Union Budget 2021-22: A Step Backward

The Union Budget 2021-22 was presented in the wake of the worsening economic condition, low consumption demand and high unemployment due to pandemic and subsequent lockdown. The negative impact of pandemic has shown that Gross Domestic Product (GDP) has seen the sharpest decline since 1952. In 2020-21, GDP would shrink by 7.7 per cent. During the pandemic, the Union Government had already announced Pradhan Mantri Garib Kalyan Yojana and Aatma Nirbhar packages. Both the packages committed to provide the additional amount of 3-4 lakh crore to address the several challenges during the pandemic. However, these packages have not achieved much desired result on the ground level. The pandemic has created humanitarian crisis and socio-economic inequalities, severely affected the disadvantaged section of the population. The pandemic has also made the situation worse as the revenue collection front has a direct impact in terms of budget cuts on economic and social sector services.

In the given situation, a lot of expectation was expressed from different stakeholders in terms of bold policy measure and adequate budgetary allocation from the Union Budget 2021-22. Finance Minister, in her budget speech, gave more focus on creating heavy infrastructure in poll-bound states, privatisation of public sector institutions and COVID related vaccination programme. She did not discuss at all for the specific intervention pertaining to generating employment and boosting the consumption expenditure among general population.

A large section of the poor Indian population fully depends on public sector provisioning for essential services such as healthcare, education, nutrition, drinking water and sanitation. The level of budgetary support for social sectors has been lagging behind not only most of the developed countries but also a large number of developing countries. The budgetary allocations for rural areas in this budget show declining trend as compared to the budget provisions for the last year. Both agriculture and rural developments have witnessed a budget cut as compared to previous year’s budget estimates.

Like all previous Union Budgets, this budget too has not given much focus to allied services despite the fact that allied services contribute a significant share of rural income especially to rainfed/dryland regions. As for coverage of PM-KISAN and making it inclusive for landless farmers, tenants and women farmers, the Union Budget support towards this scheme has been reduced by ₹10,000 crore in the figures for 2021-22. Further, MGNREGA has witnessed a reduction in budget provision for FY 2021-22 by ₹38,500 crore compared to the ₹1,11,500 crore allocation in the RE for 2020-21.

The pandemic has disproportionately affected the most marginalised – women, transgender persons, children, Dalits, Adivasis, Muslims, and persons with disabilities among these population groups. The importance of strengthening public provisioning for these groups has never been on high priority and the Union Budget 2021-22 was expected to respond to such expectations adequately. The following sections have highlighted the budgetary priorities for minorities, SCs and STs.

BUDGETARY ALLOCATIONS FOR RELIGIOUS MINORITIES

The large section of religious minorities, particularly Muslims, in India has been lagging behind on certain indicators pertaining to educational attainment, gender equality and workforce participation. It is found that Muslims account for the highest proportion of out of school children (4.43 per cent) in the country. The large proportion of Muslim households in urban areas working as casual labour, along with self-employed people comprises the dominant income source in the community at 15 per cent and 50 per cent, respectively (68th Round of the National Sample Survey).

For development of minorities, there have been two policy strategies, namely the Prime Minister’s New 15-Point Programme (15 PP) for welfare of minorities and the Area Development Programme or Multi Sectoral Development Programme (MSDP), since 2006 and 2008, respectively. MSDP was renamed Pradhan Mantri Jan Vikas Karyakram (PMJVK) in 2018. With regard to activities, the 15-point programme for the welfare of minorities focuses on enhancing opportunities for education, an equitable share in economic activities and employment, improving living conditions, and prevention and control of communal riots. Except MSDP/PMJVK, all the schemes run by the Ministry of Minority Affairs (MoMA) are also part of 15 PP, and meant 100 per cent for the development of minorities.

In Union Budget 2021-22, the Finance Minister made no mention about the budgets for welfare of minorities and no new scheme has been announced for their development. A Ministry of Education scheme, known as Scheme for Madrasas and Minorities, has been shifted to MoMA with a reduced allocation of ₹174 crore. The Ministry of Education has reported a figure of ₹310.22 crore in the RE of 2020-21 for the scheme, which provides financial assistance to introduce modern subjects in Madrasas, train teachers, and augment school infrastructure in minority institutions. Only ₹70.94 crore of the funds allocated to the scheme was utilised against ₹120 crore in 2019-20, affecting the education of children in Madrasas due to non-payment of honorarium to teachers.

AVAILABILITY OF TOTAL FINANCIAL RESOURCES FOR MINORITIES

With regard to availability of resources for minorities, the Ministry of Finance has not allocated the same in accordance with the MoMA demand. For 2019-20 and 2020-21, ₹4,700 crore and ₹5,029 crore were allocated as against the demand of ₹5,795.26 crore and ₹6,452 crore, respectively, made by MoMA. The reduction in the budget demanded by MoMA has affected the scholarship schemes. The budget for minorities accounts for 0.14 per cent of the total Union Budget in 2021-22, whereas religious minorities constitute 21 per cent of the total population. Further, there is a decline of 4.5 per cent in this budget from the previous year’s budget. Also, the MoMA budget has been reduced from ₹5,029 crore (BE) to ₹4,005 crore (RE) in 2020-21.

