India, Where Corporate Socialism is a Growth Industry
It was business as usual in 2013-14. Business with a capital B. This year’s budget document says we gave away another $88.6 billion to the corporate needy and the under-nourished rich in that year. Well, it says $95.3 billion but I’m leaving out the $6.6 billion foregone on personal income tax since that write-off benefits a wider group of people. The rest is mostly about a feeding frenzy at the corporate trough. And, of course, that of other well-off people. The major write-offs come in direct corporate income tax, customs and excise duties.
If you think sparing the super-rich taxes and duties worth $ 88.6 billion is a trifle excessive, think again. The amount we’ve written off for them since 2005-06 under the very same heads is well over $ 608.3 billion. (A sixth of that in just corporate income tax). That’s 608300000000 wiped off for the big boys in nine years. . With $ 608 billion – for that is what it is – you could: ·
* Fund the Mahatma Gandhi National Rural Employment Guarantee Scheme for around 105 years, at present levels. That’s more than any human being could expect to live. And a hell of a lot more than any agricultural labourer would. You could, in fact, run the MNREGS on that sum, across the working lives of two generations of such labourers. The current allocation for the scheme is around $5.6 billion.
* Fund the Public Distribution System (PDS) for 31 years. (Current allocation $19.1 billion).
By the way, if these revenues had been realized, around 30 per cent of their value would have devolved to the states. So the fiscal health of the states is affected by the Centre’s massive corporate karza maafi ( tax waivers). Even just the amount foregone in 2013-14 could fund the rural jobs scheme for three decades. Or the PDS for four-and-a-half years. It is also over four times the ‘losses’ of the Oil Marketing Companies by way of so-called ‘under-recoveries’ in 2012-13
Look at some of the exemptions under customs duty. There’s a neat $8.1 billion written off on ‘Diamonds and Gold.’ Hardly a common man or common woman’s items. And more than what we spend on rural jobs. Fact: concessions on diamonds and gold over the past 36 months total $26.6 billion. (A lot more than we’ll spend on the PDS in the coming year). In the latest figures, it accounts for 16 per cent of the total revenue foregone.
The breakdown of the budget’s revenue foregone figure of $95.3 billion for 2013-14 is interesting. Of this, $12.6 billion was written off on just direct corporate income tax. More than twice that sum ($32.5 billion) was foregone on Excise Duty. And well over three times the sum was sacrificed in Customs Duty ($43.3 billion).
This, of course, has been going on for many years in the neo-liberal ‘reforms’ period. But the budget only started carrying the data on revenue foregone around 2006-07. Hence the $608 billion write-off figure. It would be higher had we the data for earlier years. (All of this, by the way, falls within the UPA period). And the trend in this direction only grows. As the budget document itself recognizes, “the total revenue foregone from central taxes is showing an upward trend. “ It sure is. The amount written off in 2013-14 shows an increase of 132 per cent compared to the same concessions in 2005-06. So who says Industry has been slow on growth? Corporate tax waivers are a growth industry, and an efficient one.