Finance minister Nirmala Sitharaman used the interim budget before Lok Sabha elections to highlight the ‘achievements’ of her government over the last ten years. She also outlined the new direction that the Bharatiya Janata Party regime has introduced in fiscal policy.
Before we embark on a critical evaluation of the finance minister’s assessment of the lost decade, it is crucial that we acknowledge the ideological underpinnings in her budget speech.
The minister emphasised the shift from an “earlier approach of tackling poverty through entitlements” to the new mantra of “empowering the poor”. In effect, she denounced the understanding where the citizenry was entitled to social welfare – healthcare, education, pensions – and could demand it from the state as a right. Instead, she spoke of having supplanted this with a new perspective that sees citizens as mere labharthis, the recipients of the ruler’s benevolence.
In the same vein, Sitharaman unveiled the new definition of ‘social justice’ and ‘secularism’ as delivery of benefits and services. “Previously, social justice was mostly a political slogan,” she said in her speech. “For our government, social justice is an effective and necessary governance model,” she said, implying the importance of reaching all eligible beneficiaries through what she refers to as the “saturation approach”.
In a country where one’s social position continues to determine one’s opportunities, access to resources and political clout, can we afford to reduce social justice to mere service delivery?
The constitution enjoins upon the state to ensure justice within ‘social, economic and political’ realms. But the BJP wishes to reduce it to only benefit delivery as is evident in its resistance to the demand for a socio-economic caste census. Such a census will enable better policies to ensure political and institutional inclusion of the marginalised community. In fact, the budget allocation for ‘Census Survey and Statistics’ has been cut down, indicating that the government has no intention to undertake a census any time soon.
Similarly, there has been concerted effort from the BJP and the Rashtriya Swayamsevak Sangh (RSS) to claim that Muslims have been a major beneficiary of the government’s welfare schemes as the government has not discriminated among its labharthis. In her budget speech, Sitharaman calls this “secularism in action”.
RSS’s mouthpiece calls this a shift from “appeasement to empowerment”. But can one strip a community of its dignity, its political voice, endanger its citizenship, push them under the shadow of mob terror and bulldozer justice and still claim this “development” to be “all-round, all-pervasive and all-inclusive”, as claimed by the minister in her budget speech?
Speech versus reality: addressing needs of the poor, women, youth, and farmers
She claimed that the budget is focussed on ‘four major castes’ – ‘garib’ (poor), ‘mahilayein’ (women), ‘yuva’ (youth) and ‘annadata’ (farmer).
Let’s analyse whether her claim holds for each of these sections of the populace.
The omission of Prime Minister Modi’s promise to ‘double farmers’ income’ from the budget proposals is an admission of failure in this regard over the last ten years. Additionally, her claims about the farmers are also devoid of the concerns around the fact that during the Modi years from 2014 to 2022, at least one lakh farmers committed suicide, as per the recently released National Crime Records Bureau (NCRB) report. This amounts to nearly 30 suicides per day in these nine years.
In the second term of the Modi government, the number of farmer suicides increased in absolute numbers from 10,281 to 11,290. The number of suicides among agricultural workers rose by 41%, from 4,324 to 6,083.
Not only are the landless tenants overlooked by the PM KISAN Yojana, the flagship scheme referred to by the finance minister, but even when it comes to landholding farmers who are eligible under it, the allocation has stagnated.
Separately, allocation for the Pradhan Mantri Fasal Bima Yojana is marginally lower than the revised estimates for 2023-24. However, its efficacy appears dubious, with only a small sum of Rs 3,878 crore paid in claims to 7.8 lakh farmers during the Rabi season of 2022-23. This raises concerns about the scheme’s ability to effectively support the majority of applicants.
Hyperboles to distract from dismal job opportunities
The finance minister’s pronouncements to cater to ‘entrepreneurial aspirations’ of the youth, branded as ‘Amrit Peedhi’ (a generation that belongs to an auspicious future), seem like clever distractions against the dismal employment outlook that the Modi years have left the country with.
Government figures show that the all-India unemployment rate for all ages in urban areas was pegged at 6.7% (females) and 3.2% (males) in July 2011-June 2012, which has nearly doubled to 9.2% (females) and 5.9% (males) in April-June 2023.
