Reduced Allocations for Weaker Sections

Bharat Dogra

The unexpected reduction in the union budget of allocations for NREGA works led to widespread opposition by social activists. Responding to this criticism the Rural Development Ministry said that NREGA budget allocation will be increased later in the year if there is higher demand for work.

In fact there is a strong case for upward revision of quite a few schemes meant for weaker sections as their allocations appear to be quite low compared to real needs.

The union budget for the year has been presented at a time of growing concerns that expectations regarding an inclusive recovery from the COVID and lockdown related economic crisis have not been realised for millions of poor households, while inequalities have been increasing sharply. There were therefore strong reasons for using this budget as an instrument for providing immediate relief to the bottom half of the population (which now has access to only 3 to 6% of the total wealth, according to various estimates, and only 13% of the total income of the country) for improving its prospects for sustainable and stable livelihoods as well as better access to essential services like education, nutrition programmes, health and sanitation.

The work available under NREGA or National Rural Employment Guarantee Act can be very important for some of the poorest households in these difficult times. The allocation in the previous year was found to be adequate just for about just 40 days or so of employment. As NREGA stipulates the availability of 100 days of work and as the wage-rate as well as proportion of wage costs to material costs is broadly known, it is possible to find out the budget needed for the fulfilment of this legal obligation, once one assumes that number of workers seeking employment will be the same as the previous year.

According to calculations made by the People’s Action for Employment Guarantee (PAEG), a budgetary provision of INR 271,000 crore is needed in the union budget for 2023-24 for NREGA to fulfill the obligation of 100 days of work for these workers. However this year only INR 60,000 crore has been allocated for NREGA, compared to INR 89400 crore Revised Estimate for the previous year, which is really shocking as such a low allocation was never expected.

National Social Assistance Programme (NSAP) is by far the most important programme for making available pensions to the elderly people, widows and disability affected persons in the unorganised sector. There is widespread concern over the stagnation in the budget for this programme (leaving aside any allocation made under the COVID package) in recent years, despite the obvious urgency of this programme. This year a big rise in NSAP was expected but the allocation at INR 9636 is even marginally lower than the allocation for the previous year.

For satisfactory implementation of the National Food Security Act, the budget of the Department of Food and Public Distribution is most important, but its budget has seen drastic reduction. The actual expenditure of this department was INR 304360 crore in 2031-22. Next year (2022-23) the allocation came down to 215959 crore but to cope with needs of people this had to be increased to 296303 crore later in the year. This year again a significant increase later in the year will be needed as only INR 205513 crore has been provided initially in the budget for 2023-24.

The Nutrition programmes obviously have a high priority keeping in view the high levels of malnutrition. The government has been announcing plans for significant improvements without providing the budget for these, with the result that, not to talk of big improvements, even the maintenance of normal levels has become difficult. This year the budget for major allocations under food and nutrition are lower or stagnant.

Labour welfare is an important area ofconcern but the budget for important labour welfare schemes has come down. Overall the budget for the Ministry of Labour and Employment had received allocation of INR 16893 crore in the previous year but this is down to INR 13221 crore for 2023-24—this too at a time when workers in informal sector are facing a lot of difficulties and need help in the form of various welfare measures. Budgets for important schemes of welfare of minorities too have suffered. The budget of schemes under Department of Empowerment of Persons with Disabilities has also suffered. The allocation for the National Project for Child Labour has been decreased by about one-third from its already low level.

In times of inflation the department of consumer affairs can provide some relief but its budget allocation of INR 1724 crore last year has been reduced to just INR250 crore this year, a huge cut.

There is clearly urgent need for fiscal policy to make an important contribution to promoting inclusive recovery which provides relief to distressed people and also further creates linkages and a multiplier effect for broad-based economic growth. However as allocations for various schemes crucial for welfare of weaker sections have fallen far short of their needs and expectations, there is a strong case for upward revision of these allocations later in the year while preparing revised estimates.

[The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include India’s Quest for Sustainable Farming and Healthy Food, Man over Machine and Protecting Earth for Children.]

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Vol 55, No. 38, Mar 19 - 25, 2023