interim budget

The Interim Budget Is Indifferent to the Concerns of Adivasis

The estimates presented by finance minister for FY 2024-25 for Social Justice and Tribal Affairs Ministries remained largely unchanged and see a marginal increase of 1% in its allocation across all schemes for STs.

With general elections around the corner and a ‘vote on account’ budget, a reflective reading of the budget is required to understand where the priorities of the current government lie. Ensuring sufficient allocations of schemes and public entitlements to Adivasis and Dalits and thereby correcting historical injustices to these marginalised groups is not one of them.

The estimates presented by finance minister Nirmala Sitharaman for FY 2024-25 for Social Justice and Tribal Affairs Ministries remained largely unchanged and see a marginal increase of 1% in its allocation across all schemes for STs. From Rs 1,19,795.67 crores allocated in the 2023-24 budget, it has increased to just Rs. 1,21,022.85 crore in the current budget. There are also often repeated cases of underutilisation of funds in the given fiscal year. For instance, the Revised Estimates for 2023-24 reveal that expenditures reduced by 23% and 38% for the Social Justice Ministry and the Tribal Affairs Ministry respectively.

It shows that the Ministry of Social Justice was not able to spend the budget allocated to the SEED scheme, while the tribal affairs ministry fell short of spending on its flagship project Eklavya Model Residential Schools (EMRS). The revised estimates for the SEED scheme for 2023-24 are only Rs 15 crore although the allocation was Rs 40 crore. Whenever there are large revisions in the budget, it not only affects the credibility of numbers presented in the budget, but the downward revisions, in particular, can be unfavourable for beneficiaries who are likely to receive fewer benefits and the benefits may also get restricted to fewer people.

The SEED scheme was launched in February 2022 for the economic empowerment of Denotified (DNT), Nomadic (NT) and Semi-nomadic tribes (SNT). The scheme aims to provide livelihood support, health insurance, assistance for housing, and competitive exam coaching. Though quite comprehensive in its scope, the scheme has failed to deliver. While the Social Justice ministry received nearly 5,400 online applications for availing the benefits under the scheme, none of the applications had been approved on the portal citing reasons of tribe categorisation into SC, ST and OBCs for the delay in implementation. Looking at the under-utilisation of funds, it appears that not much improvement has happened on that front.

PM Narendra Modi in his Lok Sabha address on February 5 claimed that his government has taken up the welfare of the most vulnerable people of the country on a mission mode. The prime minister took credit for recognising the Particularly Vulnerable Tribal Groups (PVTGs) who are otherwise rendered invisible in the vote bank politics due to their small numbers in the population. He referred to the introduction of the PM JANMAN scheme as a testimony of his government’s commitment to the cause of tribal welfare. However, the recent allocations in the interim budget 2024-25, do not match these claims and certainly do not the findings of various reports on the socioeconomic status of the marginalised groups.

According to the Tribal Development Report, 2022, the first of its kind since independence, Adivasis are at the bottom rung of India’s development pyramid. The National Family Health Survey-5 (2019-21) clearly indicates that over 70 per cent of Scheduled Tribes lie in the lowest quintiles. Likewise, the Ministry of Tribal Affairs (MoTA) in its 2021-22 Annual Report reveals that over 45% of STs were living below the poverty line in rural areas and over 25% in urban areas.

It would, therefore, make better sense to look at development indicators such as education, health and nutrition as analytical screens against absolute budget numbers or percentage increases under various schemes for these marginalised sections of society.

According to NHFS-5, the median years of schooling completed for STs was a mere 5.2 as compared to 8.5 of the socially dominant ‘other’ category. Likewise, the school attendance ratio (65.1%) was the lowest for STs in the middle, secondary and higher secondary education sector. The Union Budget 2024-25 remains flat-footed in assessing the educational needs of these communities with a discernable reduction in budget allocation for scholarships and fellowships. For instance, the PM Research Fellowship under AWST witnesses a decrease from Rs. 34 crores to Rs. 30 crore, and Rs. 30 crore under AWST, down from Rs. 34 crore. The overall budgetary allocation on education needs to be brought in line with the recommendations of National Education Policy 2020 which advocates 6% of GDP to be spent on the sector. This comes to Rs 19,66,309 crore, but in the current budget, education was allocated Rs 1,24,638 crore. The interim budget 2024-25 shows no effort has been made to ensure quality education for all.

Inclusive development cannot be achieved without securing the health and nutrition needs of the Scheduled Tribes. The infant mortality rate for Scheduled Tribes was over 41 compared to 28 for all; the under-five mortality rate was 50 for Scheduled Tribes and 33 for all, according to the NFHS-5.

The Rural Health Statistics (2021-22) revealed a shortfall of 9357 sub-centres, 1559 primary health centres and 372 community health centres in tribal areas against the required numbers as on March 31, 2022. NFHS-5 also reports the Nutritional Status of Children and revealed that over 40% of ST children were stunted, 23% were wasted and about 39 were underweight compared to ‘Other’ communities at 30%, 17.5%, and 27%, respectively.

Given the depravity of the educational and health conditions of these marginalised sections of society, the interim Union Budget 2024-25 is a statement of apathy and indifference beneath the claims of inclusivity.

K.C. Adaina and Divya Pradeep teach Economics at Azim Premji University and Christ University, Bangalore, respectively.

The Mirage of ‘Nari Shakti’ and ‘Lakhpati Didi’

While the interim budget is trying to sell the idea that women have an opportunity to become wealthy, the government has squarely ignored their basic needs.

In her budget speech, Union finance minister Nirmala Sitharaman has identified the unleashing of ‘nari shakti’ (women’s power) as one of the biggest achievements of the Modi government since it came to power in 2014. She claimed that “the empowerment of women through entrepreneurship, ease of living and dignity for them has gained momentum in these ten years”.

One of the examples of this model of nari shakti, which has created a hype in the mainstream media, is the claim that the government has enabled the creation of one crore ‘Lakhpati Didis’ or women whose household income is above one lakh per year, through self help groups (SHGs) under the Deendayal Antyodaya Yojna-National Rural Livelihoods Mission (DAY-NRLM).

