Pre-Budget Consultation with Finance Minister
Central Trade Unions demanded directional change of economic policies
We demand Govt to ensure ‘Ease of life and livelihood of the common people”, “not merely
ease of doing business”—the central trade unions asserted in the prebudget consultation
meeting with Finance Minister on 17th January 2015.
All the eleven central trade unions submitted joint memorandum which basically underlined
trade unions’ view and proposals for directional change in the pro-corporate pro-big-business
economic policy regime which landed the country’s economy into a mess in the process of last
few decades. They spoke on one voice on the disastrous consequences even during the
period under the new government at the centre, of such pro-corporate economic policy regime
on the declining standard of living of the common people and also on employment generation,
downslide in wages, mass scale contractorisation etc.
CITU was represented in the meeting by its General Secretary, Tapan Sen. Sen reminded the
Finance Minister that in the same pre-budget consultation meeting held on 6TH June 2014,
trade unions urged upon reversal of the economic policies followed by the UPA govt which
according to Finance Minister himself, landed the country’s economy in the mess. He has
many times made such comment both inside and outside Parliament. But in the process of
last eight months it became clear that his government has been pursuing the same brand of
policies more aggressively bulldozing the opinions of the common people, trade unions and
various mass organization and also bulldozing the Parliament through Ordinance route. He
reminded the Minister that the Govt felt it emergency in promulgating Ordinances for
denationalization of the coal industry, for tampering the Land Acquisition Act for the benefit of
big corporates and land-mafias, But no emergency was felt for implementing the consensus
tripartite recommendations of successive Indian Labour Conferences for enhancing minimum
wage to Rs 15000/- or giving the anganwadi, mid-day-meal, ASHA and other scheme workers
the right of minimum wage and social security benefit or ensuring same wage as regular
workers for the contract workers for doing the same work. And while neglecting these issues
involving millions of working people, slogans are being chanted “sabka saath –sabka vikash”
in the media particularly when in the span of last two years including eight months of NDA rule,
wage level in rural india has taken a drastic and dramatic plunge. During the same period,
MNREGA expenditures declined by 3 and 36 per cent as per Mid Year Economic Analysis
published by Govt. The same document expressed expectation of same trend of deceleration
of wage to continue. Side by side, the urban wage-level is being suppressed to the level of
hardly 2.5% of the total cost of production on the average. This is quite natural since the Govt
is busy in promoting “ease of doing business” complementary to which creating severe un-
ease and miseries in the lives and living of the working people. If these trend continues, the
NDA Govt’s so called dream of all round development will remain a mere rhetoric being made
by the Minister in public domain through media to deceive the people –that can never
materialize in the face of aggravating poverty, decline in purchasing power of the common
people and shrinkage of the domestic market making any investment unsustainable The Govt
must the direction of its policies reversing its project of privatization, dismantling labour laws
and frittering away natural resources.
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Among the trade union leaders present in the meeting were Brijesh Upadhyay and Surendran
(BMS), D L Sachdeva (AITUC), S Q Jama(INTUC), R K Sharma (AIUTUC), Shanmugan (LPF)
Monali (SEWA), Ashok Ghosh (UTUC), S P Tewari (TUCC), Santosh Roy (AICCTU), S D
Tyagi(HMS).
The joint memorandum submitted by the Central Trade Unions is reproduced below.
CENTRAL TRADE UNIONS’ JOINT MEMORANDUM TO FINANCE MINISTER
17th January 2015
The Hon’ble Minister of Finance,
Govt. of India,
North Block,
New Delhi
Dear Sir,
We thank you for inviting the central trade unions representing the working people in the country in both organized and unorganized sector for this pre-budget consultation. In the previous pre-budget consultation meeting with you held on 6th June 2014, we urged upon you to please consider a directional change in the economic policy regime from that pursued during the previous government which, you have also admitted, had landed the country’s economy in a bad situation. In fact, we had articulated our views and proposals on that premise. But we like to submit candidly that our proposals did not receive a positive response and the economic policies followed the same trajectory and made situation worse for the mass of the people during the intervening period. Sir, the Mid Term Economic Analysis (2014-15) by Govt of India itself admitted that for the period under review despite increase in GDP growth rate, and a much bigger increase in profit of the corporate sector and big business lobby, the wages for the working people who actually create the GDP in both rural and urban areas plunged on the average. Overall standard of living of people deteriorated and unemployment situation in the country has not improved in the least. Much more jobs were lost owing to closure/lockout, retrenchment than created during the intervening period. And in the midst of such situation, the Govt has already decided to cut already budgeted expenditure in the social sector such as MNREGA, Health, Education etc which we strongly deplore. Such a phenomenon warranted serious reconsideration on directional change in the economic policy regime and we again urge you for he same.
