UNION BUDGET 2022-23, Too Little for Social Sector Development

In this analytical article Dr. Jawed Alam Khan gathers that the total union budget expenditure as a proportion of the GDP has declined to 15.3 per cent in 2022-23 from 16.2 per cent in 2021-22. Such a drop is, by default, accompanied by a negative impact on social and economic sector spending.

The economic survey projects real gross domestic product (GDP) to grow by 8 to 8.5 per cent in 2022-23.  Union Budget 2022-23 was presented in the wake of rising unemployment, high inflation, low consumption demand and growing inequality in the country. However, finance minister Nirmala Sitharaman, in her budget speech, did not mention a single word on these pressing problems the country is facing. She said this budget will provide impetus to long-term growth through a range of priorities: the PM Gati Shakti, inclusive development, productivity enhancement and investment, sunrise opportunities, energy transition and climate action and financing of investments in heavy industries, road, port, airport and technology with sab ka paryas.

Along with these big announcements, the finance minister has not mentioned any step to double the farm income in the budget. In fact, agriculture and allied activities which support the bulk of population has seen a marginal increase of just two per cent in this budget. Yet, the share of the agriculture budget in the total budget allocation has gone down from 4.26 per cent in 2021-22 to 3.84 per cent in 2022-23.

How can we ignore MGNREGA while speaking of the economic life in the countryside? The budget allocation for the flagship rural employment guarantee scheme has seen a dip of 25 per cent in this budget from the revised estimates of 2021-22. The allocation declined to Rs. 73,000 crores from Rs 98,000 crores.  Besides, a pending wage of Rs 21,000 crore continues to be a matter of concern. Higher allocation could have boosted consumption demand and could have raised employment opportunities in rural areas. This was especially needed in the wake of the COVID-19 pandemic and the uncertainties of employment in the coming year.

Similar trends have been observed in the budget’s allocations for other social sector schemes as well. The budgets for education, health and investments for improving the lives of the marginalised sections of society like schedule castes, tribal communities, religious minorities, women, children and persons with disabilities have been similarly neglected.

A look at other social sectors shows a similar trend of pompous words in a budget speech but with little budgetary outlay to support these. For instance, in terms of the universalisation of quality education, the One class One TV channel programme is to be expanded to 200 television channels. But the question remains, how does the budget propose to achieve this?

In the same breath, several announcements were made under the health budget, like the national digital health ecosystem, national tele-mental health programme, integrated security architecture: mission shakti, mission vatsalya, saksham anganwadi, and poshan 2.0. (Saksham Anganwadi will  lead to the upgrading of two lakh Anganwadis). However, these announcements are not backed by adequate budgetary provision. The total union budget expenditure as a proportion of the GDP has declined to 15.3 per cent in 2022-23 from 16.2 per cent in 2021-22. Such a drop is, by default, accompanied by a negative impact on social and economic sector spending.

The mid-day meal scheme, we are now told, has been renamed as PM Poshan Shakti Nirman with reduced allocation of Rs 10,233 crore from last year’s allocation of Rs 11,500 crore. During the pandemic, it will affect the child retention rate as well as nutrition. India ranked 101 out of 116 countries in the global hunger index – a score calculated on the basis of important nutrition, especially child nutrition figures provided by the Government of India.

There is, however, a slight improvement in the school education budget at Rs 63.499 crores in 2022-23. This is up from last year’s budget of Rs 54,873 crore, even if it is a mere six per cent of nominal increase compared to the budget estimates for 2021-22. Let us not forget that India’s low spending on education is an important factor that leads to India’s poor human development index (HDI) ranking at 131 out of 189 countries.

In terms of fund flow towards religious minorities, the PM New 15-Point Programme has certain features similar to those of the Scheduled Castes Sub Plan (SCSP) and Tribal Sub Plan (TSP) strategies. As per the provisions under the 15-Point Programme, 15 per cent of funds should be allocated in development programmes wherever it is possible (for the development of minorities). However, while allocating funds, the proportional share of minorities in total population was not taken into consideration which is 21% as per the Census 2011. Largely, the resource allocation made through 15-Point Programme for minorities has been a mere reporting exercise by select ministries and departments for booking some parts of expenditure under their general schemes as expenditure benefitting minorities. Further, in the Centrally Sponsored Schemes and Central Sector Schemes, specific provisions for minorities have usually not been introduced in the guidelines. Since the last few years, disaggregated data on minorities with regard to their shares in public sector employment, credit facilities and budgetary allocations by line Ministries and departments is not being reported under the 15-Point Programme. The total expenditure reported for minorities by the Union Government through 15-Point Programme and MSDP have shown declining trends, as proportions of the total Union Budget expenditure, since 2012-13.