Figure 1: Total Budget Allocation and Utilisation under Ministry of Minority Affairs (Rs crore)

Source: Note on Demand for Grants, MoMA.

The following table shows that in this budget, Merit Cum Means Scholarships, Post-Matric Scholarship for Minorities and the Maulana Azad Fellowship have declined from the previous year’s budget, while the rest of the schemes have received a marginal increase.

Table 1: Budget Allocation and Utilisation of Select Schemes Under the Ministry of Minority Affairs (Rs crore)

Source: Note on Demand for Grants, MoMA.

Major Challenges in the Implementation of Scholarship Schemes

POOR QUALITY OF FUND UTILISATION

Religious minorities, particularly Muslims, require special attention in the area of educational and economic empowerment. The Pre-matric, Post-matric and Merit-cum-Means scholarship schemes face implementation issues with poor coverage of beneficiaries and low unit cost.

The Union Government promised to give one crore scholarships to minorities annually under an umbrella scholarship programme. However, only 66 Lakh students received the scholarships in 2018-19 by MoMA. During the year 2018-19 approximately 73.37 lakh applications were received only for fresh Pre-matric scholarships. For the same year, 17.45 lakh applications were received for fresh Post-matric scholarships.

Although utilisation of the budget under the scholarship scheme improved by the end of the 2019-20 financial year, the following table shows that the percentage of utilisation until January 2020 was poor. Large amounts were utilised in February and March. It thus becomes clear that students are receiving the scholarships only at the very end of the academic year.

Table 2 : Status of Budget Allocation and Utilisation of Select Scholarship Schemes (Rs crore)

Source: Standing Committee on Social Justice- Demand for Grants, Ministry of Minority Affairs -2020-21.

LOW UNIT COST FOR SCHOLARSHIP SCHEMES

The unit cost for scholarships of Pre-Matric, Post-Matric and Merit-cum-means has not been revised since inception of the schemes (2007-08). Only ₹1000 per annum is provided to the day scholars in Pre-Matric Scholarship Scheme. The scheme for post matric scholarship provides the financial support of ₹7000 per annum in terms of admission and tuition fee for classes XI and XII and maintenance allowance of ₹380 per month and ₹230 per month for hostellers and day scholars respectively. Only 85 institutes for professional and technical courses have been listed in the Merit Cum Means scheme. A course fee of ₹20,000/- per annum is reimbursed to students studying in other institutions. Besides, a student is also provided meagre amount for maintenance allowance as ₹500 for the day scholar or ₹1000 for the hostellers per month. The number of scholarships given to the students found to be inadequate for meeting their educational expenses. The unit cost for scholarship schemes for minorities should be increased and inflation-indexed. Further, the scholarship should be made demand driven along with the additional financial resources.

HOW HAVE INTERVENTIONS FOR THE SCHEDULED CASTES BEEN BUDGETED IN 2021-22?

Through its key policy document, ‘Strategy for New India @ 75’, the Union Government has made a renewed commitment to accelerate the socio-economic development of Scheduled Castes (SCs), Scheduled Tribes (STs) and safai karamcharis. It has promised to have focused affirmative action to bring these deprived communities on par with the rest of the population as far as key human development indicators are concerned.

According to the Strategy document, there is high incidence of poverty and low educational attainment faced by weaker sections of the population, which is the major challenge before the government. Further, these communities have high levels of malnutrition and limited opportunities for meaningful economic engagement.

Isolation, exclusion, occupational subjugation and poor governance have been the major impediments to socio-economic development of SCs and STs. The benefits of resource distribution of the scheduled caste sub-plan (SCSP) and tribal sub plan (TSP) have reached few, mainly due to problems of convergence, poor scheme design and lack of an adequate institutional mechanism for implementation and monitoring of SCSP and TSP.

In Union Budget 2021-22, the outlays earmarked for SCs (as per statement 10A) account for only 8.8 per cent of the total budgetary allocation under Centrally Sponsored Schemes (CSS) and Central Sector Schemes (CS). The total allocation reported for SCs in statement 10A is ₹1,26,259 crore in 2021-22 (BE). Compared to the previous year, there has been a substantial jump owing to the strategy of Allocation for Welfare of Scheduled Castes. However, the total allocation for the Department of Social Justice and Empowerment has seen a marginal increase.

POST MATRIC SCHOLARSHIP FOR SCs

PMS-SC is an important scheme implemented by the Department of Social Justice and Empowerment. The scheme provides financial assistance of ₹18,000 per annum to Scheduled Caste students of classes 11 and 12 to enable them to pursue post matric education.

It been announced that ₹35,219 crore will be provided for the next six years until 2025-26. While the expectation was there would be a significant annual increase in the outlays, the amount of ₹3,415.62 crore allocated for 2021-22 is below expectations. This is also less than the ₹3,815.87 crore budgeted in 2020-21(RE). It must also be pointed out that there are various issues affecting the implementation of PMS-SC, such as accumulated arrears, absence of an annual action plan, non-revision of the income ceiling, low disbursal of funds in certain components of the scholarship, inadequate scrutiny and processing of applications, and poor disbursal of scholarships to students.

