Fiscal deficit due to tax concessions to corporates: Yechury

Claiming that India's fiscal deficit was only because of the huge amount of tax sops doled out to the corporates, CPI-M leader Sitaram Yechury Monday contended that the concessions were actually turning out to be counterproductive and leading to a rise in inflation.

"Every year we give over Rs.5 lakh crore of tax benefits to the rich and corporates in India. If the whole tax benefit is added, India will not have any fiscal deficit. Last year the tax concessions given were Rs.5.67 lakh crores while the fiscal deficit was Rs.5.29 lakh crores. So, the fiscal deficit is only because of the concession given to the rich," he claimed.

The Communist Party of India-Marxist politburo member claimed that the corporates, instead of investing in production, were putting the money in speculation leading to inflation.

"The corporates don't invest in production because there is no domestic demand as people don't have the money to buy the goods. So what do they do with the money, they buy gold and foreign exchange and invest in real estate leading to inflation and fall in the Indian rupee," he said.

"Because of these investments in real estate, the stock exchange is booming despite economic growth being zero. Instead if the money is used for building infrastructure, schools, hospitals, creating jobs for the youth, a new India would be created," said Yechury, who is also a Rajya Sabha member.

Delivering the first Satyendranath Majumdar Memorial Lecture on "100 Years of the First World War", organised by the All India Peace and Solidarity Organization, Yechury also accused the Narendra Modi government of not passing on the benefits of falling crude oil prices, to the common people.

"The Modi government has been lucky in the respect that from $115 a barrel, the prices have fallen close to $70. But you and I have not been benefitted, despite the centre collecting Rs. 70,000 crores more by raising excise because of the fallen prices," he said.

"The quest for global hegemony which lead to the World War I, continues to fuel conflicts across the world. While the World War I was described as a war to end future wars, in reality, it heralded an era of perpetual wars.

"The reasons behind the first and the second world wars, I am afraid to say, will continue to be effective, so long as US continues to feel that its hegemony is complete and absolute," he added.