The much hyped scheme, inaugurated by the prime minister on August 15, 2023, aims at training women for the production of led bulbs, repairing and operation of drones for agriculture, plumbing and other non-traditional skills. The ministry in turn makes third party agreements and helps these women with branding and marketing their products. Some of the main partners of NRLM and the Ministry of Rural Development are Patanjali, Flipkart, Bill and Melinda Gates Foundation, etc.

The scheme ties women with credit lines and MUDRA loans, many of which are being serviced by the non-commercial banks under the aegis of priority sector lending.

The intention to build links between agribusinesses and women is illustrated through the ‘Namo Drone Didi’ programme that was announced in November 2023 and has been allocated Rs 500 crore in the interim budget. This scheme is set to enrol women in the promotion of digital agriculture by providing 15,000 women’s groups ‘kisan drones’, which they can rent out to farmers. In this sense, women’s SHGs will become agents of corporate giants who aim to dominate the agricultural markets. It appears that programmes like ‘NAMO Drone Didi’ and ‘Lakhpati Didi’ are being used to trap women’s SHGs into corporate networks, especially transnational agribusiness giants who are firm allies of the Modi government.

Also read: Big Talk, Small Action: Modi Govt’s Work on Women’s Empowerment in the Last 9 Years

While the interim budget is trying to sell the idea that women have an opportunity to become wealthy, the government has squarely ignored their basic needs. By stating that ‘outcomes’ not outlays are important, the finance minister has absolved the government of all responsibility for providing women basic services. Hence, it is not surprising that while lofty claims are made about allocations and achievements, the government’s record on expenditure of these schemes is absolutely abysmal.

For example, the finance minister has linked women’s dignity to the joint ownership of houses under the PM Awas Yojana (Rural). However, the budget of the scheme shows that revised estimate for the scheme in 2023-24 was about 50% of the budget estimate, implying that very little money was spent for the programme.

Similarly, in the Har Ghar Jal programme, which has been marketed as pro-woman, the actual government expenditure in 2022-23 was 16% lower than the previous year. Furthermore, the budgetary estimate for 2024-25 is even lower. The utilisation of funds in the flagship Swachch Bharat Mission (Gramin) for open defecation free villages remains at 60-70%, even if the outlays remain the same in each year.

Schemes and subsidies that are essential for wellbeing of women are seeing low government spending and allocation cutbacks. Some examples of these are nutrition (food subsidy and PM POSHAN), education (scholarships), widow pension, and employment (MGNREGA). The onus for these is slowly being shifted on the state governments without adequate support from the Union government. In short, the Union government has shrugged off its responsibility for providing conducive living conditions for women in the country. Instead, it is arguing that women are responsible for their own ‘empowerment’ by enhancing their capabilities and should fund their own development through their savings.

Also read: Can the Indian Sportswoman Speak?

This individualised notion of women’s empowerment has led to a neglect of the systemic discrimination and violence that has been faced by women, and this is also reflected in the interim budget. The proportion of the gender budget in total budgetary spending has remained at about 5-6% during the two tenures of the Modi government. The money allocated to the Ministry of Women and Child Development has remained at around 0.5% of the total budgetary expenditure.

Furthermore, in the wake of rising violence against women, the government’s commitment to invest in infrastructure for support to victims is also questionable. The funds for Mission Shakti, combining schemes for protection and empowerment of women, are not even 0.1% of the total budgetary expenditure and 70% of the Nirbhaya fund remains unspent. The lack of political will for augmenting infrastructure for protection of women has resulted in weak and tardy implementation of legislations against domestic violence and sexual harassment. This pattern is compatible with the continuous targeting and moral policing of women by the hindutva brigade.

The pro-corporate and neoliberal policies of the government have created the conditions for the growth of this right-wing ideology. In this situation, the image of the ‘Lakhpati Didi’ is part of the larger hegemonic project of ‘Vikasit Bharat’, which is being used to legitimate an authoritarian government.

It is an attempt to weaken the resistance of the democratic women’s movement and fracture its social base. The women of India need to intensify their resistance and demystify the mirage of nari shakti and work towards ousting this manuwadi government.

Archana Prasad is a professor at Jawaharlal Nehru University.

Watch | FM Ignored Huge Concerns Like Jobs, Private Sector Investment, Consumption: Pronab Sen

Sen told Karan Thapar that the finance minister’s speech was definitely not the whole truth of the economy and not as transparent as it could have been.

In an interview to discuss Nirmala Sitharaman’s interim budget, professor Pronab Sen said the finance minister is only half right when she claims the economy is doing well. This is not true of rural India where wages have fallen in real terms.

Sen, who is presently country director for the International Growth Centre and chairman of the Standing Committee on Statistics, said in a 45-minute interview to Karan Thapar for The Wire that major problems facing the economy, such as unemployment and jobs, private sector investment and poor levels of demand and consumption, were deliberately ignored by the finance minister in her speech.

Sen, who was earlier India’s chief statistician, added that the finance minister’s speech was definitely not the whole truth of the economy and not as transparent as it could have been.

Ignore the Spin, Incomes, Consumption and Private Investment Have Stagnated

Finance Minister Nirmala Sitharaman’s shortest budget speech was largely about reiterating the Modi government’s achievements over the past decade. But facts have never come in the way of Modi’s penchant for weaving self-congratulatory narratives.

Finance Minister Nirmala Sitharaman’s shortest budget speech (56 minutes) was largely about reiterating the Modi government’s achievements over the past decade. It is another matter that many of the key achievements cited did not have the backing of data or facts. But facts have never come in the way of Prime Minister Modi’s penchant for weaving self-congratulatory narratives.

The most astounding claim the finance minister made was that average real incomes have gone up by 50% during Modi’s tenure. This flies in the face of the government’s own data sets formally released some time ago stating that regular average monthly wages in India have stagnated at around Rs 20,000 for five years. It was Rs 19,450 in 2017-18 and Rs 20,039 in 2022-23, as per the recently released Periodic Labour Force Survey (PLFS). Real wages have actually declined by over 25% in five years. Given this data released by the Modi government, it is astonishing that the finance minister should make a claim of 50% growth in real incomes.

