of crores of rupees the banks have had to forgo as non-performing assets lost to ruthless corporate fraud.

Double jeopardy

The budget season is a good time to think about these anomalies. Earlier iterations of the budget were a splendid sight to watch; the pain of a wholesale loot diluted with generous duty cuts on safety pins, salt, tooth brush and the like. Now that the GST council has taken on this onerous task, all eyes are on the direct taxes.

With real hidden wealth going untaxed, the common Indian will only continue to face double jeopardy for decades to come. A budget day is s stark reminder to that fact. What's the double jeopardy for Indian tax payer? The first is, he is a minority, he's poorer than those who evade taxes, and yet he must pay up more taxes year after year -- direct and indirect -- to cover for the parallel black economy that has thrived because an impotent system has failed to track and tax ill-gotten wealth.

Public anger is boiling over the rocketing fuel prices. But is there a solution? Everyone knows that half the cost the consumer pays for fuel is government taxes. The government can't let go of this easy revenue as it has failed to levy real tax from the thriving underground economy. That's the double jeopardy for those who pay 20 percent or 30 percent of taxes on average annual income of Rs 10 lakh or thereabouts.

The taxpayer misery is further aggravated by the booming asset prices fuelled by the underground economy that acts as a receptacle for wealth generated through corruption. That's a double jeopardy again. The corrupt don't pay taxes as their transactions are underground, and the ill-gotten money they funnel into the economy causes an asset price bubble that effectively renders the honest taxpayers aliens and beggars in their own country.

The right example is the prices in real estate, the easy destination for the decadent wealth generated through corruption. Housing is merely an investment vehicle in our sovereign 'socialist' republic, not a roof over the heads of the citizens.

The budget season is a right time to thumb through the pages of the Constitution, tarrying a little on the Preamble and its promises.