Union Budget 2024-25: The Business as Usual for Social Sector

The NDA government presented its 11thfull budget in a row. During the general election, unemployment, inequality and inflationwere the major issues that impacted the results of the Lok Sabha Elections 2024. (The Lokniti-CSDS pre-poll survey, The Hindu, April 11, 2024). However, no serious efforts have been made to address the inflation and unemployment-related challenges in this budget.

Looking at the budget speech, a significant announcement wasthe three schemes called the ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These three schemesare not going to work in the short term because these are the supply side interventionsbased on the willingness of corporate sector,and only wage subsidies and skill development of labour components cannot solve the current unemployment crisis until and unless the government focuses on the demand side.

There was a rise in the unemployment rate from a little more than 2% in 2000 and 2012 to 5.8% in 2019. Unemployment reduced somewhat to 4.1% in 2022, although time-related underemployment was high at 7.5% (The India Employment Report (IER) 2024, published by the Institute for Human Development and the International Labour Organization). The time-related underemployment refers to all persons in employment who (i) wanted to work additional hours, (ii) had worked less than a specified hours threshold (working time in all jobs), and (iii) were available to work additional hours given an opportunity for more work.

Further, the analysis of major macroeconomic parameters of the NDA governmentalso shows that its performance is below average than the period of UPA government. The compound annual growth rate of GDP was 5.42% under NDA government as compared to the growth rate of 6.67% under UPA government. The growth rate of per capita income was also lower under NDA government (4.28%) as compared to the growth rate during UPA government (4.64%).

A major factor in the decline in growth rate was a sharp decline in the growth rate of gross fixed capital expenditure (GFCE) which came down to 6.94% from 9.56% during the UPA government. Another key factor in stimulating growth of the economy is exports of goods and services. There was a sharp decline in the growth rate of exports from 9.56% during UPA government to only 4.73% during NDA government. (Relative Economic Performance of UPA and NDA Governments, Ajit Kumar Singh, Mainstream, Vol 62 No 29, July 20, 2024).

One of major concerns is that there is a lack of availability of census data which is essential for sound policymaking and preparation of inclusive budget. Census 2021 has not started yet and no mention was made in this budget to initiate the process of conducting the Census. It has implications for the distribution of resources among states and marginalized community because we don’t have real pictures of demography and socio-economic and development status of different regions and marginalizedcommunities.

The social spending target in case of education, health, social security and marginalized groups of population remains almost stagnant in this budget,comparing with the previous year’s allocation. A number of schemes have seen decreased allocation.As a result, the unit cost services in severalflagship programmes are inadequate, looking at inflationary trends. The schemes includeNational Social Assistance Programme (Old Age Pension, Widow Pension/single women, Disability Pension), Poshan, Saksham Anganwadi, Samagr Shiksha, National Health Mission and MGNREGA.

When we talk about budget allocation for marginalized communities such as Minorities, ScheduledCastes,ScheduledTribes, Disable Persons,women and children, the situation is not very encouraging in this budget. The articlecovers the detailed budget analysis focusing on minorities, SCs and STs.

Religious Minorities

The Prime Minister’s New 15 Point Programme for the welfare of minorities and the Multi Sectoral Development Programme (MSDP)/Pradhan Mantri Jan Vikas Karyakaram (PMJVK), are two important policy strategies for the development of religious minorities, introduced in 2006 and 2008, respectively. Except for MSDP/PMJVK, all the schemes run by MoMA are also part of the 15 Point Programme, and meant 100 percent (in terms of budgetary support) for the development of minorities.

As per the 15 Point Programme guidelines, 15 percent of the funds should be allocated for the development of minorities in development programmes of general ministries, wherever possible. A perusal of the MoMAwebsite indicates that the financial resource allocation benefiting minorities has not been completely and timely reported under the schemes run by select general ministries and departments under the 15 Point Programme during the last 10 years.

Further, the revised guidelines of renamed or new Central Schemes over the last ten years lack specific provisions for minorities. Therefore, disaggregated data on minorities with regard to their share in public sector employment, credit facilities and development outcomes by line Ministries and departments have not been reported under the 15 Point Programme.

Currently, MoMA is one of the main sources of financing for the development of minorities. There is a marginal increase in the BE for 2024-25 to Rs 3183.24 crore from Rs 3097.60 crore in the BE of 2023-24. In spite of the low development indicators of minorities, there was a drastic decline of 38 percent in the previous year’s budget (a decrease of Rs 1,913 crore from 2022-23) for the MoMA. For the last few years, MoMA has not been able to utilise funds against the BE. The ministry spent Rs 3,998.57 crore out of the BE of Rs 5,029.10 crore and Rs 4,325.24 crore out of Rs 4,810.77 crore in 2020-21 and 2021-22, respectively. Actual expenditure of Rs 802.69 crore was incurred out of the Rs 5,020.50 crore outlay in 2022-23. The reasons for MoMA not being able to spend the allocated amount include delays in release of the matching share by states and, subsequently, non-release from the Union Government in CSSs such as PMJVK and Pradhan Mantri Virasat Ka Samvardhan (PM VIKAS).