There is near consensus among economists, including among those well disposed towards the Modi regime, that real rural wages have stagnated for years. This income stagnation has reflected in the stagnation in private consumption over the past several years. Private consumption, the main driver of GDP growth in India, has grown at about 3% on average annually in the past five years. This data, too, is corroborated by the Ministry of Statistics and Programme Implementation.

So broadly, there is evidence of stagnation in income and consumption. There is also consensus within the industry that private investment has stagnated through Modi’s 10-year tenure. The finance minister herself has been exhorting domestic industry to start investing in fresh capacity.

So incomes, consumption and private investment have broadly stagnated. There has also been a sharp fall in household savings in recent years as real incomes have declined. These facts cannot be controverted even by whatever limited data is coming out of the department of statistics. It is possible that in future even these data sets may cease to exist! The average GDP growth under the Modi government’s tenure so far is 5.8% and many economists, including Arvind Subramanian, the Chief Economic Advisor in NDA I, have suggested the number could be up to 2 percentage points less.

Recently, Dr Pronab Sen, chairperson of the Standing Committee on Statistics, told me that the K-shaped growth recovery after COVID-19 has possibly resulted in a big statistical anomaly. In normal times, organised sector growth has a positive correlation with the vast unorganised/informal sector. Both grow together. But for the first time after COVID-19, the organised sector has shown a rebound but the unorganised sector continued to suffer. The positive correlation broke down. This leads Sen to conclude that the GDP growth number could be overestimated because in the Indian system, the organised sector data available with the corporate affairs ministry is used to extrapolate for growth in the vast unorganised segment.

So, the GDP number has also been suspect for a long time. Most budget numbers are predicated on the nominal GDP stock. If the GDP number is flawed, many other related figures and ratios will also be faulty.

Of course, all this does not come in the way of finance minister Sitharaman making hyperbolic claims of India being the biggest growth story in the world with rising incomes, consumption, investment and employment. The PLFS survey also shows a huge growth in the number of self-employed – from 52% of the total employed in 2017-18 to 58% in 2022-23.

Labour economist Santosh Mehrotra reckons the growing army of self-employed constitutes very low quality employment and among them the number of unpaid workers has increased from 40 million in 2017-18 to 95 million in 2022-23. Unpaid workers are not treated as formally employed by the International Labour Organisation. No wonder the finance minister’s speech hardly devoted even a paragraph on employment strategy.

This is the nature of the political economy that Prime Minister Modi has created before seeking his third term as a “development messiah”. Privately, he probably recognises the distress among the bottom 60% of the population and has, therefore, chosen to provide free food to them for the next five years.

When Modi took power in 2014, his slogan was to move India’s poor from dole and entitlement to a framework of empowerment and partnership in growth. That objective clearly lies in tatters, notwithstanding a booming stock market in which a few hundred companies’ shares are watched with bated breath by less than 7% of the population.

A Social Autopsy: Navigating Rhetoric and Realities in the Interim Budget

Without investing in people, without creating a robust foundation of rights and social infrastructure, and without creating decent jobs, just riding on increased capex on mega infrastructure and corridors will not benefit the people at large.

Finance minister Nirmala Sitharaman used the interim budget before Lok Sabha elections to highlight the ‘achievements’ of her government over the last ten years. She also outlined the new direction that the Bharatiya Janata Party regime has introduced in fiscal policy.

Before we embark on a critical evaluation of the finance minister’s assessment of the lost decade, it is crucial that we acknowledge the ideological underpinnings in her budget speech.

The minister emphasised the shift from an “earlier approach of tackling poverty through entitlements” to the new mantra of “empowering the poor”. In effect, she denounced the understanding where the citizenry was entitled to social welfare – healthcare, education, pensions – and could demand it from the state as a right. Instead, she spoke of having supplanted this with a new perspective that sees citizens as mere labharthis, the recipients of the ruler’s benevolence.

In the same vein, Sitharaman unveiled the new definition of ‘social justice’ and ‘secularism’ as delivery of benefits and services. “Previously, social justice was mostly a political slogan,” she said in her speech. “For our government, social justice is an effective and necessary governance model,” she said, implying the importance of reaching all eligible beneficiaries through what she refers to as the “saturation approach”.

In a country where one’s social position continues to determine one’s opportunities, access to resources and political clout, can we afford to reduce social justice to mere service delivery?

The constitution enjoins upon the state to ensure justice within ‘social, economic and political’ realms. But the BJP wishes to reduce it to only benefit delivery as is evident in its resistance to the demand for a socio-economic caste census. Such a census will enable better policies to ensure political and institutional inclusion of the marginalised community. In fact, the budget allocation for ‘Census Survey and Statistics’ has been cut down, indicating that the government has no intention to undertake a census any time soon.

Similarly, there has been concerted effort from the BJP and the Rashtriya Swayamsevak Sangh (RSS) to claim that Muslims have been a major beneficiary of the government’s welfare schemes as the government has not discriminated among its labharthis. In her budget speech, Sitharaman calls this “secularism in action”.

RSS’s mouthpiece calls this a shift from “appeasement to empowerment”. But can one strip a community of its dignity, its political voice, endanger its citizenship, push them under the shadow of mob terror and bulldozer justice and still claim this “development” to be “all-round, all-pervasive and all-inclusive”, as claimed by the minister in her budget speech?

Speech versus reality: addressing needs of the poor, women, youth, and farmers

She claimed that the budget is focussed on ‘four major castes’ – ‘garib’ (poor), ‘mahilayein’ (women), ‘yuva’ (youth) and ‘annadata’ (farmer).

Let’s analyse whether her claim holds for each of these sections of the populace.

The omission of Prime Minister Modi’s promise to ‘double farmers’ income’ from the budget proposals is an admission of failure in this regard over the last ten years. Additionally, her claims about the farmers are also devoid of the concerns around the fact that during the Modi years from 2014 to 2022, at least one lakh farmers committed suicide, as per the recently released National Crime Records Bureau (NCRB) report. This amounts to nearly 30 suicides per day in these nine years.