Table 3: Budgetary Priority for Post Matric Scholarships for SCs (Rs Crore)

Source: Compiled by CBGA from Union Budget Documents, various years.

Self-Employment Scheme for Liberation & Rehabilitation of Scavengers (SRMS)

The Central Sector scheme called ‘Self-Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)’ was revised in November, 2013, to work in consonance with the provisions of the ‘Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013’ (MS Act, 2013). SRMS has to provide: (i) one-time cash assistance of ₹40,000 to the identified manual scavenger; (ii)  loans up to ₹15 lakh at a concessional rate of interest; (iii) a credit-linked back-end capital subsidy up to ₹3,25,000 (iv) skill development training up to two years with a stipend of ₹3,000 per month.

An examination of the trends shows there was zero utilisation against the allocations from 2014-15 to 2016-17. However, a gradual increase in fund utilisation was observed from 2017-18 to 2019-20.  After the National Survey on Manual Scavengers in 2018, the allocation has increased but with reference to the number of manual scavengers identified in 2018, it remains inadequate.

Table 4 : Status of Budget Allocation and Fund Utilisation under SRMS (Rs Crore)

Source: Compiled by CBGA from Union Budget Documents, various years

Complete and credible identification of manual scavengers has been among the biggest challenges in the scheme. Furthermore, there are about 26 lakh unsanitary latrines in the country (Census, 2011), which suggests the existence of a sizeable number of manual scavengers. As per revised SECC-2011 data, there are 168,066 self-declared manual scavengers in rural areas. However, no SECC-2011 data relating to urban areas has been made available.

The latest National Survey on manual scavengers was conducted in 2018, and identified 42,303 manual scavengers, which is only about 25 per cent compared to RGI and SECC data. Even after two years of completion of the national survey, of the total identified manual scavengers, only 62 per cent have received the One Time Cash Assistance (OTCA); 3 per cent of the total got skill development training and 0.4 per cent have been given a capital subsidy. Abysmally low achievement against skill development training and capital subsidy disbursal indicates that the government has not been able to fulfil the long-term objectives of rehabilitation of manual scavengers in terms of enabling sustained livelihoods.

BUDGETING FOR SCHEDULED TRIBES

In Union Budget 2021-22, the outlays earmarked for STs (as per statement 10B) account only for 5.5 per cent of the total budgetary allocation under Centrally Sponsored Schemes and Central Sector Schemes. The allocation reported for STs in statement 10B is ₹79,941.62 crore in 2021-22 (BE).

Compared to the previous year, there has been a substantial jump owing to the strategy of Allocation for Welfare of Scheduled Tribes. However, the total allocation for the Ministry of Tribal Affairs has seen a marginal increase. In this budget the Finance Minister has made an announcement on establishing 750 Eklavya model residential schools in tribal areas. There is an increase in the unit cost of each such school from ₹20 crore to ₹38 crore, and for hilly and difficult areas to ₹48 crore. It will create a robust school infrastructural facility for tribal students. However, given the scale of the proposition, allocation of ₹1,418 crore for the scheme is inadequate.

IMPORTANT CHALLENGES IN THE IMPLEMENTATION OF TSP

The Tribal Welfare Department, the nodal Department for welfare of STs, as well as institutional development initiatives such as the Integrated Tribal Development Project (ITDP)/Integrated Tribal Development Agency (ITDA) and Tribal Research Institutes (TRI) are weak in terms of human resources and financial powers. Further, there is no robust mechanism for inter-departmental coordination and convergence of resources with line departments. Mostly, the head of ITDA/ ITDP/ TRI is not a dedicated senior officer but someone performing these duties as an additional charge. Under TSP, the expenditure is booked notionally instead of as a need-based plan formulation. There is no monitoring system for TSP through a dedicated monitoring unit in the states (Ministry of Tribal Affairs, Standing Committee on Social Justice and Empowerment – 2018-19).

The allocations to the Department of Social Justice and Empowerment and Ministry of Tribal Affairs need to be increased for the economic and educational empowerment of SCs and STs. The implementation challenges persisting in TSP must be addressed urgently. Furthermore, there is a need to increase the allocation for PMS-SC to clear the arrears accumulated over many years. There is a need for identification of all the manual scavengers in the country. The government has to make necessary changes in the SRMS Guidelines to address the bottlenecks constraining utilisation of the allocated budgets.

Further, an increase in demand can be created by raising awareness about the scheme among potential beneficiaries as well as within the government apparatus.  It is suggested that the total budget allocation for MoMA should be significantly increased, given the level of deprivation in the educational attainment of minorities. The hike in total budget allocation of MoMA would help increase the coverage of students and raise the unit cost in Pre-Matric, Post Matric and Merit Cum Means Scholarship.

[The author works for CBGA and advisor to IPSA, New Delhi. https://www.cbgaindia.org/wp-content/uploads/2021/02/Budget-in-the-Time-of-Pandemic-An-Analysis-of-Union-Budget-2021-22.pdf]