It also appears that Union Budget outlays have not been provided in accordance with the demands for funds made by MoMA. For 2022-23, Rs 5,020.50 crore was allocated against demands made for Rs 8,152 crore. In fact, the total budget of the ministry as a proportion of the total Union Budget has declined to 0.06 percent in 2024-25 (BE) from 0.12 percent in 2022-23 (BE). This year’s total allocation for MoMA is almost equal to the amount allocated in 2012-13.

Graph 1: Total Budget Allocation and Utilisation under MoMA(Rs in crore)

Source: Note on Demand for Grants, MoMA

The major reason behind the decline in the allocation of MoMA has been discontinuation of several schemes/institutions such as Maulana Azad National Fellowship for Minority students, Interest subsidy on educational loans for overseas students, Free Coaching Schemes, limiting coverage of the Pre Matric Scholarship for classes 9-10, closing Maulana Azad Education Foundation (MAEF)/Begum Hazrat Mahal Scholarship Scheme, and Scheme for Madrasas and Minorities. There has also been a decline in allocations for many major schemes, such as Merit Cum Means, Pre Matric Scheme, Free Coaching and allied schemes, Education Scheme for Madrasas and Minorities, and the Pradhan Mantri Jan Vikas Karyakram (PMJVK).

The decline in the central share in the Education Scheme for Madrasas and Minorities, and subsequent discontinuation of the scheme have affected the education of children in Madrasas due to non-payment of honoraria to more than 30,000 teachers in Uttar Pradesh for many years. The scheme aimed to provide financial assistance to introduce modern subjects in Madrasas, support teachers’ training, and augment school infrastructure in minority institutions to improve the quality of education of poor students.

Table 1: Budget Allocation and Expenditureunder Major Schemes of MoMA(Rs in crore)

Source: Ministry of Minority Affairs

In the last Budget, a new scheme called PM VIKAS was announced for the skilling, entrepreneurship and leadership of minorities. The new scheme, with allocation of Rs 540 crore in 2023-24, sought to benefit approximately 9 lakh candidates by 2025-26. However, its budgetary allocation has been reduced to Rs 325.86 crore in 2023-24 (RE) and Rs 500 crore in 2024-25 (BE). The earlier schemes, known as USTTAD and Hamari Dharohar, Seekho aur Kamao and Nai Roshni, have been subsumed in PM VIKAS. However, the beneficiary data of these schemes was not available on regular basis in the public domain before they were subsumed. As per the Departmental Standing Committee on Social Justice – 2023-24, the modalities of scheme implementation and the process of empanelment of the Project Implementation Schemes (PIAs) is yet to be finalised.

The Post-Matric Scholarship has seen an increase in allocation from the previous year’s budget in the budget for 2024-25, while several other schemes have seen declines. Despite the large geographical coverage of PMJVK, it has only a marginal increase in allocation in this year’s budget (Rs 910.9 crore) from last year (Rs 600 crore), and reduction of the budget to Rs 500 crore at the RE level is going to impact the scheme in achieving its objectives. The objective of the PMJVK is to develop socio-economic infrastructure and basic amenities in identified Minority Concentration Areas to improve the quality of life of people in these areas and reduce imbalances as compared to the national average. On the basis of Census 2011 data, 870 Minority Concentration Blocks (MCBs), 321 Minority Concentration Towns (MCTs) and 109 Minority Concentration Districts HQs (MCD HQs) in 33 States/UTs have been identified.

As highlighted by the Departmentally Related Standing Committee on Social Justice – 2023-24, the scholarship schemes face several implementation issues with poor utilisation of funds, inadequate coverage of beneficiaries due to the quota system, low unit costs due to inadequate allocations of funds, and also scrapping of some of the schemes. The amounts given to students as scholarships are not adequate to meet their educational expenses. The unit cost for scholarships in Pre-Matric, Post-Matric and Merit-cum-Means schemes for minorities has not been revised since the inception of the schemes (in 2007-08).

It is found that there was a huge unspent balance in financial year 2022-23. Utilisation stood at 3.1 percent, 5.6 percent, 9.6 percent and 31.6 percent in the Pre-Matric, Post-Matric, Merit Cum Means and free coaching schemes, respectively. The first three scholarship schemes of MoMA are implemented through the National Scholarship Portal (NSP). But there is an inherent issue in the structure of the implementation of these Schemes, as disbursement of the scholarships starts only in the last quarter of the fiscal year and goes on until the end of first quarter of the subsequent financial year. The process of payment gets delayed due to late opening of the window for registration of applications by the NSP, and verification of applications at the institution, District and State level. It was also found that most states do not have a dedicated Department of Minority Welfare at the district level, aside from which there is an acute shortage of staff in general.