In the second term of the Modi government, the number of farmer suicides increased in absolute numbers from 10,281 to 11,290. The number of suicides among agricultural workers rose by 41%, from 4,324 to 6,083.

Not only are the landless tenants overlooked by the PM KISAN Yojana, the flagship scheme referred to by the finance minister, but even when it comes to landholding farmers who are eligible under it, the allocation has stagnated.

Separately, allocation for the Pradhan Mantri Fasal Bima Yojana is marginally lower than the revised estimates for 2023-24. However, its efficacy appears dubious, with only a small sum of Rs 3,878 crore paid in claims to 7.8 lakh farmers during the Rabi season of 2022-23. This raises concerns about the scheme’s ability to effectively support the majority of applicants.

Also read: Interim Union Budget Follows Tradition of Modi Government’s Apathy Towards Most Vulnerable

Hyperboles to distract from dismal job opportunities

The finance minister’s pronouncements to cater to ‘entrepreneurial aspirations’ of the youth, branded as ‘Amrit Peedhi’ (a generation that belongs to an auspicious future), seem like clever distractions against the dismal employment outlook that the Modi years have left the country with.

Government figures show that the all-India unemployment rate for all ages in urban areas was pegged at 6.7% (females) and 3.2% (males) in July 2011-June 2012, which has nearly doubled to 9.2% (females) and 5.9% (males) in April-June 2023.

As per the Centre for Monitoring Indian Economy (CMIE), India’s youth unemployment rate continues to climb, with the 20-24 age group experiencing a significant rise. As per CMIE, India has failed to reap benefits of ‘demographic dividend’ as the young population is feeling discouraged to even look for jobs. From 2017 to 2022, the overall labour participation rate (active workforce seeking employment or already employed) plunged from 46% to 40%.

Lack of jobs in the formal sector has forced vast sections of India’s youth to look for opportunities in the precarious and unregulated informal sector. The government’s feeble measures to provide easy loans to the ‘startups’ belittles the enormity of the unemployment and underemployment crisis facing the country. Nor does it address the question of lack of labour protections in the ‘gig economy’, where a number of young people work on meagre returns.

Key schemes for the poor and women

For the poor, the finance minister speaks of the ‘sabka saath’ approach, but allocates grossly insufficient amounts to key programmes.

The National Social Assistance Programme (NSAP) witnesses a meagre 16 crore increase, with the budget inching up from Rs 9,636 crore (BE 2023-2024) to Rs 9,652 crore (BE 2024-2025). The last revision in the amount disbursed per individual happened in 2007, and 16 years later, it still stands at Rs 200 crore. Even a simple inflation adjustment has not been done to this paltry sum, which would have amounted to Rs 618.09 crore.

The National Rural Employment Guarantee Act (NREGA) allocation shows no increase, remaining at Rs 86,000 crores (BE 2024-2025), which was the revised estimate for the year 2023-2024, initially estimated at a low of Rs 60,000 crore. On top of that only to the state of West Bengal, the Union government owes Rs 7,000 crore on the grounds of “non-compliance of directives”. This amount includes Rs 2,800 crore of wage liabilities.

Amidst the rhetoric surrounding women and Nari Shakti, the Integrated Child Development Services (ICDS), rebranded as Saksham Anganwadi & POSHAN 2.0 in the fiscal year 2021-22, has witnessed a gradual decline in its budget. In FY 2014-15 (Actuals), the budget allocated to ICDS alone stood at Rs 16,683.6 crore, in contrast to the Rs 21,220 crore allocated for Saksham Anganwadi & POSHAN 2.0 in the current budget, covering three schemes – Anganwadi Services, Poshan Abhiyan, and Scheme for Adolescent Girl.

Despite the much-touted 128th Constitutional Amendment Bill, the Nari Shakti Vandan Adhiniyam is yet to be implemented, with delimitation deferred until the post-2026 Census. This delay postpones the government’s commitment to reserving one-third of seats for women in the Lok Sabha and state legislative assemblies. The procrastination of the caste census and delimitation also remains in the future, and the government’s claims rely solely on announcements, lacking real implementation.

While the government’s claim of an increase in the number of women participating in the labour force paints a positive picture, it deliberately fails to acknowledge that this rise, post-pandemic, has compelled women to often resort to tedious and low-paid work or self employment due to unemployment and inflation.

Also read: Rising Female Work Participation Signals Stressed Livelihoods, Not Progress

An exercise in diversion before the elections

The interim budget showcases the skill of the government to remain unfazed in the face of a grim reality.

In a context where wages of construction and agricultural workers have significantly lagged behind rising food prices, and stress in rural areas has led to a concerning decline in demand, the finance minister’s assertions about “moderate inflation” and “increased real income in rural areas” can be seen as a deliberate denial of the cost-of-living crisis. This crisis has significantly impacted the finances of the common people, leading to gross savings of Indian households hitting a multi-decade low.

The claim that “people are living better and earning better” at a time when the price of home-cooked meals has increased by 65% in the last five years and our Global Hunger Index ranking has slipped further down sounds a wishful distortion of reality. The budget has made misleading claims, such as the “average real income of the people has increased by 50%”. In today’s India, a handful at the top are doing exceptionally well and the incomes of the vast majority are dwindling. The fact that the average income is increasing hides the rising inequality.

Without investing in people, without creating a robust foundation of rights and social infrastructure, without creating decent jobs and without adhering to a sustainable as well as equitable paradigm of development, just riding on increased capital expenditure (Rs 11,11,111 crore) on mega infrastructure and corridors, as espoused in successive budgets, will not benefit the people at large.

The authors work at the National Finance team at the Centre for Financial Accountability, New Delhi.

Union Budget 2024 Has Elections and Not Ram Rajya in Sight

Neither its macroeconomics nor the sectoral allocations are such as to help either the poor or the economy to achieve new heights

The finance minister delivered a rousing speech trying to match the prime minister’s address at the consecration of Ram Mandir in Ayodhya on January 22. It promises to make India a developed nation by 2047 and a $7-trillion economy by 2030. It is said, the economy has done well in spite of the pandemic and the wars. Echoing the prime minister, she talked of benefiting the four ‘castes’ – poor, farmers, women and the youth.

