Fiscal package too little, too late, says CPM

NEW DELHI: The Manmohan Singh government���s fiscal package came under attack on Tuesday, with the Left dubbing it as ���too late and grossly inadequate���. The CPM said the ���weak fiscal stimulus��� would fail to reverse the slowdown and arrest job losses.

Alleging that the government had ignored the concerns of the common man, the CPM said the increase in plan expenditure was only Rs 20,000 crore, which was less than 0.5% of India���s GDP.

���What was required was a much higher public expenditure programme aimed at generating employment and enhancing incomes of working people through increased public investment in agriculture, expansion of NREGA, higher allocations for health and education, infrastructure like rural roads, housing for the middle and lower income groups and universalisation of the PDS,��� the CPM polit bureau said in a statement.

It said the government had relied mainly on tax cuts to stimulate the economy and that earlier tax sops for the civil aviation sector had shown that private corporate sector was not keen on reducing retail prices despite concessions. ���In the absence of price cuts by the industry, tax concessions would only bolster corporate profits and utterly fail to stimulate demand in the real economy,��� the CPM said.

The party also said that meagre interest rate subsidy and tax concessions to the export oriented sectors would fail to address the job losses and alleged that the government had failed to link the concessions to industry to conditionalities preventing layoffs and retrenchment. The elimination of export duty on iron ore was also described as a ���retrograde step��� by the CPM.

Alleging that the Centre had neglected the state governments in the fiscal package, the CPM sought a debt relief package for the states along with interest rate subsidy on their borrowings and relaxation of fiscal responsibility norms.