Rejection of Subsidies to Poor  To Benefiting Large Corporates

free bus pass for women
Women in a Delhi bus display their pink tickets. | PTI

Currently  inIndian media an active debate is taking place in the country on  “frebbies”  or Subsidies given to poor.  The controversy  was first initiated by  PM Narendra Modi who warned the youth against being influenced by a “revari culture”. Soon  Mr. Upadhyaya,  a BJP  leader and a lawyer,  known for his communal hate speeches, moved a petition in the Supreme Court to prevent ‘freebies’ from being given. Honorable Supreme court immediately took up this petition and appointed a three member committee to examine the issue in consultation with various political parties. This  in spite of dozens of  piled up pending cases such as controversial citizenship bill or draconian labor code petitions. Interestingly the “freebies” listed in the petion include various subsidies given to poor and farmers such as cheap ration distributed (PDS) under food security act, rural employment scheme, MNREGA, electricity, support prices for crops, malnutrition  combating for young children and others schemes. Ironically this list does not include  various tax concessions, waiver of bank loans worth of lakhs of crore rupees being gifted to corporate houses by the same government.

Prime minister Narendra Modi  is an expert in flagging new controversies from time  and  turning them in to a major debate , thus masking his government’s failures in economy, huge price rise, unemployment, foreign policy, damage to democracy and seccular fabric of the nation.

In fact it’s wrong to term  various welfare schemes listed above as “ freebies” while not talking about “Actual Feebies of different tax concessions, free land, water, tax incentives and waiver of bank loans of multi lakh crores of rupees regularly showered on big corporates.

Attack on Rights

India though became the sixth largest country with nearly 3 trillion sized economy and sixty billionaires,  yet it  remains a very poor country. Not just in Asia but lags behind among other South Asian neighbors in human development index. Despite our gloated world power status, the country ranks 101 of 116 nations for hunger index. Suffering of people increased in last three decades of implementation of neoliberal economic policies, especially during last seven and half years.

Public discontent and deteriorating living conditions of toiling people in towns and villages and the militant struggles led by Left parties led to provision of cheap ration (under Food security act), implementation of rural employment scheme MNREGA, subsidized electricity and certain level of support prices to crops and other schemes. These demands possible as a results waged Rights struggles. These measures are giving certain level of relief to poor suffering high food prices and escalating rural unemployment and farm distress.

Amount of relief provided to poor during COVID  pandemic  by provision of life saving food grains and work  under  MNREGA for millions of urban workers emigrated to villages.Unmaginable the misey of people in absence of both the above schemes. These and some other subsidies are not Rewadis or freebies  gifted by Prime minister but a result of hard earned street battles won for enactment of the laws.

Who Pays

In fact the toilers of this country in spite of low wages and shrinking employment and social security worked hard to produce wealth in turning the country the sixth largest economy in the world.In return present government vehemelently refuses the very right to live by resorting to scrap the minimum subsidized relief now available.

It should be noted a bulk of the government’s revenue earnings ie. up to  two thirds comes through indirect taxes of GST, Central excise on petrol, oil and income taxes. The poor and middle classes in the country pay taxes when they go to market oravail services.Here a poor man and billionaire Adani pay the same tax while purchasing goods.

Revenue source Share to union budget, Rs
PDS food rations and MNREGA 2.6 L crores
Tax concessions, bailouts, bank loan waivers to corporates 13.9 L crores

Concessions to  Super rich

While a common man pays  high GST  and excise taxes on food items on diesel & petrol the tax on diamonds range between 0.5 to 3.0 percent. The Corporate tax was lowered to 20  from 30 percent for big companies during COVID times. Late FM Jaitley in 2017 even abolished wealth and inheritance taxes to rich corporate houses. Lowering of corporate tax only brought a loss of 1.53 lakh crore rupees during FY 2021-22 alone.Besides various companies and Western MNCs are provided free land, water, electricity and tax holidays for certain period to establish factories.During COVID period when demand was low to automobiles, two wheelers,even for biscuts the corporates were endowed with bailouts of 2.56 L crores of rupees by FM  Smt. Nirmala Seetharan.Apart from this just during the last seven years the government waived a huge sum of nearly 10 L borrowed by big corporations mostly from public sector banks. Anyway rich in our country get away without paying inheritance and wealth taxes all. All these concessions are responsible for loss of revenues to Union budget resulting a fiscal deficiet as high as 6.7 percent during the current financial year.

While all various tax concessions gigted to corporate houses (amounting to nearly 5.0 L cr rupees) and 10 L cr worth of insovent and waived loans, the expenditure on provision of  cheap ration and free  food under PM Garib Anna Yojana and MNREGA together amounts to only 2.69 L Crore rupees. Hence provision of freebies or subsidized food rations, electricity to farmers and under Ujwala to poor is very much justified as they pay taxes and fill the coffers for government budgets. They are not “ Rewadis” or “gifts” given by governments.

Class Nature of “Rewadis”

Successive governments are faithfully obeying the imperialist financial dictates (from WTO, IMF) and  implementing neoliberal economic  policies in the country for the past 35 years.Budget priorities have been to benefit rich corporates and Western MNCs. Central government never hesitates to spend thousands of crore rupees on building new airports and bullet trains and on corporate loan waivers to benefit super rich. But ironically hesitates spending a few hundred crores on much needed subsidies and grudgingly treat the later as Rewadis. Pro rich wrongful priorities have led the country during COVID epidemic in to serious health, food crisis. Lack of proper health infrastructure (availability of  hospital beds, medicines, oxygen supply) caused loss of lakhs innocent lives. In our budget allocations for health, education  per head are so  small that India  stands only next to a half dozen Sub Saharan African nations. In all developed and middle sized countries provision of  universal health (including free vaccines) and education facilities tocitizens is the prime responsibility of their governments.

BJP has won the UP assembly election mostly by distribution of free ration to the tune of 376 Metric tonnes under PM Grib Kalyan Anna Yojana to millions of poor and succeded in winning the election. This fact itself demonstrates extent of hunger prevailing in our villages. After PM  Modi made use of  them now he questions the usefulness of welfare schemes or Rewadis.

Discussion on viability of  Subsidies or Freebies is nothing but a ploy to reject peoples rights struggles for respectful living for citizens. Even with shrinking tax revenue base states such as Kerala and Tamilnadu are wonderfully implementing PDS and MNREGA or primery health  schemes is laudable. Even during Kerala left government’s record distribution of cheap rations and successful management of COVID crisis is unparrelel and appreciated by one and all. Ruling BJP government unable to tackle basic issues of food availability, education, creation of jobs with it’s wrongful prorich neoliberal developmental priorities is simply masking it’s failures by waging war on welfare schemes.

People should unitedly wage struggles against the pro rich and anti people neo liberal economic policies.

Dr. Soma Marla, Principal Scientist, ICAR NBPGR, New Delhi


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