Nirmala Sitharaman has followed through on the president’s address to the parliament, which listed the many achievements of the government in the last 10 years. But one thought that the budget, following the exhortation of the prime minister, would move towards establishment of Ram Rajya. So, it would chart a different path. It would present an honest picture of the economy and take steps to address the issues of poverty and uncivilised conditions of living of the vast majority of the citizens. Without these steps there can be no Ram Rajya.

So, what should the budget have contained? Big increase in allocations for employment and agriculture. That is what is needed by the youth, women and the farmers. It would have also mitigated poverty. The finance minister while announcing many things in the budget should have announced that henceforth workers will get a ‘living wage’ promised in the Constitution. For the farmers, the announcement should have been the implementation of the Swaminathan Commission promised full cost price MSP for all crops.

Also read: As Corporates Hijack Union Budget, Agriculture Is No Longer a Priority of the Modi Government

None of these critical steps were announced. Instead, vague promises have been made which cannot be achieved with the presently structured economy and the budget. Unemployment and poverty would persist so that the lot of the young and women is unlikely to improve.

In effect, the budget will not initiate the Ram Rajya promised by the prime minister just a week back. The first thing to do to move towards Ram Rajya is to be honest about data and one’s intentions. Neither of these are evident in the budget.

The macro aspects

If India is to become a $30-trillion economy in real terms by 2030, a real growth rate of 9.55% is required. Currently the average growth rate over the last 10 years has been about 6%. If this persists, India will only reach $14.1 trillion. The per capita income would also be only $9000, not the required $14,000 at which income a country is considered to be rich. So, why promise what is unlikely? It can only be for effect to get votes. That is not what maryada of the rulers should be.

To boost the economy’s average growth rate, there is need to tackle the macro constraints of the economy. The biggest constraint for a while has been the lack of adequate demand due to rising inequality and lack of purchasing power of the vast majority of Indians.

The budget could have been used to boost overall demand and also make it possible for the poor to have higher incomes through robust employment generation. On both these fronts the budget is lacking. Compared to last year, the overall expenditure is going to rise by only 6.1% which is barely above the rate of inflation, so that not much of a boost is going to come from this factor. The increase in expenditure should have been substantial. The primary deficit is also being sharply reduced from 2.3% to 1.5%. This will also reduce demand.

Regarding employment, capital intensive areas are being promoted not labour intensive ones. Even modern construction is highly capital intensive. What was needed was to boost MGNREGA, education, health and rural development spending, which are all big employers. No scheme for urban employment generation has been announced.

Sectoral aspects

The allocation in the last year’s budget for agriculture was Rs.1.44 lakh crore but what is spent is likely to be Rs.1.4 lakh crore. For the next year it is Rs.1.47 lakh crore which is barely 1.5% above the allocation currently. This will not even cover inflation so in real terms it will be less. So, even the inadequate allocation is not spent, so how can the farmers’ incomes improve?

The poor need education and health to upgrade themselves to be able to get better jobs/work. For education the allocation last year was Rs 1.16 lakh crore which was reduced to Rs 1.09 lakh crore and for next year it is slated to get Rs 1.25 lakh crore. For health the allocation last year was Rs 89,000 crore but what is spent is Rs 79,000 crore. For next year, the allocation is Rs 90,000 thousand crore. Not only are these inadequate compared to what is needed but even these allocations are not spent. One would have expected a quantum jump in the allocations to these sectors but this is not in evidence and even if allocations are made they are not fulfilled.

Also read: Budget 2024: How the Modi Government Has Neglected Social Security Pensions Once Again

Corruption and black economy

The finance minister has promised better governance which is so crucial for proper implementation and better outcomes from the schemes announced. In this regard, Transparency International has just released its report, pointing to India slipping in the rankings. Thus, better compliance is not in sight. That is why in India big announcements do not lead to big outcomes and/or improvements in the lot of the common persons.

For instance, a big scheme has been announced for installation of rooftop solar panels. Such a scheme has been ongoing for some time. Talking to those who install these devices, it becomes clear that the scheme is mired in corruption and non-implementation. So, how to get good intentions to fructify. The black economy has to be brought under control.

If the black economy had been checked in the last few years, as often claimed, direct tax to GDP ratio would have sharply risen. It has barely risen in the last 10 years to 6.1% from 5.7%. So, the black economy is not being dented by the steps taken by the government. No wonder there are daily reports of new cases of corruption. If the black economy could have been controlled, there would be more resources for development and the fiscal deficit would be eliminated. The economy would have become more efficient and growth rate would have risen further.

Conclusion

The optics of the budget presented is an election budget with big claims and promises on which the ruling party is going to campaign. Neither its macroeconomics nor the sectoral allocations are such as to help either the poor or the economy to achieve new heights. Is this not a slap on the face of the citizens who have been promised Ram Rajya, which stands for justice and honesty?

Arun Kumar retired as professor of economics, Jawaharlal Nehru University. He is the author of Understanding Black Economy and Black Money in India.

As Corporates Hijack Union Budget, Agriculture Is No Longer a Priority of the Modi Government

The Union government-funded programmes are encouraging a shift in the use of bio-resources to a bio-economy focused on fuel supply rather than food supply.

The Union government plays an important role in designing the investment priority of the state governments towards agriculture.

Its budgetary contribution allows the country to maintain growth parity across the regions, check regional imbalances through resource support to states, give policy support, research and experimental development support, address social inequities, design innovation ecosystems, boost trade, facilitate private investment in food processing and agro processing, ensure food security, contribute to agro-ecosystem health, help with the conservation of forests, rivers, ground water, animals, and fisheries, and promote systematic utilisation of lands available for agriculture and rural development.

There are three major central sector schemes, which form nearly 80%-85% of the budget of the Department of Agriculture and Farmers’ Welfare (DA&FW) allocations for agriculture of the last four years. We have seen high priority for the Pradhan Mantri Kisan Samman Nidhi Yojana (PM-KISAN) and the Pradhan Mantri Fasal Bima Yojana (PMFBY).

