Budgeting is an annual exercise to prepare a detailed roadmap for effective use of public resources and removing the socioeconomic and regional disparities in the country. Union Budget 2017-18 was presented in the backdrop of global economic slowdown, downturn in the Indian economy, demonetisation and restructuring in the budgetary processes. Many of these have negatively impacted the growth of rural, informal economy and industrial production; consequently a situation of low demand in the economy and unemployment has emerged. The NDA government promised in its election manifesto to create 2 crore jobs annually but it was able to manage only 1.5 lakh jobs during 2015-16, which is far behind the annual target.
Finance Minister (FM) in his budget speech claimed that this budget is going to move the Indian economy in the long term. To quote the FM, demonetisation would lead the economy towards “reduced corruption, greater digitisation of the economy, increased flow of financial savings and greater formalisation of the economy, all of which would eventually lead to higher GDP growth and tax revenues”.
Many economists and columnists countered the views expressed by FM and argued that demonetisation had an adverse impact on the economy in the medium term and hit the weaker section of the society. It caused hardships for people engaged in the informal economy, small business and farmers. FM has not come out with any comprehensive plan in the budget for boosting the demand and creation of employment in the country.
In this backdrop, projections of GDP growth by Global Financial Institutions have shown possible deceleration in the rate of GDP growth. In this situation mobilisation of private and public investment is required to boost the production and demand in the economy. As for the total Union government expenditure as a proportion of GDP, it has come down to 12.7 per cent of GDP in 2017-18 from 13.4 per cent in 2016-17 RE. It clearly shows that the budget missed the opportunity of fiscal expansionary path. With regard to social sector spending, it has been observed that after the implementation of the Fourteenth Finance Commission (FFC) recommendations, allocations for social sectors in the Union budget have shown the declining trend. The matching share for States in flagship programme has been raised and regional disparities in social sector spending among States are also there.
SOCIAL SECTOR SPENDING
Many Sate governments have relied upon a host of flagship programmes for their social sector development because they do not have such kind of large-scale programme in the State plan. In the Union budget allocations for several flagship programmes have been protected at almost similar levels as in the last year; Sarva Shiksha Abhiyan outlays are estimated to increase by a mere ₹1,000 crore in 2017-18 (BE), from ₹22,500 crore in 2016-17 (RE). The allocation for Rashtriya Madhyamik Shiksha Abhiyan also has an insignificant increase from ₹3,700 crore in 2016-17 (RE) to ₹3,830 crore in 2017-18 (BE). The allocation for Mid-Day Meal scheme has seen a very small increase from ₹9,700 crore in 2016-17 (RE) to ₹10,000 crore in 2017-18 (BE). There is minimal rise in allocation for National Rural Drinking Water Programme from ₹6,000 crore in 2016-17 (RE) to ₹6,050 crore in 2017-18 (BE); the outlay for Pradhan Mantri Gram Sadak Yojana remains stagnant at ₹19,000 core, and the budget for MGNREGA in 2017-18 (BE), at ₹ 48,000 crore, has been protected as its outlay in 2016-17 (RE) was ₹47,499 crore.
The allocation under National Social Assistance Programme (which covers old age pension, widow pension and disability pension schemes) at ₹9,500 crore in 2017-18 (BE) too has been protected at the same level as 2016-17 (RE). For Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the allocation for 2017-18 (BE) at ₹5,000 crore shows the minuscule increase from the 2016-17 (RE) outlay of ₹ 4,883.5 crore.
A handful of programmes have witnessed a visible hike in outlay in 2017-18 (BE) as compared to 2016-17 (RE). The allocation for Pradhan Mantri Awas Yojana has gone up from ₹20,936 crore to ₹29,043 crore; Pradhan Mantri Krishi Sinchai Yojana has been stepped up to ₹7,377 crore from ₹5,189 crore, Swachh Bharat Mission saw a rise to ₹16,248 crore from ₹12,800 crore, National Health Mission has been allocated ₹27,131 crore as against ₹22,598 crore in the revised estimates, Pradhan Mantri Swasthya Suraksha Yojana jumped to ₹3,975 crore from ₹1,953 crore, National Nutrition Mission got a boost from ₹175 crore to ₹1500 crore and Maternity Benefit Programme increased from ₹634 crore to ₹2,700 crore. But these increases fall short of the resource required. For instance, the allocation proposed for the key Maternity Benefit Scheme seems to be based on an underestimation of the number of beneficiaries. This budget, like in the previous year, has slightly focused on rural sanitation, while allocations for urban sanitation have remained stagnant. As far as budgetary allocation on education and health are concerned, promises of 6 per cent and 3 per cent of GDP on education and health are still a distant dream. In the wake of a slowdown in the production and employment in agriculture and manufacturing sectors at present, an expansionary fiscal policy was expected from this budget. Also, given the push being made to expedite fund flow and improve utilisation of resources; the Finance Ministry should have increased the budgetary priority for these important interventions.
BUDGETARY ALLOCATION FOR MARGINALISED COMMUNITIES
In India, the development status of certain sections of the population has been lagging behind that of other sections of the society. Scheduled Castes (SCs), Scheduled Tribes (STs), religious minorities, women and children comprise some of the major vulnerable or disadvantaged sections of the country’s population. They have lagged behind other sections of the population in terms of several development indicators due to a number of reasons, which include unequal social structures, identity issues, discrimination and exclusion on various bases such as religion, caste, gender, gaps and flaws in public policies and poor implementation of the government development interventions.
