Economy

Budget 2019 Shows Centre’s Neglect of Comprehensive Social Protection

While the budgetary figures give the impression that the government is staying the course with many social welfare programmes, it may well be chipping away the architecture of social protection in India.

There is widespread agreement that social protection, for the large part, is the responsibility of the state. It is broadly understood as measures to reduce poverty and vulnerability by reducing people’s exposure to risks, and enhance their capacity to manage those risks, including those associated with unemployment, exclusion, sickness, disability and old age.

Extending such support to the poor and vulnerable is, in fact, a prominent part of the United Nations Sustainable Development Goals (SDGs) (Goal 1.3). The Union Budget presented annually offers an opportunity for the government of India to highlight its policy priorities. The Budget speech itself customarily dwells on allocations to different programmes including social assistance, insurance and labour-market interventions. Although the Budget is rarely viewed as the authoritative statement on government’s intent and actions, a scrutiny of the allocations is useful to see if it is consistent with stated policy and also, if it is commensurate with the task at hand.

This was a different Budget in unfortunate ways. Rarely have we encountered a Budget in recent years that did not allude to many of the pressing concerns of our time or of an explicit recognition of the state’s role in social protection. Poverty was mentioned only once in the context of the proposed initiatives on tackling black money [para 7]. Employment and jobs find mention in the very limited context of a supportive tax policy to support job creation, building skills and regeneration of traditional industries.

While the thrust is, rightly, on the need for job creation, there is no explicit acknowledgement of either the current unemployment situation and widespread rural distress, or the need to provide credible safety nets for those vulnerable to income shocks. For example, there was no mention of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), despite its well-established role as a credible safety net and its role in times of rural distress.

Nor is there any mention of malnutrition – a stubborn problem that requires substantial investments, especially targeting mothers, children and adolescent girls. Health too got short shrift, other than references to the Swachh Bharat Abhiyan, and a brief allusion to health in the Budget’s vision statement. To the extent that the Budget signals the priorities of the government, it would seem that a well-defined agenda for broad-based social protection is missing from the government’s vision as it endeavours to build a US$5 trillion large economy.

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What then do we actually have in terms of allocations to social protection programmes? It is worth keeping in mind that budgetary allocation to a specific programme is often not what is eventually spent. For example, whereas the National Social Assistance Programme (NSAP), a cluster of programmes that include pensions to the elderly, disabled and widows was allocated Rs 9,975 crores in 2018-19, the revised estimates were lower at Rs 9,200 crores.

The reverse could be true as well. For example, in January 2019, an additional Rs 6,084 crores was allocated to MGNREGA, in addition to the 2018-19 budgetary allocation of Rs 55,000 crores, owing to the unanticipated demand for work under the scheme. Assessments of budgetary allocations therefore require caution.

Table 1 presents allocations of major centrally-funded schemes representing a few aspects of social protection – employment guarantee, specific food-based schemes to forward maternal and child nutrition, pensions and cash assistance to widows and cash transfers to pregnant and nursing mothers and health interventions such as insurance.

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Table 1 places the 2019-20 allocations against actual expenditures for 2017-18, budgetary allocations for 2018-19, and subsequent revisions for 2018-19, where relevant.

Table 1. Budget allocations for 2019-20 against actual expenditures for 2017-18, budgetary allocations for 2018-19, and revised allocations for 2018-19

Programme Budget 2019-20 (Rs crores) % change over 2017-18 actuals % change over revised 2018-19 estimates % change over 2018-19 budget estimates
Mahatma Gandhi National Rural Employment Guarantee Programme 60,000 8.8 -1.8 9.1
National Programme of Mid Day Meal in Schools 11,000 21.0 10.6 4.8
Indira Gandhi National Old Age Pension Scheme (IGNOAPS) 6,259 2.4 4.8 -4.7
National Family Benefit Scheme 673 26.8 -0.4 -12.9
Indira Gandhi National Widow Pension Scheme (IGNWPS) 1,939 6.7 -1.5 -14.1
Indira Gandhi National Disability Pension Scheme (IGNDPS) 247 11.8 -4.6 -10.7
Anganwadi Services (Erstwhile Core ICDS) 19,834 30.9 10.9 21.4
Pradhan Mantri Matru Vandana Yojana (PMMVY) 2,500 22.1 108.3 4.2
Scheme for Adolescent Girls 300 -33.4 20.0 -40.0
National Creche Scheme 50 2.5 66.7 -61.1
National Health Mission (Rural and Urban) 32,995 4.7 7.5 9.5
Rashtriya Swasthya Bima Yojna (RSBY) 156 -65.8 -48.0 -92.2
Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY) 6,400 N.A. 166.7 N.A.

The budget allocations for most of the social protection programmes represent only marginal increases from the previous year, in many cases, barely compensating for the inflation rate. In virtually all of the cases, however, they fall well short of what is required to achieve comprehensive and credible social protection.

They also represent a missed opportunity to redress some serious shortcomings in many of the programmes. For example, pensions for the elderly and for widows are paltry at Rs 200 per month and have remained unchanged since 2006. The ICDS (Integrated Child Development Services) allocations are barely enough to cover the increased salaries for anganwadi workers and helpers, announced earlier in 2018.

This leaves little for the critical improvements required in basic anganwadi infrastructure and services. The PMMVY (Pradhan Mantri Matritva Vandana Yojana), a critical support for pregnant and nursing mothers has an allocation of Rs 2,500 crores (about 4% higher than the previous year’s budget estimates). The PMMVY transfer stands at Rs 5,000 per mother (as opposed to Rs 6,000 mandated by the National Food Security Act), is contingent on a host of conditionalities and is restricted to the first child.

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These recent changes already represent a retreat of support to a critical segment and represent neither expanded coverage nor larger per capita allocations. The fact that it represents a 108% increase over the revised 2018-19 estimates merely suggests that the programme has not gained any traction.

MGNREGA allocations are down from the Rs 61,084 crores relative to the 2018-19 revised estimates. This is in a situation where the demand for MGNREGA has recently routinely outstripped allocation. Critiques have already emerged on the inadequacy of allocations to the health sector which fall well short of the health policy commitment to ramp up public health spending to 2.5% of the GDP (gross domestic product). Further, schemes that have seen the largest increase in allocations such as the PMJAY (Pradhan Mantri Jan Arogya Yojana), are designed to compensate private providers for health services to the poor.

Naturally, this is not a comprehensive view of social protection and there exist several other initiatives, which collectively have significant allocations. However, this does not detract from the fact that this Budget offers clear signs of benign neglect when it comes to comprehensive social protection. Interestingly, the only use of the phrase “social welfare” in the Budget speech is in the context of enabling voluntary organisations to raise funds in capital markets [para 34]. While the budgetary figures give the impression that the government is staying the course with many social welfare programmes, it may well be chipping away the architecture of social protection in India.

Sudha Narayanan is with the Indira Gandhi Institute of Development Research.

This article was originally published on Ideas For India.

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