PM-KISAN was launched in 2019 and offers direct income support of merely Rs 6,000 on an annual basis. It is not a cultivator-centric scheme. It gives support to the landowner. Close to 40% of the cultivators today are tenant farmers and do not get the benefit of this scheme.

Close to half of the DA&FW budget amounting to Rs. 60,000 crores has been allocated to PM-KISAN. The PMFBY has been allocated Rs 14,600 crores. The main beneficiary of PMFBY is private insurance. Farmers are not.

Also read: Navigating PM-KISAN: A Deep Dive into Digital Challenges Faced by Farmers

The modified interest subvention scheme (MISS) is allocated Rs 22,600 crores.

Sector-wide support measures have been witnessing decreased allocations from the Union government. There is a further decrease in the allocation for sector-wide measures. The emerging pattern of declining share of allocation for measures required for the benefit of longer-term and sustained improvements is a matter of high concern.

Central schemes which include Rashtriya Krishi Vikas Yojana (RKVY) and Krishionnati Yojana have received this year merely 13% of the total allocation made by DA&FW. The challenge of implementation of sector-wide support measures at the state level is on the rise because the fiscally challenged state governments have to bear a greater burden for fund utilisation in the case of sector-wide support measures. In several states, the extent of utilisation against allocation under two of the important sector-wide schemes – RKVY and National Food Security Mission (NFSM) – have been low.

Improving the extent and quality of fund utilisation in the sector of agriculture requires strengthening of institutions and enhancing frontline staff. But the Union government is transferring the control of public assets created for agricultural education, research and extension, production and distribution of agricultural inputs, agricultural credit, electricity generation, transmission and distribution, digitalisation of agriculture, procurement, agro processing, food processing and value addition to the corporate sector.

The share of investment in agriculture for public capital formation has steadily gone down over the last 50 years; now an overwhelming share of agricultural investments is of the private household sector at 82%. Investment by public sector is at 15%.

Although the remaining share of investment at 3% is by the private corporate sector, India had earlier a number of sector-wide development programmes from the Union government side to arrest the ecosystem health, in particular land degradation. Integrated Watershed Management Programme, National Afforestation programme (NAP), National Mission for Green India (GIM), Soil Conservation in the Catchment of River Valley Project, National Watershed Development Project for Rain-fed areas, Fodder and Feed Development Scheme as a component of Grassland Development, Command Area Development and Water Management Programme, and many other such programmes used to receive greater share of allocations.

Their share has been further reduced in the budget allocations of 2024-25. Agricultural intensification-centric programmes will have to depend on external inputs supplied by the corporate sector.

Also read: Budget 2024: How the Modi Government Has Neglected Social Security Pensions Once Again

For the last four years, Union government budgets have tended to promote interventions in linked sectors (animal husbandry, biomass utilisation, forestry and so on) mainly through the corporate sector. Corporate sector programmes are not aligned to land degradation prevention priority. They do not focus on priority on the challenge of soil fertility enhancement. Corporates do not care for the earth or farmers.

Even in the budget of 2024-25 the focus of the Union government is on the promotion of ‘SATAT’ scheme and ‘SAMARTH’ scheme. SATAT is focused on Compressed Bio Gas (CBG), a scheme that encourages entrepreneurs to set up CBG plants, produce and supply CBG to oil-marketing companies (OMCs) for sale as automotive and industrial fuels. SAMARTH is a Sustainable Agrarian Mission that promotes the use of Agri-Residue in Thermal power plants.

The support for bio-energy programme of the Ministry of New and Renewable Energy (MNRE) has been raised by four times. The programmes announced under the rubric of bio-energy, bio manufacturing, bio-refineries are closely linked to the promotion of compressed biogas and ethanol production. The Union government is promoting GOBAR-Dhan Scheme (Galvanising Organic Bio-Agro Resources) through the Ministry of Jalshakti. The goals of this scheme are suspect now. The 2018 scheme started with a focus on keeping villages clean, increasing the income of rural households and generating energy from cattle waste.

The GOBAR-DHAN scheme is also linked to the programme of promoting mandatory use of bio-fuels and is being coordinated through a unified registration portal for biogas, CBG and bio-CNG plants. The vision is to run cars in AmritKaal in India with bio-fuels. The claim that the current government wishes to make the farmers not just annadata – givers of rice – but urjadata – givers of strength – is a misleading assertion.

The Union government-funded programmes are encouraging a shift in the use of bio-resources to a bio-economy focused on fuel supply rather than food supply. All biogas plants require a large investment. Credit systems and public finance are promoting NBFCs embedded in agribusiness to undertake co-lending to sell agricultural inputs under production in the corporate sector.

In reality, the programmes under promotion are not for actual farmers.

Dinesh Abrol retired as Chief Scientist CSIR-NISTADS, and was also professor at ISID. He is currently faculty at TRCSS, JNU.

In ‘Viksit Bharat’, Budget for Health and Nutrition Declines in Real Terms

While the allocation for departments of health and family welfare, and health research, along with nutrition schemes, seem to have increased in absolute numbers, but when adjusted for inflation, there seems to be a decline.

New Delhi: In the interim budget presented for the year 2024-25, Union finance minister Nirmala Sitharaman pitched for a ‘Viksit Bharat’ by 2047. However, in that imagination of a ‘developed India’, the budget allocation for the department of health and family welfare and the department of health research, and key nutrition programmes have dipped for the FY 2024-25 as compared to FY 2023-24 budget estimates, when adjusted for inflation.

Both the two departments related to health come under Ministry of Health and Family Welfare, while nutrition schemes are managed by Ministry of Woman and Child Development.

Against the allocation of Rs 86,175 crores (according to budget estimates) for the department of health and family welfare for FY 2023-24, the allocation for 2024-25 stood at Rs 87,656 crore. While this seems to be an increase in absolute numbers, when adjusted for inflation at even 5%, this is a decline of 3.17%. Thus, in real terms, the budget for the health and family welfare department has gone down.

According to the National Health Policy, 2017, India needs to increase its budget for health every year so as to meet the target of spending 2.5% of the GDP on health by the year 2025.

