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Tokenism and half-hearted measures

A slight breeze of political realism has come to the corridors of the Finance Ministry. Some of the demands of the Left parties have been addressed in the budget. These include the welcome measures of debt relief to farmers; the increase, though inadequate, of the allowances of anganwadi workers and helpers; relief to the middle classes by raising tax ceilings; and removal of ad valorem tax on petroleum products.

Much of the confusion on the debt waiver issue could have been avoided had the Finance Minister given an indication of where the money is coming from. The Left, for example, would vehemently oppose any proposal for disinvestment in public sector undertakings (PSUs) in order to pay the bill, as has been hinted by the Prime Minister. Pitting PSU workers against peasants in distress will hardly amount to helping the aam aadmi. Considering that in the last two years the generosity in tax concessions to corporates as reflected in the “revenue foregone” columns of the budget papers is a staggering amount of Rs. 1,03,689 crore, there is no dearth of resources available to alleviate the debt burdens of farmers.

The gross budgetary support for the Central Plan is 16 per cent higher than last time. This increase is more or less equal to the growth of the nominal gross domestic product, taking into account 8 to 9 per cent real GDP growth and 5 to 6 per cent inflation. The question is this: when tax revenues are expected to increase by over 17 per cent this year, when the foreign exchange reserves are healthy, when the dividends paid by the central public sector enterprises show continuous increase, why is the government so miserly about putting its money where the common minimum programme (CMP) is? Its ideological and political commitment to the “reform” process prevents it from taking substantive steps to increase the share of the poor in national resources.

Take the issue of food security. The only growth rate that the aam aadmi has experienced is that of the prices of essential commodities such as rice, wheat, pulses, edible oils and sugar. The virtual destruction of the public distribution system (PDS) has meant that it is no longer a counterweight to check prices. There are shocking revelations in the recently published NSS report Public Distribution and Other Household Consumption (2004-2005) (Government of India, 2007) of massive exclusions of the most vulnerable sections: 61 per cent of the Scheduled Caste households in rural India, 55 per cent of the Scheduled Tribes and over half of all landless are excluded from the Antyodaya or the BPL (below poverty line) ration cards.

The main problem is not aberrations in the identification of the poor but fraudulent estimates of the numbers of the poor made by successive Planning Commissions, which are then translated into “quotas” of BPL households to the States. It was essential for the Finance Minister to cut the umbilical cord between the Planning Commission estimates of poverty on the one hand and BPL quotas on the other, by announcing substantial increases in food subsidies to include a much larger number of households in the BPL and Antyodaya categories. The budget fails to add even one more household into the PDS. On the contrary, according to the Economic Survey, card-holders among the APL (above poverty line) sections will get foodgrains depending on availability.

Considering that APL includes anyone earning more than the BPL line of Rs. 350 or so a month, such a policy, reflected also in the budget, means that vast sections of the poor are virtually pushed out of the food security net. In the last year, foodgrain allocations to the PDS have been slashed by almost 20 per cent — a whopping 139.62 lakh tonnes. In this context, the meagre increase in the food subsidy by just 3.5 per cent over last year (which actually entails a reduction since the budget assumes a 6 per cent inflation rate) is a slap in the face of all those who had hoped for some relief from hunger from this budget.

Seventy-seven per cent of the population, according to the Arjun Sengupta report, gets to spend less than Rs. 20 a day. The budget has no relief for them, just an extension of existing insurance programmes by an additional allocation of Rs. 200 crore. Even for this meagre amount a condition has been imposed: that only BPL families will be eligible. Can this be termed inclusive growth?

The budget is stamped with tokenism and half-hearted measures. Funds are switched from one scheme to another and portrayed as an increase. For example, in the education budget the allocations for the Sarva Shiksha Abhiyan (SSA) is actually Rs. 80 crore less than last year, but the inclusion of the allocations for the northeastern region (NER) makes it appear to be an increase.

Taken together, an additional Rs. 1,400 crore has been allocated for the two important projects of mid-day meals and SSA (including for the NER), but this is actually less than the additional amount of over Rs. 2,400 crore that came into the Finance Minister’s kitty for these programmes as education cess.

Or take the issue of funds for the National Rural Employment Guarantee Act (NREGA). Although the number of districts where it is implemented is being doubled, the funding increases only by 20 per cent. But even of this increase of Rs. 4,000 crore, a major part, Rs. 3,420 crore, is actually transferred from another scheme. This scheme is the Swarna Grameen Rozgar Yojana, which has been merged in the NREGA. So, the actual increase is just Rs. 580 crore.

If the devil is in the detail, then a scrutiny of the actual allocations reveals some strange decisions — perhaps also reflecting a lopsided prioritisation. For example, in the allocations for health, whereas the increase for anti-AIDS programmes is Rs. 274 crore, the increase for the entire National Disease Control Programme is less, at Rs. 186 crore. It is disturbing that over the years, while people continue to suffer due to malaria and tuberculosis, allocations to control these killer diseases is decreasing.

Strangely, there is no allocation for the Indian Council for Medical Research. And why should the Finance Minister cut the budget for the All India Institute of Medical Sciences, one of our premier institutions? The tax concessions given to private hospitals in the budget are in sharp contrast with the meagre allocations to public hospitals. This is less a public-private partnership and more a privatisation partnership with the government, which is not in the interests of the health sector.

While the budget falls far short of allocating funds for a sub-plan for minority development, it makes an increase of around Rs. 500 crore for various schemes for the minorities. However, it is shocking that the scheme for pre-matric scholarships announced with much fanfare last year was hardly implemented, with less than Rs. 9 crore of the Rs. 70 crore having been spent. It is reported that the money was made available only at the end of the year, which deprived eligible students of scholarships.

The Finance Ministry’s record in ensuring the implementation of priority sector loan schemes to the minorities is poor. It is therefore only a measure of the political bankruptcy of the opposition BJP that it should call the budget a communal one. In fact, much more could, and should, have been done to implement the Sachar Committee recommendations.

Allocations for women, according to an analysis by the Centre for Budget and Governance Accountability (CBGA), shows only a marginal increase from 3.3 per cent to 3.6 per cent of the total public expenditure. The initiative taken for gender budgeting has not gathered much force: the budget papers still refer to only 33 departments as having gender-segregated data. However, State governments do need to follow the example set by the Central budget in submitting a separate gender budget account.

The CBGA also points to a most disturbing decrease in allocations for Scheduled Castes and Scheduled Tribes as a percentage of total government expenditure. Excluding Central assistance for States and Union Territories, the total Plan outlay has declined from 7.9 per cent in 2007-2008 to 7.51 per cent in 2008-2009 for SCs, and from 4.77 per cent to 4.45 per cent in 2008-2009 for STs.

As a footnote, it may be interesting to those following the Indo-U.S. nuclear deal debate that the government’s stated commitment to the development of indigenous technologies is hardly reflected in its budgetary allocations. Allocations for the Department of Atomic Energy have been reduced by Rs. 188 crores. Does this reflect a thrust on nuclear power generation?

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