The lead editorial in the latest issue of CPM mouthpiece, People’s Democracy, criticises the “mini stimulus package” announced by the UPA, while replying to the discussion on the interim budget and underlines the need for a “political alternative”. “If this shift in the policy direction is to be ensured at the national level, then the anti-communal forces’ political alternative to such UPA policies must be made victorious in the forthcoming general elections.

The editorial alleges that the stimulus package will benefit only the corporate houses and not the masses. “These tax concessions may reduce prices but they do not, in any way, enhance the available disposable incomes in the hands of the people. Unless this increases, no amount of tax cuts and bailout packages for the corporate sector will help in reviving the economy. On the contrary, if the same Rs 30,000 crores were to be spent directly through public investment, in say, construction of rural roads, the employment that this could generate would enlarge domestic demand when people spend their salaries which, in turn, would stimulate the economy.”, it states.

It goes on to laud the efforts of CPM-ruled states like Kerala and West Bengal in tiding over the economic crisis and urges the central government to follow them. “In stark contrast, the CPI(M)-led Left governments in West Bengal and Kerala have announced stimulus packages aimed at increasing aggregate demand through increased government spending. This is the most affective way to combat the recessionary conditions rather than offer public money for bailout packages. The Kerala government has announced a package which is equal to 5 per cent of the state’s GDP. This goes into expenditures on public works, irrigation, water supply and housing schemes. This is nearly 10 times, in percentage terms, the fiscal stimulus packages announced by the central government which amounts to only 0.5 per cent of the GDP”, the editorial declares.

... contd.