Scheduled Castes and Scheduled Tribes

Since 2017-18 TSP and SCSP have been known as the Development Action Plan for SCs and STs (DAPSC & DAPST) respectively. However, there are many shortcomings in the policy design, including inadequate resource allocation, poor implementation and monitoring.

As per the revised NITI Aayog guidelines of 2017, DAPSC and DAPST focus on specific schemes to ensure relevant budgeting and non-diversion of funds meant for SCs and STs. The percentage of earmarking has to be calculated against overall allocation for specific schemes (CSSs and CSs) and not against the total budget of the concerned ministries/departments.

It also suggested the creation of a “non-lapsable central pool of SCSP and TSP Funds” for unutilised funds and outcome-based monitoring. The fund is to be used for implementing exclusive and need-based schemes for the development of SC and ST communities and to provide incentives to state governments for effective implementation of SCSP and TSP. A large amount of the budgetary allocation made by general sector schemes towards DAPSC and DAPST continues to be notional in terms of reporting.  The allocation in general schemes tends to be notional since they allocate funds without formulating any methodology/scientific criteria. Such allocations are high in the 2024-25 (BE), such as in the case of the Department of Fertilisers and Department of Agriculture and Farmers Welfare. These allocations do not have any real impact on the SC and ST community and inflate the total quantum of DAPSC and DAPST budget allocation.

The number of ministries allocating funds for DAPSC has, as reported in Statement 10 A, shown a continuous increase. Forty ministries and departments have allocated funds under DAPSC in 2024-25. The absolute allocation has marginally gone up to Rs 1,65,597.70 crore in 2024-25(BE) from Rs 1,59,147.79 crore in 2023-24 (BE). This is a small increase.  The share of DAPSC allocation has not been in tune with the proportion of SC population to total population since 2021-22. This has been consistently lower than the 16.2 percent prescribed by the NITI Aayog. Over the years, the total allocation for the welfare of SCs has not been not fully spent and part of it has been surrendered by the ministries/departments.  This is due to the limited coverage of departments and ministries under DAPSC in terms of earmarking funds.

While the erstwhile Planning Commission did not consider making the allocation non-lapsable, the NITI Aayog examined the issue of under and non-utilisation of SCSP, and suggested that these funds be pooled and allocated to the Ministry of Social Justice and Empowerment, the nodal ministry for the welfare of SCs. However, this is still not being implemented. Research shows that the outlays from schemes/programmes do not reach the grassroots because of the lack of an effective decentralised planning process. Schemes/programmes addressing priority sectors such as education, health, vocational training for SCs, and so on, were not planned according to the needs of the community due to weak decentralised planning. Additionally, development schemes/programmes relating to roads, major irrigation projects, mega power and electricity projects did not offer any direct immediate benefits to SCs.

Figure1: Total fund allocation and expenditure made under DAPSC (Rs crore)

Source: Compiled by CBGA from Statement 10A (Allocation For Welfare Of Schedule Caste) from General Expenditure Profile

In 2024-25, the allocations under DAPST have been made in proportion to the ST population and 46 ministries, departments and UTs have reported allocations under DAPST. However, the funds under DAPST across many ministries/departments are largely for general sector programmes that are reported notionally with regard to benefits for STs, instead of being allocated based on the actual needs of the community, with its active participation. In terms of implementation challenges, DAPST is facing problems similar to DAPSC including low fund utilisation, poor policy design, planning and monitoring.

Figure 2: Total fund allocation and utilisation made under DAPST

Source: Compiled by CBGA from Statement 10B (Allocation for Welfare Of Schedule Tribes) from General Expenditure Profile

The departmentally related Standing Committee Report on Social Justice and Empowerment (Ministry of Tribal Affairs) 2018-19 highlighted poor monitoring of the implementation of DAPST due to lack of dedicated monitoring units at the state and district levels. The Tribal Welfare Departments of states, the nodal Department for Welfare of STs in the districts as well as institutional development initiatives such as the Integrated Tribal Development Project (ITDP)/Integrated Tribal Development Agency (ITDA) and Tribal Research Institutes (TRI) have remained weak in terms of human resources and financial powers. Further, no robust mechanism has been created in most states for inter-departmental coordination and convergence of resources with line departments. Importantly, the head of ITDA/ITDP/TRI is not a dedicated senior officer but someone performing that duty as an additional charge.

[The writer is associated with CBGA and IPSA, New Delhi ([email protected])]