PMSSY among worst hit

One of the key programmes that was hit was Pradhan Mantri Swasthya Suraksha Yojana under the department of health and family welfare. “The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) envisages the creation of tertiary healthcare capacity in medical education, research and clinical care, in the under-served areas of the country,” says the official document.

For FY 2024-25, the scheme has been allocated Rs 2,400 crore as against the budget estimate of Rs 3,365 crore for the last financial year. This essays a decline of 33% even without taking into account the inflation.

The scheme aims to upgrade existing medical colleges across India and build new AIIMS-like institutions. Six of these include the ones which were conceptualised during the last Atal Bihari Vajpayee-led government. Another 16 were conceptualised by the Narendra Modi-led NDA government which came to power in 2014.

This government constantly claims that establishment of new AIIMS-like institutions has been one of its biggest achievements but according to a parliamentary reply given last year, not one of the 16 institutes conceived from 2014 is fully functional yet. And, now even the budgetary allocation has been slashed.

There is a separate head in the budget document titled ‘Establishment Expenditure of New AIIMS’. “It provides for establishment expenditure of 22 new AIIMS located at different states,” the document says. Under this head too, the budget estimates for FY 2024-25 have declined to Rs 6,800 crore from Rs 6,835 crore (budget estimates) for the previous year.

The Indian Council of Medical Research (ICMR), which comes under the department of health research and is the most prominent research body for health and science, has been allocated Rs 2,432 crore for FY 2024-25 as against Rs 2,360 crore for last year. Again, while in absolute numbers, this seems to be an increase, but when adjusted for inflation for even 5%, it is a decline of 1.87%.

The allocation for National Aids and Sexually Transmitted Diseases (STDs) control programme also decreased to Rs 3,049 crore for FY 2024-25 – a decline of 1% as compared to previous year’s allocation but the shortfall is more than 5% when adjusted with inflation.

Ayushman Bharat

The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM) was launched in 2021 after the massive second wave of the COVID-19 pandemic. The scheme was aimed at preparing for future pandemics. At the time of launch it aimed at spending Rs 64,000 crore over a span of five years. This also saw a decline in allocation as compared to budget estimates for last year. It has been allocated Rs 4,107 crore for FY 2024-25 as compared to Rs 4,200 crore last year.

“The measures under the PM ABHIM focus on developing capacities of health systems and institutions across the continuum of care at all levels, primary, secondary and tertiary, to prepare health systems in responding effectively to the current and future pandemics/disaster,” said the budget document.

The government has also launched a scheme to increase the number of branches of National Center for Disease Control (NCDC). Currently there is only one branch at Delhi. The NCDC was supposed to play an important role during the pandemic.

Under that head itself, the government had planned to control zoonotic diseases (diseases jumping from animals to humans), and strengthen efforts to reign in antibiotic resistance, technically known as antimicrobial resistance (AMR). India has the highest burden of AMR in the world. The allocation in this head too stood slashed from Rs 55.52 crore to Rs 52 crore.

One scheme, which saw an increase almost nearly adjusted with inflation was Pradhan Mantri Jan Arogya Yojana (PMJAY), of which the Ayushman Bharat scheme is a part. The Ayushman Bharat scheme provides an insurance cover of Rs 5 lakh per family per year for the hospitalisation expenses.

As of now, the PMJAY scheme has covered 40% families of India. The insurance premium is paid by the Central and the state governments as it is a centrally sponsored scheme. The scheme has been allocated Rs 7,500 crore for FY 2024-25 as against allocation of Rs 7,200 crore for FY 2023-24 (BE).

While the government touts the PMJAY as a landmark scheme, it receives criticism for not doing enough to create infrastructure and put money in hands of private healthcare providers. However, the government counters this by saying it has also built more than 1.5 lakh health and wellness centres. Last year, the Comptroller and Auditor General had found the scheme riddled with various forms of corruption at multiple levels causing not just loss to the exchequer but defeating the purpose of the scheme.

Nutrition

The finance minister stressed in her speech that Poshan 2.0 will be expedited for improved nutrition delivery, early childhood care and development.

Poshan 2.0 and Saksham Anganwadi scheme aims at “to develop practices that nurture health, wellness and immunity among malnutrition.” India is home to one of the highest number of malnourished children in the world.

The scheme has been allocated Rs 21,200 crore for FY 2024-25, an increase from Rs 20,554.31 crore (budget estimates) from previous financial year. However, when adjusted with inflation of 5%, this allocation is actually a decline of 1.77%.

Recently, India was ranked 111 out of 125 countries in the Global Hunger Index. The government rubbished the report though the report makers stood by it.

In her budget speech, the finance minister said that the government would ‘encourage’ girls in the age group of 9-14 years to take the HPV vaccine for the prevention of cervical cancer. However, she did not spell out whether the HPV vaccine – the jab against the cancer – would become a part of routine immunisation programme of the government given the fact that the government itself had said a few days ago that there were no immediate plans to introduce it in such a way in the later part of this year.

Anganwadi and ASHA workers

The minister also said a committee would be set up to open more medical colleges. However, no more details were given. It may be mentioned here that under the Pradhan Mantri Swasthya Suraksha Yojana, the government is already aiming at developing more colleges.

Sitharaman announced that the ASHA and Anganwadi workers would be extended the cover of Ayushman Bharat. The ASHAs, who are designated as activists, have been constantly demanding that they be given the status of workers so that they can get the cover of social security schemes which government workers get. Though that demand remains unmet, this may be the first instance of people employed by the government being extended the insurance cover of the Ayushman Bharat scheme. Union government employees are covered under the central government health scheme or CGHS, which unlike a health insurance scheme, gives upfront subsidised healthcare — both OPD and hospitalisation — to all its beneficiaries.

Watch | ‘From Rejection of Entitlements to Rejection of Rights’: Interim Budget 2024

Economist Jayati Ghosh notes how older promises like that of income to farmers and “achchhe din” or better days have now been ignored in favour of a “Vikshit Bharat” or developed India.

