The Union Budget 2024-25, presented by the Union Finance Minister, attempts to balance fiscal discipline and economic growth, but it significantly overlooks the pressing needs of poor and marginalised communities, particularly SCs, STs, and religious minorities. While the budget includes positive measures like boosting Indian exports and employment generation through internships, company incentives, and skill development initiatives, it tends to favour wealthier groups, leaving many behind. Despite efforts to address rising unemployment and improve educational opportunities, the overall impact on marginalised communities remains uncertain, raising questions about the budget’s inclusivity and effectiveness.
Positive Sparks Amidst Fiscal Clouds
The budget demonstrates a responsible approach to finances and holds a hopeful view of tax revenue, which is a step forward. The plan to increase taxes on capital gains and securities transactions aims to stabilise asset prices. Cutting or removing customs duties in various sectors is expected to make Indian exports more competitive, giving the economy a much-needed boost.
Additionally, the budget sets aside ₹1.5 lakh crore for long-term interest-free loans to help states manage their resources. This is encouraging because it has the potential to uplift marginalised communities by strengthening local programmes. When states have more financial resources, they can invest in crucial areas like healthcare, education, and infrastructure, which directly benefits vulnerable populations.
While the budget doesn’t specifically allocate funds just for marginalised communities, the positive effects are significant. Enhanced state programmes can help address inequalities and provide the necessary support to those who need it most. By investing in local initiatives, we can foster meaningful change that benefits every corner of our diverse nation.
Health and Education: Starved for Resources
Despite an increase in allocations, the budget for health remains at a mere 1.88% of GDP, and education at 3.07% of GDP. These figures fall significantly short of the recommended 4% and 6% of GDP for health and education, respectively. For Dalits and Muslims, who already face significant barriers to accessing quality healthcare and education, these allocations are grossly inadequate. The underfunding of these critical sectors perpetuates the cycle of poverty and marginalisation that Dalits, Muslims, and other vulnerable groups continue to endure.
Minorities Left in the Shadows: A Budgetary Blind Spot
The drastic reduction in budgetary allocation for the Ministry of Minority Affairs (MoMA) to just 0.06% of the total budget is alarming, especially when the expected allocation was at least 1%. This sharp decline will severely impact various schemes aimed at the educational upliftment, skill development, and economic empowerment of minorities. It’s akin to a dim spotlight in a vast auditorium—a missed opportunity to illuminate the path for those who need it most.
Programmes like Pre-Matric and Post-Matric Scholarships, which provide crucial financial support to minority students, are likely to suffer. These scholarships bridge gaps, enabling access to education and skill development. The Maulana Azad National Fellowship, designed to promote higher education among minority students, may also face constraints, putting research and academic pursuits at risk. “NaiManzil,” which combines education with skill training, could lose momentum, affecting marginalised youth who rely on this programme as a beacon of hope to break free from generational cycles of disadvantage.
The reduction in MoMA’s budget directly impacts economic empowerment. Minority professionals and entrepreneurs face hurdles without adequate support. This budgetary blind spot dims the prospects of countless minority students and professionals. It’s not just about numbers; it’s about dreams deferred, potential untapped, and opportunities lost.
Budget Tightrope: Contractionary Measures Raise Concerns
The Union Budget 2024-2025 adopts a contractionary stance that raises significant concerns regarding its potential impact on the economy, especially given the backdrop of substantial revenue growth. While the government has reported increased revenues, the budget’s negligible rise in overall expenditure signals a missed opportunity to tackle pressing issues such as unemployment, inflation, and rising inequality. The decision to slash allocations for critical social sector schemes, notably the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is particularly alarming. With unemployment rates remaining high, an expansionist fiscal policy would have been more appropriate to stimulate job creation and economic growth. Instead, the current budget seems to prioritise fiscal prudence over the urgent need to uplift vulnerable populations, leaving many without the necessary support to navigate these challenging economic times.
