Union Budget 2023-24:
An exercise in increasing loot of the working people to enrich the capitalists

Like every year, as the presentation of the Union Budget approaches, various lobbies of Indian and foreign monopoly capitalists have been raising the demand of further corporate tax cuts and government handouts. They are arguing that when the global economy is slowing down, capitalists need more “incentives” to keep the Indian economy growing at a fast pace.

Year after year, the Union Budget announces further attacks on the living standards of working people, in the name of making India ‘the fastest growing economy of the world’. Accelerated growth of economy has meant intensification of exploitation of workers and peasants for rapid increase of the wealth of a few. Year after year, the Union Budgets have been robbing people to enrich capitalists through the management of direct and indirect taxes.

The Union government, at the direction of monopoly capitalists, has carried out various ‘tax reforms’ during the last few years by claiming that they will help people by way of lower prices or more jobs. The result of each of these ‘reforms’ has actually only been further fattening of monopoly capitalists at the cost of workers, peasants and other toilers.

The Goods & Service Tax (GST) was called the biggest ‘tax reform’ when introduced in July 2017. It was claimed that it would bring down prices by eliminating multiple taxes and their cascading effect. However, the introduction of GST immediately raised prices of most services as the GST rate was fixed at 18% as against the service tax of 15% which was levied before the introduction of GST.

After five years, it is evident that GST, instead of reducing prices and reducing the tax burden on working people, has led to them paying much more tax.


GST collected,

Rs crore









The GST collection in April-November 2022 is nearly 24% more than corresponding period of 2021. At this rate the GST collection in 2022-23 will be around 18,00,000 crore rupees. Thus, a further Rs. 6 lakh crore is being extracted from the working class and peasants by way of GST after five years of its introduction.

While tax burden on working class and peasants is being raised it is being reduced on corporates. In 2019 the government announced a reduction of corporate tax rate from 30 per cent to 22 per cent, along with a further reduction to 15 per cent for new corporations from 2020-21. At the time of announcement, it was claimed that this will encourage capitalists to invest in expanding production capacity and thereby create more jobs.

As per the Parliamentary Committee on Estimates the corporate tax rate reduction has led to additional profit of Rs. 1.84 lakh crore to capitalists and corresponding revenue loss to the government in the two years, 2019-20 and 2020-21.

All that tax reduction has resulted in is the soaring of corporate profits and stock market. There has been no increase in the rate of capital investment by capitalists in creating new means of production. Big capitalists have used their increased profits for acquisitions of other companies to increase the monopolization. Unemployment has remained high.

When government spends money towards making anything cheaper for the people, it is called a subsidy. However, money that is spent to boost capitalist profits is called ‘incentive’. The Production Linked Incentive (PLI) Scheme was launched in 2021-22 for 14 sectors. Under the scheme, capitalist companies in these sectors are given additional money for increasing their production over a base year. It is proposed to hand out Rs 2 lakh crore to capitalists by way of such so-called incentives over the next five years. Hundreds of Indian and foreign companies have applied for such incentives, including some of the world’s biggest monopolies like Apple and Samsung.

Capitalists are now demanding the extension of PLI to more goods, even toys and cycles. They are demanding that the provision in the budget for PLI be substantially increased.

A capitalist always tries to maximize production if he is in a position to sell the output profitably. Why is an incentive required for him to do so? So PLI is nothing but another way of handing out people’s money to capitalists.

In addition to the above incentives, the government has announced another special incentive scheme of Rs.76000 crore for setting up production plants for semiconductor chips locally. Half the cost of this scheme will be funded by the government.

One of the biggest forms of handing out public funds to benefit private capitalist companies is the writing off of loans which they have borrowed from government owned banks. As much as Rs 10.71 lakh crores of bank loans have been written off over the last 5 years alone.

As 1st February draws near, a lot of excitement is whipped up about the budget by the bourgeois media. Debates are carried out about whether the budget would be pro-peasant, pro-worker or pro-capitalist. Such debates are aimed at hiding the truth that it is the big capitalists who are setting the agenda for government policies. No matter whether the BJP or the Congress Party or some other bourgeois party is in charge, the government will necessarily serve the interests of the capitalists, headed by the monopoly houses. This is what historical experience shows.

As in previous years, the 2023-24 budget will further consolidate the economic orientation of fulfilling the greed of the biggest monopoly capitalists for maximum profits, at the expense of the majority of working people.

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