'Social Security Spending Imperative': Advocacy Group's Demands From Budget 2022-23

Jan Sarokar, a national policy advocacy group, has issued a statement detailing various demands and expectations from the upcoming Union budget which focus on increasing social security spending in areas such as job creation, food security, security of sexual and ethnic minorities and more.

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New Delhi: Jan Sarokar, a public interest policy advocacy group in India consisting of civil society organisations, social movements and academics, has issued a statement addressed to finance minister Nirmala Sitharaman on certain demands and expectations from the upcoming Union Budget, set to be presented on February 1.

The expectations detailed in the statement focus on reviving the Indian economy through equitable development, ensuring social justice and ecological sustainability. In the context of the ongoing coronavirus pandemic and the widening of inequality it brought on, the statement details what members of the group would like to see in specific sectors vis-a-vis government policy and public expenditure.

Effects of the pandemic

The statement notes that India’s had been witnessing declining economic growth even before the pandemic, however, the most vulnerable sections of Indian society have had to bear the brunt of its adverse effects.

The statement highlights rising income and wealth inequality in the country – citing reports on the subject from Oxfam and the World Inequality Lab – as well as increasing unemployment and poverty and falling household incomes. 

While these are pressures that a cataclysmic event such as the pandemic would naturally put on an economy, the statement details the differences in responses between India and the world. Many governments spent vast amounts of money to revive their economies; loan and interest waivers, spending on social security to compensate citizens for job and other losses and to improve health outcomes and so on. 

India, on the other hand, spent far too little, the statement says. Budget 2021-22 saw virtually no change in allocations for health, food security, pensions and so on and actually saw decreased spending for some sectors, such as education. 

Government’s response on resource mobilisation

Apart from its grossly inadequate spending on social security, the statement pulls up the government for the way in which it has sought to finance this spending; that is, through selling public assets “acquired over a period of 75 years” by raising resources through the National Monetisation Pipeline. 

By privatising PSEs, government banks and insurance companies and thereby “dismantling the public sector, the government has been “subjugating our national  economic interests, our economic independence, and sovereignty to the interests of  international finance capital and corporate entities,” the statement reads.

Instead, members of Jan Sarokar suggest that the government mobilise resources in different, more equitable ways. 

Firstly, the statement notes that there is significant unutilised capacity and foodgrain stocks in the country such that larger government expenditure, even if financed through a fiscal deficit rather than by raising additional taxes, would be able to use up these stocks without generating inflation.

The statement notes, however, that this “would unnecessarily put wealth into private hands in the form of claims on the  government.” To avoid this, the statement suggests financial resource mobilisation through the floating of two taxes; a wealth tax and an inheritance tax on the richest 1% of the population.

The statement says that the richest 1% owns about 40% of private wealth, about Rs 300 lakh crore. Therefore, even a 2% wealth tax would give the government Rs 6 lakh crore to spend on the economy. Moreover, if the wealthy decide to, conservatively, pass down 5% of their wealth to their children, an inheritance tax of 33.3% would yield another Rs 5 lakh crore.

Thus, the statement details an alternative model for the government to fund potential social security spending.

Also read: What We Could Hope For – But Should Not Expect – in Budget 2022-23

Expectations from Budget 2022-23

In this context, the statement lays down certain expectations from the upcoming Union budget, demanding a shift of the government’s focus” towards the interest of the larger majority instead of the minuscule minority such that the Union Budget can fulfil the aspirations of every citizen of India.”

NREGA: The National Rural Employment Guarantee Act, 2005, requires, by law, that households covered under the scheme are provided with 100 days of employment in a year. Citing a report by People’s Action for Employment Guarantee, the statement notes that Rs 2.64 lakh crores will be required to provide employment to the same number of households that worked in FY’ 2021-22. 

Moreover, the statement cites a study by the NREGA Sangarsh Morcha that Rs 3.36 lakh crores would be required to provide the same for all households with active job cards.

The Jan Sarokar members also noted a trend in the past that, by the third quarter of any given year, funds allocated for NREGA begin to dry up. “As a result, work slows down and delays in wage payments escalate… We demand timely disbursal of wages and an increase in funds,” the statement reads. 

The statement also demands that wages under NREGA be revised in line with the Consumer Price Index – Rural (CPI-R) so that the wage offered is at least equal to the minimum wage offered in states.

Food security: In this regard, the statement demands that the Public Distribution System (PDS) be universalised “to give subsidised rations to everyone who demands it.” 

It seeks for the National Food Security Act (NFSA) to be expanded on the basis of population projections for 2022 to include the most vulnerable people in society, “especially migrant workers, the homeless, sex workers, trans people and all vulnerable communities, even without  ration cards.”

The statement also demands that the PDS be expanded to include millets, pulses, oil and other nutritious commodities and to procure these at MSP from local farmers wherever possible in order to incentivise diversified production.

Further, the statement seeks the revival of hot cooked meals provided under the Integrated Child Development Services (ICDS) and the midday meals scheme under local gram sabhas and panchayats rather than private contractors and the inclusion of nutritionally dense meals in these schemes.

Finally, regarding food security, the statement demands that maternity entitlements should be universalised and made unconditional and that the benefit should be increased to Rs 6,000 per child.

Pensions: The statement demands that coverage under the pension scheme be expanded to all households which do not meet even one of the seven criteria for economic well-being put forth by the Socio-Economic and Caste Census (SECC). If the SECC is applied to all potential beneficiaries and not just widows, the number of people covered under the scheme would be increased from the current 33 million to 109 million.

Moreover, the statement demands that the amount to be paid should be indexed to inflation and should undergo regular revisions.

