(Weekly Organ of the Communist Party of India (Marxist)
March 16, 2008
Tokenism And Half Hearted Measures
A slight breeze of political realism has come to the corridors of the Finance ministry. There is a fraction of a shift from the sensex to the village. Some of the demands of the Left have been addressed in the budget such as the welcome measures of debt relief to farmers; the increase, though inadequate, of the allowances to anganwadi workers and helpers, relief to middle classes by raising the tax ceilings, removal of ad valorem tax on petroleum products. Much of the confusion on the debt waiver issue could have been avoided had the Finance minister given an indication of where the money is coming from. The Left, for example, would vehemently oppose any proposal for disinvestment in PSUs to pay the bill, as has been hinted by the prime minister. Pitting workers of PSUs against peasants in distress would hardly be helping the aam aadmi. Considering that in the last two years the generosity in tax concessions to corporates as reflected in the “revenue foregone” columns of the budget papers is the staggering amount of 103689 crore rupees, there is no dearth of resources available to alleviate the debt burdens of farmers.
The gross budgetary support for the central plan is 16 per cent more than last time. This increase is more or less equal to the growth of the nominal GDP, taking into account 8-9 per cent real GDP growth and 5-6 per cent inflation. The question is when the tax revenues are expected to increase by over 17 per cent this year, when foreign exchange reserves are healthy, when the dividends paid by the central public sector enterprises show continuous increase, why is the government so miserly about putting its money where the CMP is? Its ideological and political commitment to the “reform” process prevents it from taking substantive steps to increase the share of the poor in national resources.
Take the issue of food security. The only growth rate that the aam aadmi has experienced is that of the prices of essential commodities like rice, wheat, pulses, edible oils and sugar. The virtual destruction of the public distribution system has meant that it is no longer a counterweight to check prices. There are shocking revelations in the recently published NSS report Public Distribution and other Household Consumption (2004-2005) (GOI, 2007) of massive exclusions of the most vulnerable sections, sixty one per cent of scheduled caste households in rural India, fifty-five per cent of scheduled tribes and over half of all landless are excluded from the Antodaya or BPL (below poverty line) ration cards. The main problem is not aberrations in identification of the poor but in fraudulent estimates of the numbers of poor made by successive planning commissions which are then translated into “quotas” of BPL households to the states. It was essential for the Finance minister to cut the umbilical cord between the planning commission estimates of poverty on the one hand and BPL quotas on the other, by announcing substantial increases in food subsidies to include a much larger number of households into the BPL and Antodaya categories. The budget fails to add even one more household into the public distribution system. On the contrary, according to the Economic Survey APL card holders (above poverty line) sections will get foodgrains depending on availability. Considering that APL means anyone earning more than the BPL line of Rs 350 or so a month, such a policy reflected also in the budget means that vast sections of the poor are virtually pushed out of the food security net. In the last year, allocations of foodgrains to the PDS have been slashed by almost 20 per cent, a whopping 139.62 lakh tonnes. In this context the meagre increase in the food subsidy by just 3.5 per cent over last year (which actually entails a reduction since the budget assumes a 6 per cent inflation rate) is a slap in the face of all those who had hoped for some relief from hunger from this budget.
Seventy seven per cent of the population according to the Arjun Sengupta report spends less than twenty rupees a day. The budget has no relief for them, just an extension of existing insurance programmes by an additional allocation of 200 crores rupees. Even for this meager amount a condition has been imposed that only BPL families will be eligible. Can this be termed inclusive growth?
The budget is stamped with tokenism and half-hearted measures. Funds are switched from one scheme to another and portrayed as an increase. For example, in the education budget the allocations for Sarva Shiksha Abhiyan (SSA) is actually 80 crore rupees less than last year, but the inclusion of the North eastern region (NER) allocations makes it appear to be an increase. Taken together an additional 1400 crores has been allocated for the two important projects of mid-day meals and SSA (including NER) but this is actually less than the additional amount of over 2400 crores that came into the Finance minister’s kitty for these programmes as education cess. Or take the issue of funds for the Rural Employment Guarantee act. Although the districts have doubled, the funds have increased only by twenty per cent. But even of this increase of 4000 crores, the major amount of 3420 crores is actually transferred from another scheme, the SGRY (Swarna Grameen Rozgar Yojana) which has been merged into the Rural Employment Guarantee Act. So the actual increase is just 580 crores.
If the devil is in the detail then scrutiny of the actual allocations reveals some strange decisions perhaps also reflecting a lopsided prioritisation. For example in the health allocations whereas the increase for anti-AIDS programmes is 274 crores, the increase for the entire national disease control programme is less at 186 crores. It is indeed a disturbing feature that over the years while people continue to suffer due to malaria or TB, allocations to control these killer diseases is decreasing over the years. Strangely the Indian Council for Medical Research has no allocations at all and why should the Finance minister cut the budget for the All India Institute for Medical Sciences, one of our premier institutions? The tax concessions given to private hospitals in the budget are in sharp contrast with the meager allocations to public hospitals. This is less a public-private partnership and more a privatisation partnership with the government, which is not in the interests of the health sector.
While the budget falls far short of allocating funds for a sub-plan for minority development it makes an increase of around 500 crores for various schemes for the minorities. However it is indeed shocking that the scheme for pre-matric scholarships announced with much fanfare last year was hardly implemented with less than 9 crores of the 70 crores being spent. It is reported that the money was made available only at the end of the year, which deprived eligible students of the scholarships. The Finance ministry’s record in ensuring the implementation of the priority sector loans to minorities is poor. It is therefore only a measure of the political bankruptcy of the opposition BJP that it should call the budget a communal one. In fact much more could and should have been done to implement the Sachar Committee recommendations.
Allocations for women, according to an analysis by Centre for Budget and Governance Accountability (CBGA) shows only a marginal increase from 3.3 per cent to 3.6 per cent of total public expenditure. The initiative taken for gender budgeting has not gathered much force as the budget papers still refer to only 33 departments as having gender segregated data. However state governments do need to follow the example set by the central budget in submitting a separate gender budget account. The CBGA also points to the most disturbing decrease in allocations for Scheduled Castes and Scheduled tribes as percentage of total government expenditure. Excluding cenral assistance for states and union territories the total plan outlay has declined from 7.90 in 2007-2008 to 7.51 in 2008-2009 for SCs and from 4.77 percent to 4.45 per cent in 2008-2009 for STs.
As a footnote, it may be interesting to those following the Indo-US nuclear deal debate that the government’s stated commitment to the development of indigenous technologies is hardly reflected in its budgetary allocations. The allocations for the Department of Atomic Energy have been decreased by 188 crores. Does this reflect a thrust on nuclear power generation?