Economy

Will a Pre-Election Year Budget Change How the ‘Other Half’ of India Lives?

The NDA, one of the most anti-poor, anti-farmer, anti-rural governments in India’s history, is likely to finally be forced to put some resources aside for the social sector.

Technological interventions in the MGNREGA scheme are not helping workers. Credit: Reuters/Files

Oxfam’s recent report on rising inequalities should be a wake up call for policy makers in Davos, as well as their friends in Delhi. Or perhaps it should help us understand that the outcomes are a result of deliberate priorities skewed towards the urban affluent, corporate sector.

In fact, it would be interesting to see the numbers of farmers and rural Indians who find themselves in the 1% of Indians who have cornered 73% of the wealth created in the country last year. In the last full budget before the 17th Lok Sabha elections, one of the most anti-poor, anti-farmer, anti-rural governments in India’s history, is likely to finally be forced to put some resources aside for the social sector. Even if India’s bottom 50% has to share 1% of the total wealth, they still each have a vote.

We are therefore likely to hear in the upcoming budget speech of the government’s immense commitment to farmers and the poor and to transparent and accountable governance. To examine these claims in light of the actual reality on the ground vis-a-vis some important social sector entitlements, it is useful to look at the demands raised by citizens and campaigns such as Pension Parishad, the Right to Food Campaign and NREGA Sangharsh Morcha. They have been working on strengthening access to these entitlements, and have consistently articulated demands for ensuring its effective implementation.

The need for increased budgetary allocations indexed to price rise, universal access to social security, dedicated funds for transparency and accountability measures and an unequivocal rejection of the large-scale disruption and exclusion caused by undemocratic and forced imposition of Aadhaar-based biometric authentication are the key demands of citizens and their collectives for implementing social sector legal frameworks in letter and spirit.

Is this highest ever enough to clear dues for MGNREGA?

For the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), in the memorandum submitted to the finance minister in pre-budget consultations, it has been pointed out that the funds that have been allocated to the programme are grossly insufficient, which leads to decreasing employment, delays in wages, and repeated violation of the law. For the last three Union budgets, the finance minister has erroneously announced that the programme received its highest ever allocation. However budget speeches fail to mention that the programme has continuously been running in deficit, having to pay off previous years liabilities in the current year. Thus an adequate budget for the programme will have to first clear all these liabilities and then push enough funds for a demand-based employment guarantee to function.

The budget allocation to MGNREGA should be in the range of Rs 80,000 crore per annum to minimally function as per its legal provisions.

Table 1: MGNREGA Pending Liabilities

Year Pending Liability (of previous FY) [Rs. Crore] Budgetary Allocation* (of that FY)[Rs. Crore] Liabilities as % of allocation
2018-19 4,786**
2017-18 11,646 48,500 24%
2016-17 13,220 38,500 34%
2015-16 12218 34,699 35%
2014-15 6102 34,000 18%
2013-14 6238 33,000 19%
2012-13 3378 33,000 10%

* not including supplementary grants, if any
** as of date, figure likely to increase over next two months

The Supreme Court, in an ongoing PIL, has ordered timely payment of wages and payment of compensation for delay in wages beyond 15 days of completing work. The deliberate obfuscation of the central government in denying delays and thereby refraining from paying workers their dues has been a central point of contention. It is unfortunate that the government is using all possible means to deny workers their rights under the law.

There is also a sustained demand for the linking of MGNREGA wage rates with statutory state minimum wages for agriculture, with this parity being essential for constitutional values of equality and dignity. The Supreme Court itself views non-payment of minimum wage government work, as equivalent to forced labour.

Women work at a road construction site in Agartala. Credit: Reuters

Aadhaar locking people out of their foodgrains

This year has been particularly fraught for the Public Distribution System (PDS). A series of starvation deaths in Jharkhand, unprecedented for the 21st century, have been the fruition of the exclusionary imposition of mandatory biometrics through Aadhaar. In Rajasthan, where mandatory Aadhaar-based biometric authentication for accessing foodgrains under the PDS has been in use for over a year, roughly 30% (almost a crore of beneficiaries) are still unable to get their foodgrain as per government’s own data.

By branding those who cannot access their legal food grains as “savings”, the government has started cutting allocations to shops. Delhi has started universalising the use of Aadhaar for rations, and already 26,000 people are locked out of their entitlements. Given the multiple failures of this ill-suited technology for rural India, a consistent demand has been to immediately stop the forced imposition of Aadhaar as the exclusive means of accessing welfare entitlements and instead invest on policy reforms for enhancing effectiveness and inclusiveness of service delivery.