In conversation with The Wire‘s M.K. Venu, renowned economist Jayati Ghosh analyses the interim budget, with special attention to how older promises like that of income to farmers and “achchhe din” or better days have now been ignored in favour of a “Vikshit Bharat” or developed India – without adequate attention to the collection of real data which could reflect the ground realities of India today.

Ghosh speaks of unemployment and the effects of demonetisation and COVID-19-driven poverty and how these are big challenges the country faces.

With Venu, Ghosh unravels the tradition of “rejection of entitlements” – where what is owed to the people is being presented as largesse by the prime minister – as part of the “broader rejection of rights”.

Ten Years of Modi Govt Rule Marked by Underachievement, Lost Potential for India’s Economy

A key legacy of this government has been fudging data and on other occasions suppressing statistics.

The upcoming budget session is an appropriate time to assess how the Narendra Modi government has managed the economy in the decade since 2014. Historically, governments refrain from making big announcements in such interim budgets. Finance minister Nirmala Sitharaman has also asserted that the budget will not have any “spectacular announcements”. Yet, interim budgets do have considerable signalling value on the eve of elections. In 2019, the Modi government used the opportunity to make a major announcement about cash transfer to farmers (PM Kisan Yojana).

Hence the public and markets will keenly watch whether the lure of elections will induce the government to make grand announcements or even depart from its entrenched policies.

A key concern before the government is managing the fiscal deficit. During the UPA government, commentators argued that it ran an unsustainably high fiscal deficit. However, between 2004 and 2014, the fiscal deficit averaged 4.63% whereas it has averaged 5.13% under the NDA. For both UPA and NDA, the rise in fiscal deficit was necessitated by crises – the global financial crisis of 2008 and COVID-19 respectively. However, when one examines the fiscal deficit together with debt data, it makes for a somber read.

Also read: What the Interim Union Budget Might Bring – and the Context in Which to Judge it

There has been a sharp uptick in the gross debt to GDP ratio, crossing the 80% mark and inviting concern from the International Monetary Fund that the ratio could cross 100% by 2027. The Union government is expected to respond to the debt concerns and bring down the fiscal deficit to 4.5% by 2026 (it was 5.9% in 2023-24).

Fiscal deficits can be reduced by raising tax revenue and reducing subsidies. The tax to GDP ratio has increased by 1%, propelled largely by an increase in indirect taxes. A consistent feature of the NDA government has been sharp reduction in subsidies. In 2013-14, Union government subsidies accounted for 2.27% of the GDP. These now stand at 1.34% in 2023-24.

In the same period, capital expenditure has doubled from 1.67% to 3.32%. Post the COVID-19 pandemic, the government allocated increasing sums towards capital expenditure. The stated logic being that this investment will create jobs and in turn raise demand.

Even the ardent supporters of trickle-down economics privately admit that this reliance on capital expenditure is not bearing fruits. The same sentiment is expressed regarding the Production Linked Incentive (PLI) scheme. Despite multiple revisions and handsome incentives, the manufacturing sector has not taken off. The manufacturing growth rate has averaged 5.9% since 2013-14, the share of manufacturing has remained stagnant and was at 16.4% in 2022-23, and manufacturing jobs halved between 2016 and 2021. The decade of Make in India saw the share of manufacturing in the workforce decline from 12.6% in 2011-12 to 11.6% in 2021-22. Make in India and now PLI have failed to enthuse MSMEs.

Another spectacular failure on the part of the government is disinvestment. While it did sell Air India to Tatas, it has had a dismal track record overall. To make matters worse, public assets have been handed over to select groups inviting concerns from competitors and public sector employees. The proposed national monetisation pipeline has also failed to yield results.

The job market remains depressing, especially for the youth. The Centre for Monitoring Indian Economy notes that the unemployment rate in the age group 20-24 years was 44.5% in the October-December 2023 quarter. For the age-group 25-29 years, it was at a 14 month high of 14.33%.

The adversity of the job market is matched by the distress in rural India where the demand for MGNREGA has reached record highs. Stagnant farmer income and falling rural wages at a time when stock markets are soaring, and billionaire wealth balloons, is an indictment of this government’s priorities.

Watch: Is it True That the Modi Govt Has Lifted 24.8 Crore People Out of Poverty?

India still needs large scale public investments in education and healthcare. Such investments in our human capital have great potential to create significant jobs and will also have a direct impact on the standard of living of our citizens. A key landmark of this government was the adoption of a new National Education Policy (NEP). NEP 2020 recommends that investment in education should be 6% of the GDP. There is bipartisan consensus that we must strive to meet the 6% goal. However, expenditure on education has been less than 3% of the GDP over the last decade.

On the health front, the pandemic forced the government to raise healthcare expenditure. Yet there has been a rise in hunger and malnutrition, a reflection of the larger economic downturn being experienced by a substantial portion of our population. India is ranked 111th of 125 countries on the Global Hunger Index. Instead of addressing the issue, the government’s response has been to reject any such adverse findings.

A key legacy of this government has been fudging data and on other occasions suppressing statistics. This started with the refusal to publish the GDP back series as it showed that the UPA performed exceedingly well. Instead, a new series was commissioned that, confoundingly, revised the UPA growth rates downwards. Similar tactics were employed when the COVID fiscal package was announced. Contrary to the claims of government, the fiscal component of the package was around 1% of the GDP. For the first time since 1872, the census has been indefinitely delayed.

Since the time Prime Minister Modi took office, the government has been blessed with benign crude oil prices. The government could have passed on some of that benefit to consumers and boosted consumption, and thereby the GDP. Instead, the government has consistently kept petrol and diesel prices at a steady higher price and mopped up windfall profits which it has used to keep the fiscal deficit manageable.

The government likes to proclaim that India is the fastest growing economy. However, if they had boosted consumption by passing on the benefits of lower oil prices, how much higher would economic growth have been? That is the sobering lesson of the last decade – underachievement and lost potential.

Professor M.V. Rajeev Gowda is the Vice Chairman of the Karnataka Policy and Planning Commission and heads the Congress party’s Research Department. Akash Satyawali is a public policy professional and National Coordinator, Congress Research Department.