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Left: it will neither stimulate growth nor control inflation

Special Correspondent

NEW DELHI: The Left parties on Friday criticised the Union budget proposals as anti-people and threatened to launch protests.

The Communist Party of India (Marxist) Polit Bureau called for withdrawal of the indirect tax proposals which, it said, would fuel inflation and adversely affect the people. It said increase in petrol and diesel prices must be summarily rescinded and cuts in food and fertilizer subsidy reversed.

“The Union budget 2010 presented by the UPA government will neither stimulate growth nor bring down inflation. It is premised upon a flawed strategy to meet the budget deficit by increasing indirect taxes across the board, especially on diesel and petrol, which will hit the common people, primarily the poorer section,” the party said in a statement.

In contrast, direct taxes on the affluent sections were reduced. This would further fuel inflation in the backdrop of an already high food inflation rate of 20 per cent.

“As per the Finance Minister’s own estimates, there will be a revenue loss of Rs. 26,000 crore in 2010-11 due to the direct tax concessions doled out to high-income earners as well as real estate developers, hoteliers and other commercial establishments. This comes in the backdrop of nearly Rs. 80,000 crore tax concessions to corporates in 2009-10,” it said.

On the expenditure side, while there was a 15 per cent increase in Central Plan expenditure, the increase in Central assistance for the States was a mere 8 per cent, which implied a squeeze in real terms.

The Communist Party of India (CPI) condemned the budget and expressed shock that at a time when the government admitted that prices of essential commodities went up by 20 per cent, the decision to increase duties on crude oil was taken. This was bound to escalate food prices further as the cost of transportation would increase.

In a statement, the party Central Secretariat said that instead of increasing the allocation for agriculture, the government earmarked Rs. 400 crore to extend the “green revolution” to the eastern region.

It called the measure “absolute tokenism.”

For enhancing the productivity of dryland farming areas, only Rs. 300 crore was provided, when only 40 per cent of land was irrigated. “Most shamefully, the government has increased the target of the flow of bank loan to agriculture by only Rs. 50,000 crore for this year. The budget will not improve agriculture production or stem the agricultural crisis.”

The All India Forward Bloc said, while the government was worried about the Rs. 52,490-crore food subsidy, it remained silent on the Rs. 4,18,096-crore revenue foregone through tax exemptions to corporates.

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