After the Euphoria

Bharat Dogra

Although the Union Budget 2016-17 has been publicised as a budget which has been generous to weaker sections and farmers the reality as revealed by actual allocations is quite different. Although some aspects of budget relating to agriculture and welfare of the poor have experienced an increase but this is a relatively modest increase and falls far short of what was needed. On the other hand in some other important areas concerning the vulnerable sections there is either no increase at all or else there is even some reduction in real terms after providing for inflation.

This year there is special need for giving more attention to weaker sections as almost 300 districts have been affected by drought. Another reason for giving more attention to weaker sections this year is that during the last two financial years significant cuts were made in several of those schemes and programmes which have a special relevance to weaker sections. Therefore it is necessary to undo this injustice by making higher allocations for these programmes now. However this need for significantly higher allocations has not been fulfilled.

While it is true that the budget shows a significant increase in the allocation for the Department of Agriculture, Cooperation and Farmers' Welfare, this increase is mainly on the basis of a change in accounts keeping only as a subsidy on interest to farmers which was earlier shown under the Ministry of Finance has now been shifted to the Ministry of Agriculture. If this amount is deducted then actually there is only a modest increase in the budget of the Department of Agriculture. The increase in the budget for works to be taken up under NREGA is even more modest. In the existing situation of widespread drought and rural distress while there is clearly a need for increasing the budget for nutrition programmes, the budget for ICDS has been further cut compared to the revised estimate for the previous year.

While a more complete picture regarding the availability of funds for some important schemes and programmes will be revealed only when seen in combination with the allocations made in various state budgets the overall situation appears to be that shortage of funds for several schemes and programmes which are important for the poor will continue to persist. This is because the government is not prepared to annoy powerful sections by raising direct taxes adequately. Other fiscal measures of reducing inequalities are also not being used and the result is that it is not possible to find adequate resources for poor and vulnerable sections.

Vol. 48, No. 42, Apr 24 - 30, 2016