Moreover, the budget cuts to essential subsidies for food, fertiliser, and petroleum are not just economically questionable but also harm the most vulnerable in our society. These measures disproportionately impact the poor and marginalised communities, especially Dalits, who rely heavily on these subsidies for their basic sustenance and livelihoods. By reducing support in these critical areas, the government risks exacerbating existing inequalities and pushing more families into poverty. The contractionary measures taken in this budget, therefore, not only undermine the potential for economic recovery but also threaten social cohesion by neglecting the most vulnerable sections of society. A more balanced approach that prioritises both fiscal responsibility and social welfare could have fostered a more inclusive growth trajectory, addressing the urgent needs of the population while promoting long-term economic stability.
Corporate Bonanza: Wealthy Interests Take Centre Stage
In the grand theatre of budgetary decisions, the spotlight often falls on the big players—the wealthy interests and corporations. The numbers reveal a telling narrative: corporate tax revenue contributes a modest 17%, while income tax revenue stands at a higher 19%. This disparity highlights a systemic tilt towards the affluent. It’s as if the budget has a VIP section for the elite, leaving the rest to navigate the less glamorous general admission area.
The new employment incentive scheme, though ostensibly a beacon of opportunity, casts a long shadow over the economic landscape. Corporations, cushioned by substantial subsidies, continue to prosper, while the economic chasm between the rich and the poor expands. Rather than distributing wealth equitably, the scheme entrenches a cycle where the privileged benefit disproportionately, leaving the less fortunate grappling with financial strain.
To address this imbalance and restore harmony, we must reimagine our fiscal approach. The solution lies in recalibrating our tax structure: enhancing transparency, tackling corruption, and implementing a progressive tax system that imposes higher direct taxes on the wealthy while lightening the load on lower-income groups. This adjustment will enable better funding for welfare measures, mitigate inflation’s impact on vulnerable populations, and foster a more equitable economic environment. In this financial opera, let’s rewrite the script to ensure fairness resonates throughout the entire fiscal composition.
Untold Struggles: Dalits and Marginalised Communities Left Behind
The budget documents reveal a notable reduction in the allocation for schemes directly benefiting Dalits. For instance, while the Ministry of Social Justice and Empowerment saw a marginal increase in overall allocation, specific schemes for Dalits and other marginalised communities did not receive proportional increments. The focus on social justice remains broad, often diluting the impact on the most vulnerable communities. The budget fails to provide concrete plans and adequate budgets for the welfare of Dalits, backward classes, SCs, STs, and minorities, particularly Muslims.
The Backlash from Opposition Leaders
The Budget has faced significant criticism from various political leaders. Abhishek Banerjee, a prominent TMC leader, labelled the budget both a failure and a bribe. He argued that the budget seemed designed to appease coalition partners and buy time before the “government implodes.” Similarly, West Bengal Chief Minister Mamata Banerjee criticised the budget as “politically biased and anti-poor,” expressing concern that it neglected the interests of West Bengal and failed to address the needs of the impoverished. Such pointed critiques highlight the deep dissatisfaction with the budget’s perceived favouritism towards wealthy interests and big corporations.
Congress leaders also voiced their discontent. SupriyaShrinate expressed disappointment, accusing the government of being in denial about existing problems and highlighting the budget’s lack of provisions for common people, employment, agriculture, and women. Manish Tewari raised concerns about the fiscal deficit, describing it as “extremely worrying” and emphasising the need for greater attention to this issue. Manickam Tagore pointed out the double blow dealt to the poor and small businesses by COVID-19 and the government’s GST implementation, criticising the budget for failing to address these challenges.
Such criticism underscores a broader narrative of disillusionment with the budget’s approach, suggesting that it may have fallen short in addressing the pressing needs of various sectors and vulnerable populations.