UNION BUDGET RESOURCES ALLOCATED FOR MINORITIES

In the Budget Speech for 2022-23, no new scheme has been announced for the development of minorities nor have minorities been mentioned. There is a hike of 4 per cent in this Union Budget from the previous year’s budget (an increase of Rs 210 crore) for the Union Ministry of Minority Affairs based on a small increase in allocations for the PMJVK/ MSDP. The total budget of the Ministry as a proportion of the total Union Budget, however, has declined to 0.12 per cent in 2022-23 (BE) from 0.14 per cent in 2021-22 (BE).

Union Budget Resources allocated for Minorities, SCs, STs and Persons with Disabilities

The Minority Affairs Ministry’s budget has been increased from Rs 4820 crore in 2021-22 (BE) to Rs 5,010 crore in 2022-23 (BE), while the 2021-22 (RE) figure stands at Rs. 4246.05 crore. The Ministry has utilised Rs 3920.29 crore in 2020-21 (Actuals) against the BE figure of Rs 5029 crore for that year.  It also seems that the Union Budget outlays have not been provided in accordance with the demands for funds made by the Ministry. For 2019-20 and 2020-21, Rs 4,700 crore and Rs 5,029 crore were allocated against the demands from the Ministry for Rs 5,795.26 crore and Rs 6,452 crore, respectively.

In this budget, the schemes relating to Post-Matric Scholarship for Minorities, Merit Cum Means Scholarships and Pradhan Mantri Jan Vikas Karyakram (PMJVK) have seen small increases in allocation from the previous year’s budget, while several other schemes (like, skill development and women leadership schemes) have seen declines in allocation. The budget allocation for the Maulana Azad Education Foundation (MAEF) has been reduced to Rs 0.01 crore from Rs 90 crore in 2021-22, which will affect the implementation of projects like construction grant to minority institutions and Begum Hazrat Mahal Scholarship Scheme for meritorious girls.

The Education Scheme for Madrasas and Minorities, which had been shifted to the Minority Affairs Ministry from the Ministry of Education last year, has received a reduced budget outlay of Rs 160 crore this year (compared to Rs 174 crore in 2021-22). This might affect the education of children in Madrasas due to non-payment of honoraria to teachers. The Ministry of Education has reported Rs. 310.22 crore in the Revised Estimates of 2020-21 for this scheme. The scheme provides financial assistance to introduce modern subjects in Madrasas, teachers’ training and augmenting school infrastructure in minority institutions.

Table 1:

Budget Allocation and Utilisation of Select Schemes Under the Ministry of Minority Affairs

(Rs crore)

Source: Compiled by CBGA from Note on Demand for Grants, MoMA.

IMPLEMENTATION ISSUES IN SCHOLARSHIP SCHEMES FOR MINORITIES

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 costs due to inadequate allocations of funds. Mostly, the utilisation of the budget under the scholarship schemes appears to be getting done in the last quarter of financial year; the following table shows that utilisation in the first three quarters was only 19 per cent i.e., by December, 2020. Thus, the beneficiary students might be receiving the scholarships only towards the end of the academic year.

Status of Budget Allocation and Utilisation of Select Scholarship Schemes in 2020-21

(Rs crore)

The Union Government promised to give one crore scholarships to minorities annually under an umbrella scholarship programme in 2019. As against this benchmark, only 58 lakh students received the scholarships provided by the Ministry of Minority Affairs (Pre-matric, Post-matric and Merit-cum-Means scholarship schemes) in 2020-21. During the same year, approximately 1.10 crore applications were received for the scholarships. It shows that 47.5 per cent of total applicants were deprived from the scholarship benefits. As regards the Post Matric Scholarship scheme, only 36.7 per cent of total applicants received the scholarship that year.