Finally, the statement calls for a substantial increase in allocation for pensions, saying, “Provisions for the elderly, disabled and widows cannot be a matter of fiscal availability but are a matter of the right to a life of dignity.” As such, it calls for the present “meagre” allocation to be increased from 0.45% of GDP to at least 1.45% of GDP.

Also read: A Pandemic and a Union Budget: A Study in Three Acts

Agriculture and allied sectors: The statement calls for the provision of loan waivers to small farmers with land holdings smaller than five acres. It also demands that support under cash transfer schemes be made available to tenant and woman farmers as well as rural workers in the sector and to offer these groups support under the MGNERGA by making “on-farm sustainable farming-related tasks and functions eligible for MNREGA investments.”

Moreover, the statement calls for the government to protect farmers from profiteering by corporates by controlling input prices and involving the public sector in making these inputs available to farmers to make farming remunerative and sustainable.

It also implores the government to support “the practice of integrated nutrient management, agroecological crop protection, including integrated pest management, providing seeds for ecologically diversified agriculture and so on.”

The statement also demands budgetary allocation of funds for the implementation of the MSP regime and to make public procurement of produce widely available by providing support for decentralised storage and marketing.

It also calls for expanded public investment in the sector to support small cooperatives and non-farm business; watershed development, flood control and climate adaptation; and to expand research through state agriculture universities (SAU), the Indian Council for Agriculture Research (ICAR), the National Bank for Agriculture and Rural Development (NABARD) and so on.

Banking and finance: In this regard, the statement’s first demand is for the withdrawal of the proposal to amend banking laws to privatise public banks.

It also calls for priority-sector lending to be stepped up to 50% of total loans with a sub-target of 10% for loans below two lakhs.

Additionally, the statement demands that the 11 lakh ‘bank correspondents’ be converted into bank employees; customer service points be converted into bank branches (both of which would also help with the problem of job creation); bank charges for low and middle income customers be removed; and the National Company Law Tribunal (NCLT) be wound up with stringent rules for recovery.

Importantly, the statement calls for LIC’s IPO to be stopped since “LIC is owned by policyholders who get 95% of their profit as bonus and who have contributed Rs 95 crores to capital and Rs 1.86 lakh crore to the solvency margin.

Also read: As the Clock Ticks Towards LIC IPO, What Policyholders Should Consider

Dalits and Adivasis: In her budget speech last year, the finance minister had talked about an increase of Rs 35,219 crore towards Post Matric Scholarship (PMS) for 4 crore Scheduled Caste (SC) students. However, last year’s budget allocation for SC students was only Rs 3,415.62 crore and for STs, it was 1,993 crore. Calling this sum “inadequate”, the statement calls for the allocation of at least Rs 7,000 crore for this section of students.

Moreover, the statement demands that a specific allocation is made for Dalit women as well as a special component plan for them.

Additionally, the statement seeks allocations towards access to justice for the country’s marginalised population, which includes Dalit men, women, persons with disabilities and sexual minorities. To this end, it seeks for the establishment of special courts for quick trials and increased compensation for victims of caste and ethnicity-based atrocities.

Persons with disabilities: The statement calls for the introduction of ‘disability budgeting’ with 5% allocations to be made across all ministries and an increase in allocations to the Department of Empowerment of Persons with Disabilities under the Ministry of Social Justice and Empowerment.

It also calls for a uniform disability pension of at least Rs 3,500, linked to price indices and the provision of Antyodaya Anna Yojana (AAY) cards to persons with disabilities. 

Moreover, the statement calls for free, universal health coverage to all persons with disabilities including life and other insurance coverage, coverage of assistive devices and rehabilitation needs and greater allocations for mental health programmes. It also seeks the removal of the income criteria under the Pradhan Mantri Jan Arogya Yojana, tabling the proposal to cluster various national institutes engaged in providing rehabilitative services and rejecting Public-Private Partnerships (PPS) in this regard.

Small-and-medium-scale industries and crafts: The statement calls for a substantial increase in allocations for the creation of small-scale industries based on local ecological conditions with a focus on building upon local knowledge. These industries would be run by worker cooperatives. 

It also calls for increases in reservations in the textile, footwear and household items sectors which can be produced by such enterprises.

Moreover, the statement calls for a “substantial increase in allocations for sustaining and reviving crafts, the removal of GST and other taxes on handmade goods and assistance in marketing such produce.

Gender: The statement demands increased allocations for the National Social Assistance Programme (NSAP) of which women and transgender people comprise 59.2% of beneficiaries, in light of the increased vulnerabilities highlighted amongst this section of the population due to the pandemic.

It also calls for a debt moratorium for all women in debt and the regulation of Microfinance Institutions (MFI), capping their interest rates.

Moreover, it calls for increased allocation for schemes in Part A of the Gender Budget (schemes meant exclusively for women), in particular, for those schemes regarding the safety and protection of women, given increased violence against women being seen of late.

The statement also calls for the inclusion of the Transpersons Budget in the Gender Budget.

Also read: A Gender-Discriminatory Crisis Requires a Gender-Responsive Union Budget

Environment: The statement demands a budgetary allocation of at least 4% to safeguarding the environment which could be used to curb pollution of various kinds, help communities conserve ecosystems and biodiversity, incentivise decentralised clean energy sources and replace wasteful, toxic products with ecologically sensitive ones.

It also calls for the establishment of the post of an Environment Commissioner to ensure compliance with environmental norms, policies and laws.

It also calls for increased allocation for “population-proportionate funds and a basket of schemes for direct disaster risk reduction (DRR) and climate change adaptation (CCA) programmes to support rural and urban communities to take steps for climate mitigation and adaptation, including building or sustaining climate resilient livelihoods, settlements and living conditions; localised infrastructure rather than mega-linear projects; and public transport.”