Concerns of Renowned Economists
Renowned economists have voiced concerns over the Union Budget 2024-2025, highlighting both potential benefits and critical shortcomings. While some measures aim to extend the benefits of urban growth to rural areas, such as indirect income transfers, these are seen as insufficient to bridge the economic divide.
Fitch’s Prathamesh Sinha emphasised that the growth benefits currently accrue mainly to the top 50 percent in urban India, underscoring the need for targeted investments in rural regions. Despite a noted increase in female participation in the rural workforce, this growth remains predominantly in low-wage, seasonal agricultural jobs.
Hedonova’s CIO Suman Banerjee pointed out a concerning trend: although female unemployment has decreased, male unemployment has risen, reflecting a broader economic imbalance. The finance minister highlighted rising women’s enrolment in higher education and STEM courses, yet former central bank governor RaghuramRajancriticised the budget for not adequately fostering human capital.
Rajan and other economists, including Sinha and Banerjee, expressed concern over the absence of comprehensive employment data in the past decade, with Rajan stating, “We are flying blind without credible data on jobs.” While he recognised the budget’s emphasis on vital areas such as education, skills development, and agriculture, he contended that it does not allocate sufficient resources to tackle these issues effectively.
Recommendations for an Inclusive Budget
- Restore and Increase Allocations for Minority Affairs
– Reverse the Cuts: The drastic reduction in the MoMA budget must be addressed urgently. We recommend restoring funding to at least 1% of the total budget, as originally expected. This allocation is crucial for implementing schemes that empower minorities, including Dalits.
– Targeted Educational Initiatives: Specifically, allocate funds to programs like Pre-Matric and Post-Matric Scholarships, the Maulana Azad National Fellowship, and NaiManzil. These initiatives directly impact educational access and skill development among minority students and professionals.
- Strengthen Health and Education Allocations
– Prioritise Health: Increase the budget for health to meet the recommended 4% of GDP. Dalits, like all citizens, deserve quality healthcare services. Adequate funding can address existing disparities and improve health outcomes.
– Boost Education Spending: Elevate education spending to the recommended 6% of GDP. Quality education is a pathway out of poverty and marginalisation. Invest in schools, scholarships, and vocational training for Dalit youth.
- Address Unemployment and Social Safety Nets
– Expand MGNREGA: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) plays a critical role in providing employment opportunities. Rather than slashing its allocation, consider expanding MGNREGA to create jobs and alleviate rural distress.
– Protect Subsidies: Reconsider cuts to food, fertiliser, and petroleum subsidies. These safety nets are essential for vulnerable populations, including Dalits. Balancing fiscal prudence with social welfare is crucial.
- Transparent and Equitable Taxation
– Wealth Tax: Introduce a progressive wealth tax to ensure that the burden of funding welfare programs does not fall disproportionately on the poor. Wealthy individuals and corporations should contribute their fair share.
– Simplify Indirect Taxes: Streamline indirect taxes to reduce the impact on the middle class. A fair tax system promotes economic stability and social justice.
- Concrete Plans for Dalit Welfare
– Specific Allocations: While overall allocations for the Ministry of Social Justice and Empowerment increased marginally, specific schemes for Dalit upliftment need proportional increments. Ensure targeted funding for scholarships, skill development, and entrepreneurship programs.
– Collaborate with Dalit Organisations: Engage with Dalit-led organisations to design effective policies. Their insights and experiences are invaluable in creating meaningful change.
Wrapping-up
The Union Budget 2024-2025, while aiming for overall economic growth and development, must prioritise the interests of Dalits, Muslims, and other vulnerable groups through adequate funding, targeted initiatives, and effective implementation of schemes. Ensuring proportional allocations, addressing implementation gaps, and introducing focused programs can promote inclusive growth and social justice, uplifting the marginalised and ensuring their equitable development in India. By adopting these measures, we can transform the budget into a powerful tool for progress, genuinely fulfilling the promise of “Sab kaVikas” (development of all).
[The writer is Assistant Secretary, Jamaat-e-Islami Hind]