As per the Centre for Monitoring Indian Economy (CMIE), India’s youth unemployment rate continues to climb, with the 20-24 age group experiencing a significant rise. As per CMIE, India has failed to reap benefits of ‘demographic dividend’ as the young population is feeling discouraged to even look for jobs. From 2017 to 2022, the overall labour participation rate (active workforce seeking employment or already employed) plunged from 46% to 40%.
Lack of jobs in the formal sector has forced vast sections of India’s youth to look for opportunities in the precarious and unregulated informal sector. The government’s feeble measures to provide easy loans to the ‘startups’ belittles the enormity of the unemployment and underemployment crisis facing the country. Nor does it address the question of lack of labour protections in the ‘gig economy’, where a number of young people work on meagre returns.
Key schemes for the poor and women
For the poor, the finance minister speaks of the ‘sabka saath’ approach, but allocates grossly insufficient amounts to key programmes.
The National Social Assistance Programme (NSAP) witnesses a meagre 16 crore increase, with the budget inching up from Rs 9,636 crore (BE 2023-2024) to Rs 9,652 crore (BE 2024-2025). The last revision in the amount disbursed per individual happened in 2007, and 16 years later, it still stands at Rs 200 crore. Even a simple inflation adjustment has not been done to this paltry sum, which would have amounted to Rs 618.09 crore.
The National Rural Employment Guarantee Act (NREGA) allocation shows no increase, remaining at Rs 86,000 crores (BE 2024-2025), which was the revised estimate for the year 2023-2024, initially estimated at a low of Rs 60,000 crore. On top of that only to the state of West Bengal, the Union government owes Rs 7,000 crore on the grounds of “non-compliance of directives”. This amount includes Rs 2,800 crore of wage liabilities.
Amidst the rhetoric surrounding women and Nari Shakti, the Integrated Child Development Services (ICDS), rebranded as Saksham Anganwadi & POSHAN 2.0 in the fiscal year 2021-22, has witnessed a gradual decline in its budget. In FY 2014-15 (Actuals), the budget allocated to ICDS alone stood at Rs 16,683.6 crore, in contrast to the Rs 21,220 crore allocated for Saksham Anganwadi & POSHAN 2.0 in the current budget, covering three schemes – Anganwadi Services, Poshan Abhiyan, and Scheme for Adolescent Girl.
Despite the much-touted 128th Constitutional Amendment Bill, the Nari Shakti Vandan Adhiniyam is yet to be implemented, with delimitation deferred until the post-2026 Census. This delay postpones the government’s commitment to reserving one-third of seats for women in the Lok Sabha and state legislative assemblies. The procrastination of the caste census and delimitation also remains in the future, and the government’s claims rely solely on announcements, lacking real implementation.
While the government’s claim of an increase in the number of women participating in the labour force paints a positive picture, it deliberately fails to acknowledge that this rise, post-pandemic, has compelled women to often resort to tedious and low-paid work or self employment due to unemployment and inflation.
An exercise in diversion before the elections
The interim budget showcases the skill of the government to remain unfazed in the face of a grim reality.
In a context where wages of construction and agricultural workers have significantly lagged behind rising food prices, and stress in rural areas has led to a concerning decline in demand, the finance minister’s assertions about “moderate inflation” and “increased real income in rural areas” can be seen as a deliberate denial of the cost-of-living crisis. This crisis has significantly impacted the finances of the common people, leading to gross savings of Indian households hitting a multi-decade low.
The claim that “people are living better and earning better” at a time when the price of home-cooked meals has increased by 65% in the last five years and our Global Hunger Index ranking has slipped further down sounds a wishful distortion of reality. The budget has made misleading claims, such as the “average real income of the people has increased by 50%”. In today’s India, a handful at the top are doing exceptionally well and the incomes of the vast majority are dwindling. The fact that the average income is increasing hides the rising inequality.
Without investing in people, without creating a robust foundation of rights and social infrastructure, without creating decent jobs and without adhering to a sustainable as well as equitable paradigm of development, just riding on increased capital expenditure (Rs 11,11,111 crore) on mega infrastructure and corridors, as espoused in successive budgets, will not benefit the people at large.
The authors work at the National Finance team at the Centre for Financial Accountability, New Delhi.