Since 1970s, the Government of India has recognised the need for making a distinction between ‘incidental’ benefits for a certain disadvantaged community and ‘direct’ policy-driven benefits for the community. This acknowledgment has led to the adoption of Plan strategies, like, the Special Component Plan for Scheduled Castes (SCP for SCs)/ Scheduled Caste Sub Plan (SCSP), the Tribal Sub-Plan (TSP) for Scheduled Tribes, and Women’s Component Plan (WCP) as well as budgetary strategies like Prime Minister’s 15-Point Programme (15 PP) for Minorities and Multi-Sectoral Development Programme (MSDP) for minorities. And, therefore, Central and State governments have been initiating different kinds of plan strategies to provide direct policy-driven benefits for the vulnerable sections by earmarking or channelizing certain minimum shares of public spending for vulnerable sections of population in the universal form.
RELIGIOUS MINORITIES
The Sachar Committee Report, 2006 found the Muslim community lagging behind other religious groups on several development indicators, which included identity issues, exclusion, flaws in public policies and poor implementation of government development interventions. In order to address the specific problems of backwardness among Muslims, the Sachar Report advocates special attention to developmental issues within the Muslim community in areas of education, economic development and access to basic amenities. Other general policy initiatives such as setting up a National Data Bank, an Equal Opportunity Commission (EOC) and constructing a Diversity Index were pushed to promote inclusion of excluded Muslims in public institutions. No headway was however made regarding actual implementation so far.
The Union government has been targeting few flagship programmes / schemes related to education, livelihood and access to public services, credit and skill development for minorities under PM New 15-point programme since 2006. Under the aegis of the Ministry of Minority Affairs (MoMA), new development schemes and programmes related to scholarship, community leadership and area development were devised, the most important one being Multi-Sectoral Development Programme (MSDP) as area development programme. Most of these government interventions are minority targeted rather than Muslim focused.
The MoMA is currently running the schemes related to education empowerment, skill and livelihood, special programmes for minorities and area development programmes like MSDP. The proposed allocation for MoMA in the 12th Plan was around 17000 crore, out of that around 15771 has been earmarked by the MoMA. The budget allocation for MoMA has been increased to ₹4195 crore in 2017-18 from ₹3827 crore in 2016-17, indicating an increase of 9 per cent. The budget of MoMA constitutes 0.2 per cent of total Union Budget whereas population of minorities accounts for more than 19 per cent of the total population. With regard to utilisation of funds of MoMA from 2012-13 to 2015-2016, it ranges from 68.9 per cent to 97.8 per cent and has shown improvement over the years.
Table 1
From the assessment of budgetary allocation for minorities under MSDP and 15-Point Programme, it is found that a large amount of total earmarked fund goes to education empowerment of minorities. The Table 2 shows the dropout rates among all Minority communities at different levels of education vis-à-vis other communities. It clearly reflects that the numbers of dropouts among Muslims are the highest among all groups. The departmentally related Standing Committee on Social Justice raised the concern on high dropouts despite having scholarship programmes, MSDP and 15-Point Programme are in operation for 8-10 years. NSSO has compiled information on never enrolled persons according to major religious groups (National Sample Survey Organisation’s Report No. 575 of January-June 2014: Education in India). The Committee tried to trace the real reasons behind the high dropouts among Muslims and requested MoMA to conduct a comprehensive study in this regard.
Table 2
DALITS AND ADIVASIS
Dalits and Adivasis have been deprived historically from the fruits of development (education, economic empowerment and basic amenities). Their standard of living has not improved much despite the implementation of SCSP and TSP and allocation for them through Department of Social Justice and Empowerment (DSJE) and Tribal Affairs (MoTA) for several decades. This year the budget shows a kind of incremental budgeting for Dalits and Adivasis. At the same time, allocations for DSJE have been ‘protected’ from previous levels, without any significant increases. There is thus a need to prioritise allocations for Dalits, across sectors through a revised SCSP, as well as increase the allocations for the nodal department for Dalits, i.e. DSJE. The allocations for MoTA too have remained almost stagnant, with only marginal increases over the years.
Table 3
From the above discussion, there is an urgent need for developing a framework for continued implementation of communities like SCSP, TSP and 15-Point Programme. Also a revised roadmap for earmarking funds for SCSP, TSP and 15-Point Programme by the Union government needs to be developed as need based. The revised framework and new benchmarks for earmarking funds should be developed through an open, consultative process, with adequate representation from all relevant stakeholders.
Also, there is a requirement of Promoting Need-based Planning at all level of governance. In addition to revising the guidelines on how the earmarking of funds would be carried out, there is a need to build an SC, ST and Muslims perspective, assumption and methodology in the schemes of the various Ministries. Each ministry/department should be encouraged to (i) identify what could be the additional challenges confronting these communities in their sectors of concern, (ii) what kind of measures could be taken by them to address these challenges, and (iii) how much additional resources would be required for such special measures. These additional resources devoted for the special measures for SC, ST and Muslims should then be reported under SCSP/TSP/ 15-Point Programme. The funds earmarked for SCSP, TSP and 15-Point Programme should not be used as supplementary resources for general purpose expenditure; these funds should be used for interventions/projects meant exclusively for SC, ST and Muslims.
[The writer works with CBGA, Advisor to IPSA, New Delhi. In doing this article, he benefited from the document “What Do the Numbers Tell? An Analysis of Union Budget 2017-18” (www.cbgaindia.org)]