Status of Implementation of Scholarship Schemes in 2020-21

The amounts of scholarships given to the students is not adequate for meeting their educational expenses. The unit cost for scholarships in Pre-Matric, Post-Matric and Merit-cum-means has not been revised since inception of the schemes (2007-08). For instance, only Rs. 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 Rs. 7000 per annum in terms of admission and tuition fee for classes XI and XII and maintenance allowance of Rs. 380 and Rs. 230 per month for hostellers and day scholars, respectively. A course fee of Rs. 20,000 per annum is reimbursed to students studying in other institutions. Besides, the amount provided maintenance allowance is a meagre Rs. 500 per month for the day scholars and Rs. 1000 per month for the hostellers.

In Union Budget 2022-23, the total allocation reported for SCs in statement 10A is Rs 142342.36 crore, which has increased from Rs 1,26,259 crore in 2021-22 (RE) i.e. an increase by over Rs. 16000 crore.  The total allocation for the Department of Social Justice and Empowerment has seen an increase of 13 per cent from the previous budget because of a substantial increase in the outlay for the scheme on Post Matric Scholarship for SC (PMS-SC). However, under Centrally Sponsored Schemes (CSS) and Central Sector Schemes (CS), the outlays earmarked for SCs (as per statement 10A) account for only 8.8 per cent of the total budgetary allocation.

In the 2022-23 Budget estimates, Rs. 5660 crore was announced which was as per expectations. However, even after increase in allocation, the current scholarship amount under the maintenance/academic category is not sufficient to meet the actual needs of students. It now ranges from Rs 4,000 to Rs 13,500 for ten months in an academic year for hostellers and Rs 2,500 to Rs 7,000 for day scholars for ten months, as compared to the previous range of Rs 3,800 to Rs 12,000 for ten months for hostellers and Rs 2,300 to Rs 5,500 for day scholars for ten months under by the PMS-SC scheme guidelines of 2010. The parental/ family income-ceiling required to be eligible for the scheme, has not been revised for eight years, and therefore does not factor in inflation. The parental/ family income eligibility criteria were revised from Rs 1 lakh per annum to Rs 2 lakh per annum in 2010, and then to Rs 2.5 lakh per annum in 2013-14.

Until 2021-22, two separate Pre-Matric scholarship schemes (for SCs and unclean and hazardous occupation respectively) used to be implemented for Classes 9th and 10th only so that dropouts especially in the transition from the elementary to the secondary stage are minimised. Now these two schemes have been merged and renamed as Pre-Matric Scholarship Scheme for SCs and others. After merger, the budgetary allocation for this scheme has got reduced from Rs 725 crore in 2021-22 (BE) to Rs 500 crore 2022-23 (BE).

The important policy strategy of Tribal Sub-Plan (TSP) has, since long, been facing challenges with regard to planning, implementation and monitoring. Under TSP, the expenditure across many Ministries is reported ‘notionally’ instead of being based on need-based plans along with active participation of the community. There is poor monitoring of the implementation of TSP due to lack of dedicated monitoring units at the state and district levels. The allocation reported for STs in statement 10B is Rs 89265.12 crore in 2022-23 (BE). The total allocation for the Ministry of Tribal Affairs has seen an increase of 12 per cent from the previous year’s budget because of increase in the allocation of fund for Eklavya Model Residential Schools. However, 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 which is less than the previous year.

The Union Government should allocate adequate budget to social sector for addressing the current economic challenges faced by the country. Further, the planning, implementation and monitoring challenges persisting in TSP need to be addressed urgently. The allocations to the Ministry of Social Justice and Empowerment and the Ministry of Tribal Affairs need to be increased for the economic and educational empowerment of SCs and STs. The current income ceiling limit and unit cost of PMS-SC scheme needs to be revised taking into account the effect of inflation over the years. There is a need for complete and credible identification of all the manual scavengers in the country; and, the Government should 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 guidelines of CSS covered under the 15-Point Programme should allow for appropriate or customised interventions for development of minorities by identifying the development gaps in minority concentrated localities and areas. The design of 15-Point Programme is not appropriate in terms of comprehensive coverage of the minority population and addressing their development needs until and unless government initiates/designs some targeted schemes/ programme for minorities. In this respect, instead of the current provision of 15% of fund allocation under 15-Point Programme, the resource allocation should be made as per the diverse needs of minority communities across different sectors.  Further, the scholarships should be made demand driven along with the additional financial resources for enhancing the unit costs. The total budget allocation for the Ministry of Minority Affairs should be significantly increased, given the level of deprivation in the educational attainment of minorities.

[The writer works with Centre for Budget and Governance Accountability and is Advisor to Institute of Policy Studies and Advocacy, New Delhi]