2 We express our serious concern and dismay over the manner the Govt have been pushing various major economic policy related decisions through promulgation of Ordinances. At least eight Ordinances were promulgated during last eight months of the new Govt. We record our determined opposition to such practice of Ordinance route of governance. In particular we also oppose the Ordinance on coal sector, insurance sector and on Land Acquisition Act and want you to please take note of the rousing opposition and struggles by the workers and the farmers against such disastrous exercises. We demand all such Ordinances should be withdrawn forthwith.We wish that our candid observations, considered views and concrete proposals are taken in the right spirit and responded with all seriousness and given appropriate reflections in the ensuing budget 2014-15.
Our proposals: Some of these specific proposals have time and again been placed by us in various policy smoaking fora including the earlier pre-budget consultations. However, we would like to reiterate them, urging your positive response:
• Take effective measures to arrest the spiraling price rise and to contain inflation; Ban speculative forward trading in commodities; Universalise and strengthen the Public Distribution System; Ensure proper check on hoarding; Rationalise, with a view to reduce the burden on people, the tax/duty/cess on petroleum products.
• There must be massive investment in the infrastructure in order to stimulate the economy for job creation. The Mid Term Economic Analysis(2014-15) published by Govt of India has clearly mentioned about the failure of the PPP experiments in infrastructure development and opined for public investment. It is our considered view that the Public sector should take the leading role in this regard. The plan & non-plan expenditure should be increased in the budget to stimulate jobs creation and guarantee consistent income to people.
• Minimum wage linked to Consumer Price Index must be guaranteed to all workers, taking into consideration the recommendations of the 15th Indian Labour Conference as enriched by Apex Court of the country as reiterated in 44th ILC in 2012. In any case, it should not be less than Rs.15,000/- p.m.
• FDI should not be allowed in crucial sectors like defence production, telecommunications, Railways, financial sector, retail trade, education, health and media.
• The public sector units played a crucial role during the year of severe contraction of private capital investment immediately following the outbreak of global financial crisis. PSUs should be strengthened and expanded. Disinvestment of shares of profit making public sector units should be stopped forthwith. Budgetary support should be given for revival of potentially viable Sick CPSUs
• In view of huge joblosses and mounting unemployment problem, the ban on recruitment in Govt. deptts, PSUs and autonomous institutions (including recent Finance Ministry’s instruction to abolish those posts not filled for one year) should be lifted as recommended by 43rd Session of Indian Labour Conference. Condition of surrender of
3 posts in govt. departments and PSUs should be scrapped and new posts be created keeping in view the new work and increased workload.
• Proper allocation of funds be made for interim relief of 20% and 100% DA merge with basic pay and allowances including neutralization percentage be paid on merged DA in view of 7th CPC to all Govt. employees. Similarly, 100% DA of PSU employees be also merged with basic pay.
• The scope of MGNREGA be extended to agriculture operations and urban areas as well and employment for minimum period of 200 days with guaranteed statutory wage be provided, as unanimously recommended by 43rd Session of Indian Labour Conference. The drastic cut already inflicted on the MNREGA allocation should be restored.
• The massive workforce engaged in ICDS, Mid-day meal scheme, Vidya volunteers, Guest Teachers, Siksha Mitra, the workers engaged in the Accredited Social HealthActivities (ASHA) and other schemes be regularized. No to privatization of centrally funded schemes. Universalisation of ICDS be done as per Supreme Court directions by making adequate budgetary allocations.
• Steps be taken for removal of all restrictive provisions based on poverty line in respect of eligibility coverage of the schemes under the Unorganised Workers Social Security Act 2008 and allocation of adequate resources for the National Fund for Unorganised Workers to provide for Social Security to all unorganized workers including the contract/casual and migrant workers in line with the recommendations of Parliamentary Standing Committee on Labour and also the 43rd Session of Indian Labour Conference.
• Remunerative Prices should be ensured for the agricultural produce and Govt.investment public investment in agriculture sector must be substantially augmented as a proportion of GDP and total budgetary expenditure. It should also be ensured that benefits of the increase reach the small, marginal and medium cultivators only;
• Budgetary provision should be made for providing essential services including housing, public transport, sanitation, water, schools, crèche health care etc. to workers in the new emerging industrial areas. Working women’s hostels should be set up where thereis a concentration of women workers.
• Requisite budgetary support for addressing crisis in traditional sectors like Jute, Textiles, Plantation, Handloom, Carpet and Coir etc.
• Budgetary provision for elementary education should be increased, particularly in the context of the implementation of the ‘Right to Education’ as this is the most effective tool to combat child labour.
• The system of computation of Consumer Price Index should be reviewed as the present index is causing heavy financial loss to the workers.
