Budget will widen income, wealth inequalities: CPI-M

New Delhi, Feb 28 (IANS) The CPI-M Saturday denounced the union budget as pro-rich and said it will only widen "the already large income and wealth inequalities" in the country.

"This budget, while providing a rich bonanza for the rich - foreign and domestic corporates - ensures further widening of the already large income and wealth inequalities," it said in a statement.

"So much for the slogan of 'achhe din aanewale hein'," the Communist Party of India-Marxist said.

It said the 2015-16 budget carried forward "more aggressively the neo-liberal economic agenda of the earlier UPA government".

It said both foreign and domestic corporates had hugely benefited from the budget.

"The budget proposals will reduce direct taxes by Rs.8,315 crore benefiting the rich and increase the burdens on the people through indirect tax hike of Rs.23,383 crore," it said.

Apart from direct tax benefits, wealth tax had been abolished and corporate tax targeted to reduce from 30 to 25 percent, it said.

"Instead of expanding public expenditures to stimulate growth, employment and people's livelihood, these expenditures are being squeezed."

For 2015-16, the estimated gross tax revenue stands at 10.3 percent of GDP which was less than last year's budget figure of 10.8 percent, it said.

"Expectations of 'tax buoyancy' by the finance minister is, hence, pure imagination."

It said the much higher allocation to the states in the name of "cooperative federalism" was nothing but transferring the amounts from the central schemes to the states.

"The total transfers to the states, including loans and grants, as a share of GDP will, in fact, be lower than what was budgeted for 2014-15."

The CPI-M said that with a pre-occupation to contain fiscal deficit at 3.9 percent, the budget undermined the need to stimulate domestic demand by targeting social sectors.

"The allocations to MNREGA and food subsidy has almost stagnated, in real terms, which shows that the government is not at all serious in implementing food security and generating employment.

"Total subsidy as percentage of GDP has come down from 2.1 percent to 1.7 percent. The allocation for health and family welfare has come down from Rs.35,163 crore last year to Rs.29,653 crore.

"The total budgeted figure for housing and urban poverty alleviation has come down from Rs.6,008 crore to Rs.5,634 crore...

"On the other hand, the reduction in the revenue loss tax concessions given by the central government to the rich (subsidies to the rich called 'tax incentives') are more than the actual fiscal deficit...

"Hence, our economy is suffering from a deficit burden primarily due to such subsidies to the rich, not due to subsidies for the poor."