Also read: (Not) Direct, (No) Benefits (Cost) Transfer in Jharkhand


There is also a need to address substantive issues, such as providing budgets to diversify the concept of food security from just grains to millets and pulses, and providing eggs and fruits in the Midday Meal Scheme. The other irony is the scale back on universal maternity entitlements envisioned in the National Food Security Act, 2013 (NFSA) to the limited benefits to only one child under the Pradhan Mantri Matritva Vandana Yojana (PMMVY). There is need to enhance the allocation so that the entitlement is indeed universal as envisaged in the NFSA. Sixty distinguished economists reiterated this in a letter to the finance minister in December 2017.

Social security pensions depreciating

The entitlement of social security pensions under the National Social Assistance Programme for BPL families has remained unashamedly stagnant at Rs 200 per month, as compared to enhanced pensions for government personnel under the 7th Pay Commission expected to cost the exchequer Rs 30,748 crores.

The Directive Principles of State Policy and the NFSA have enabling provisions for the state to make available adequate pensions for the elderly should they so desire. Conveners of Pension Parishad wrote to the prime minister in December 2017 on the complete neglect of the social security pension schemes. The monthly old age pension contribution of the central government has remained a shocking Rs 200 per month since 2006, which over the past ten years, has depreciated in value by 50% and now amounts to less than a day’s minimum wage in most parts of India. They repeat their demand of a universal and non-contributory old age pension, no less than 50% of minimum wages, indexed to inflation.

Moreover, the Jan Dhan, Aadhaar, and Mobile (JAM) payment platform has resulted in the exclusion and illegitimate cancellation of even these meagre pensions of lakhs of beneficiaries – documented in Rajasthan and Bihar.

Source: Centre for Budget and Governance Accountability(CBGA).

Source: Centre for Budget and Governance Accountability(CBGA).


Also read: Software Glitches Leave Many Mothers in the Lurch in Rajasthan


Legal frameworks required

Social welfare entitlements apart from being statutory rights on their own, are also the means to live a life as guaranteed by the constitution. Given that these three programmes taken together reach almost three fourth of the population of the country, and account for a large portion of social sector budgets, the governance mechanisms put in place here will have a bearing for governance overall.

To this extent, rather than the exclusionary, and arbitrary Aadhaar-based delivery platform, there is a need for a uniform and comprehensive legal framework of grievance redress applicable to all social sector schemes. For all its rhetoric on transparency and accountability, this government has a terrible track record having failed to bring the already legislated Lokpal and whistleblower protection laws, and with no progress on the now lapsed Grievance Redress Bill.

A legal framework for grievance redress and accountability proposes the formulation that 1% of budget allocations of all programmes be allotted for transparency and accountability measures, as 0.5% of the MGNREGA budget has recently been done for social audits. This is based on the principle that to ensure more effective and credible spending of 99% of the budget, it is prudent to allocate 1% of the budget to institutionalising norms for citizen centric transparency and accountability. In addition, there is a need for information and facilitation centres, continuously updated proactive disclosures as per the Right to Information and clearly defined job charts for the timely disbursal of entitlements.

Thus an adequate budget is not just the absolute figure in itself, but also how it caters to ground realities, not merely in the quantity but also the effectiveness of its delivery. For the bottom 50% of India, these programmes along with their right to a life with quality health, education, and employment lie at the heart of democratic governance. For the social sector it is therefore not a question of “minimum government”, but the continuing reality of minimum governance.

Nikhil Dey is a social activist with the Mazdoor Kisan Shakti Sangathan.

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  • sivaraman ias retd

    First of all the author’s attack is based on complete ignorance of ground realities of administration.1.Almost all schemes are implemented by the state govts even when they are christened as Pradhan Mantri thi sor that.2.central govt. releases funds after one or two advances only on certification that the previous amounts have been spent.3.The earlier practice of direct releases to collectors was given up long ago.4.As far as MNREGA is concerned I work in TN villages and by and large I found the works are cleaning grass on road berms mostly idling. 4.Agriculture has received increasing attention and the figures in the Survey 2017/18.I have seen programmes in operation in the villages. We have formed ery successful FPOs and tha framers rae doing well.5.The main problem everywhere is that framers are unable to sell their produce directly excepting where the FPOs are functioning well. The ubiquitous middlemen give cash and walk away with the produce. In Ooty the small tea planters have dues amounting to Rs 37 crores from tea fcatorues of which the the GOTN promoted factories owe around rs 23 crores.of Jan.
    SO LET US NOT CONDEMN THE CENTRAL GOVT FOR EVERY ILL.

    • Anjan Basu

      Let us not condemn the central govt

  • S.N.Iyer

    An NGO headed by Madhura Swaminathan (daughter of the great agri scientist, Dr MS Swaminathan) has given an analysis of the budgets where iot is clearly very much lower than the earlier Govt by changing the method of allocations of Centre’s funds. It is true that State funds also have their part to play. The recent elections on Gujarat revealed the discontent in the rural areas while the Centre took immediate measures to address the traders from Surat and Ahmedabad to win their votes. What is significant that trhere seems to be a bias to solve problems of the business community while the rural population and farmers where ignored.