• Income Tax exemption ceiling for the salaried persons should be raised to Rs.5 lakh per annum and fringe benefits like housing, medical and educational facilities and running allowances, Railways Running Staff and a staff in other deptts should be exempted from the income tax net in totality.
• Threshold limit of 20 employees in EPF Scheme be brought down to 10 as recommended by CBT-EPF. Pension benefits under EPS unilaterally withdrawn by the Govt. should be restored. Govt. and Employers contribution be increased to allow sustainability of Employees Pension Scheme and for provision of minimum pension of Rs.3000/- p.m.
4 • New Pension Scheme be withdrawn and newly recruited employees of central and state govts on or after 1.1.2004 be covered under Old Pension Scheme;
• Demand for Dearness Allowance merger by Central Govt. and PSUs employees be accepted and adequate allocation of fund for this be made in the budget;
• All interests and social security of the domestic workers to be statutorily protected on the lines of the ILO Convention on domestic workers.
• The Cess Management of the construction workers is the responsibility of the Finance Ministry under the Act and the several irregularities found in collection of cess be rectified as well as their proper utilization must be ensured.In regard to resource mobilization, we would like to emphasize the following:
• A progressive taxation system should be put in place to ensure taxing the rich and the affluent sections who have the capacity to pay at a higher degree. The corporate service sector, traders, wholesale business, private hospitals and institutions etc. should be brought under broader and higher tax net. Increase taxes on luxury goods and reduce indirect taxes on essential commodities as at present the overwhelming majority of the populations are subjected to Indirect taxes that constitute 86% of the revenue.
• Concrete steps must be taken to recover huge accumulated unpaid tax arrears which has already crossed more than Rs.5 lakh crore on direct and corporate tax account alone, and has been increasing at a geometric proportion. Such huge tax-evasion over and above the liberal tax concessions already given in the last two budgets should not be allowed to continue.
• The SIT constituted for unearthing black money must deliver visible result which is yet to be seen. Effective measures should be taken to unearth huge accumulation of black money in the economy including the huge unaccounted money in tax heavens abroad and within the country. Finance Minister should make provisions to bring back the illicit flows from India which are at present more than twice the current external debt of US $ 230 billion. This money should be directed towards providing social security.
• Concrete measures be expedited for recovering the NPAs of the banking system which is on the increasing trend again from the willfully defaulting corporate and business houses. By making provision in Banking Regulations Act, CMDs and Executives to be made accountable for creation of NPAs.
• Tax on Long term capital gains to be introduced; so also higher taxes on the security transactions to be levied.
• The rate of wealth tax, corporate tax, gift tax etc. to be expanded and enhanced.
• ITES, outsourcing sector, Educational Institutions and Health Services etc. run on
commercial basis should be brought under Service Tax net. Govt.
• Small saving instruments under postal and other agencies be encouraged by incentivizing commission agents of these scheme
OUR SERIOUS CONCERN:
We would like to express our strong resentment that the previous Govt. failed to positively respond to the collective voice of the Central Trade Unions on the very important
5 issues concerning the working people of India, both organized and unorganized, consistently repeated in the form of a ‘10 point charter’ backed by several collective nationwideprogrammes. We expect that this Govt. will take initiative to discuss these issues with the Central Trade Unions in order to find a solution. We also express our opposition to the so called Banking Reforms encouraging private sector/capitalists banking at the cost of public sector banks which saved the economy to an extent during the last global financial meltdown. We also oppose increase in limit of FDI and disinvestment of equity in insurance sector and FDI in pension. We strongly oppose the FDI in Defence and Retail Sector. Several such measures against the working men and women inthis country including anti workers proposals contained in the New Manufacturing Policy have our strong opposition, as in our experience these kinds of measures have helped the growth of only a small section of the capitalists while the larger sections of the working population continue to be marginalized and impoverished. We also oppose the hectic measures of changing labour laws in the name of labour reform both by the central and the state governments which are basically aimed
at legitimizing ongoing widespread violations by the employers’ class and also throw out overwhelming majority of the workforce of the purview of the labour laws themselves at the total mercy of the employers.
POST BUDGET MEETING WITH TRADE UNIONS
Successive Finance Ministers have agreed to hold post budget meetings / consultations with the central trade unions. However, it has not been materialized except for one occasion. We understand such meetings did take place with the Corporate Associations/Employers Federations. We would like to importunate upon you to arrange such post budget meeting with trade unions also.
With regards,
Brijesh Upadhyay S Q Jama D L Sachdeva Harbhajan Singh Sidhu Tapan Sen
BMS INTUC AITUC HMS CITU
Yours sincerely,
R K Sharma S P Tewari Monali Santosh Roy Ashok Ghosh Shanmugan
AIUTUC TUCC SEWA AICCTU UTUC LPF
