This year’s Union Budget was presented in the backdrop of a widespread economic slowdown with even the Reserve Bank of India’s GDP (gross domestic product) estimate for this fiscal year at 5% and the veracity of these numbers in serious question, unemployment at a four-decade high and a severe agrarian crisis.
In this climate of mounting miseries of the people, the Narendra Modi government has stuck to its neoliberal dogma and utter disregard for not just people’s sufferings but also well understood prescriptions of stimulus spending by mainstream economists during periods of slowdown in capitalist economies.
The Modi government’s callousness towards agrarian crisis and four-decade high unemployment figures is starkly visible in the rural job guarantee scheme MGNREGA’s allocation in this year’s budget. MGNREGA by law provides guaranteed employment of 100 days to any adult in rural areas willing to do manual work. Even before this budget, MGNREGA allocation was grossly inadequate to satisfy this legal guarantee throughout the country.
This year’s allocation for MGNREGA is Rs 61,500 crore, as compared to Rs 71,000 crore in FY 2019-20 revised estimates. This is a cut of Rs 9,500 crore in nominal terms and the cut is even more extreme when measured in real terms. That in face of stubbornly high unemployment, the government would actually cut allocation for a programme which has the ability to generate employment in rural areas where it’s most needed, and to the most vulnerable, which would result in immediate consumption and hence increased rural demand, defies logic.
During last year’s general election, the ruling Bharatiya Janata Party (BJP) had promised to double farmers’ income by 2022. This year’s budget figures make it clear that they have no intention of even pretending to keep their promise in this regard, as is the case with most of Modi’s jumlas (hollow statements).
The allocation for fertiliser subsidies has been cut by almost 11% in nominal terms over the last year. Of the budgetary allocations to agriculture & allied activities, the revised estimates for last year show a cut of Rs 28,000 crore over budgeted estimates. Even in the PM-KISAN scheme, which was announced with much fanfare just before the last elections promising to give every farmer Rs 6000 per year, the shortfall in spending amounts to Rs 20,000 crore. By the government’s own estimates only 26% of eligible farmers have received their full payment under this scheme.
The drastic cut in food subsidy spending and budgetary allocation, which is discussed in the following paragraph, also shines the light on the hollowness of the government’s announcements regarding increases in crop MSPs (minimum support price) made before the last election. In fact, there is a shortfall in expenditure when revised estimates are compared to budgeted estimates of the current fiscal year on every single scheme of Ministry of Agriculture & Farmers Welfare.
The expenditure on food subsidy was massively cut last year, and that has been extended to the coming year. In 2019-20, the government allocated Rs 1.84 lakh crore to food subsidies, but the revised estimates have been reduced to Rs 1.08 lakh crore. This year's allocation, at Rs 1.15 lakh crore, is 37% less than what was budgeted last year. This at a time of growing starvation deaths and malnutrition. UNICEF’s report in 2019 states that more than half of India’s children face some form of malnutrition. This includes 35% stunted and 17% wasted children. The report further states that only 42% of children (in the age group of 6 to 23 months) are fed at adequate frequency. India leads the world in number of malnourished children and has fallen to the rank of 112 from 95 in the global hunger index.
The Mid-Day Meal Scheme, the government’s national school meal programme, designed to better the nutritional standing of school-age children, saw no increase in its budget allocation at Rs 11,000 crore. This is effectively a cut of about 5% in real terms given the current consumer price index figures. What is more is that the government actually spent less that the budgeted amount with revised estimates coming at Rs 9,912 crore for the current fiscal year.
Similarly, the anganwadi services allocation, which provide funds for running rural childcare centres along with nutritional supplements for children, saw a drop in spending of Rs 2,130 crore from the budgeted amount of Rs 19,834 crore, with the revised estimates for 2019-20 coming at Rs 17,704 crore. This Union Budget’s allocation is Rs 20,532 crore, a mere 3.5% increase.
The total umbrella-ICDS (Integrated Child Development Scheme) shows a similar pattern with a shortfall in spending of Rs 2,630 crore this fiscal and an increase in allocation of 3.5% for next year. The government has taken no cognisance of the anganwadi workers’ and helpers’ long-standing demands for salary increase. This criminal neglect of children’s nutritional needs and their caregivers is made more egregious by the fact that while the government is stealthily cutting spending even from the inadequate budgeted amounts, it is then diverting the money to corporate tax cuts and loan write-offs.
The stinginess on this government’s part extends to overall allocation for welfare of children. The revised estimates for allocation for welfare of children for 2019-20 comes at Rs 87,641 crore, as opposed to budgeted estimates of Rs 91,644 crore, which amounts to a shortfall in spending of 4,000 crore this fiscal.
Government expenditure on education fares no better. The total allocation to higher education doesn't also keep pace with inflation with an increase of mere 3%, as compared to last year. Total funding for University Grants Commission (UGC) has gone up by a paltry 2%. The total grants to Central universities have dropped to Rs 7,642 crore from this fiscal’s revised estimates of Rs 8,286 crore -- a drop of Rs 643 crore. This drop is more stark if one removes the HEPA loan interest and principal repayment amount. The drop in actual funds to universities is a whopping Rs 1,244 crore, which works to a 16% cut. The Total spending on research and innovation has been nearly halved from an already ludicrous Rs 608 crore to Rs 307 crore. Clearly, improving higher education and research doesn't fit into the Rashtriya Swayamsevak Sangh or RSS and the BJP’s vision for the future of India.
The less said the better for allocations to the marginalised sections of society, which is no surprise given RSS’ ideological commitment to Manuvadi values. Revised estimates for welfare of Scheduled Castes (SCs) for 2019-20 comes at Rs 72,936 crore, as opposed to budgeted estimates of Rs 81,340 crore, which is a shortfall of Rs 8,400 crore. Budget 2020 allocation for welfare of SCs is Rs 83,256 crore. This is merely 2.73% of the total Budget expenditure down from 2.9% last year and much less than the guideline of 16% to be set aside for SC welfare.
Allocation for welfare of Scheduled Tribes (STs) fares no better with revised estimates for 2019-20 at Rs 49,268 crore, as opposed to budgeted estimates of Rs 52,883 crore - a shortfall in spending of Rs 3,615 crore. This years’ Budget allocation for welfare of STs is Rs 53,652 crore, which is merely 1.76% of total Budget expenditure, down from 1.9% last year and much less than the guideline of 8% to be set aside for ST welfare.
Women's budget allocation is Rs 1,43,461 crore compared with the revised estimate for 2019-20 at Rs 1,42,813 crore. An increase of 0.45% over last year, well below the rate of inflation. The share of women’s Budget allocation has been further cut to 4.7% of total expenditure, as compared to 4.9% in last year’s Budget and 5.1% the year before that.
No increase in budgetary allocations, to keep pace with inflation or growing population, have been earmarked for either the widow or the old age pension schemes.
Even for Prime Minister Narendra Modi’s pet schemes announced in his first term, the spending shortfall has been brutal. Namami Gange’s spending shortfall is 50% of its budgeted allocation of Rs 700 crore this fiscal. Swachh Bharat Mission had a spending shortfall of Rs 1,656 crore this fiscal, which amounts to 16.56% of the total budgeted amount. There is no spending increase to match inflation for even this mission.
The Modi government has made its priorities very clear in this Budget. It doesn’t care two hoots about farmers, unemployed, students, the marginalised sections, children and women -- that is, the people of this country. With Corporate tax at 15%, one of the lowest in the world as per the government’s own admission, the Modi government is there only to serve the interests of corporate cronies.