How Effective Have NDA's SC/ST Budgets Been? An Analysis of the Last Five Years

There is a serious problem when it comes to both allocation and implementation of schemes for SC/ST development.

People who fall under Scheduled Caste (SC) and Scheduled Tribe (ST) groups constitute 25% of India’s total population. As we approach NDA 2.0’s first budget announcement, it is crucial to examine the policy and practice of its SC/ST budgets over the last five years.

It is well established that both groups of people have been excluded from socio-economic opportunities available to others, which has in part caused their marginalisation. The caste system and practice of untouchability not only created an ecosystem of accepted inequality, but also played a vital role in pushing them to the bottom rung on the human development index.

When we talk of SC/ST budgeting, therefore, it is important to understand the development gap and the sub-plans that were created to bridge this divide.

According to the 2017 multidimensional poverty index report, the poverty ratio was 41.30% for SC/ST groups in 2011. However, according to the Ministry of Social Justice and Empowerment, the percentage of SCs classifying as below poverty line in rural areas was 31.5% in 2011-12, as against 15.5% of other communities. In urban areas in 2011-12, it was 21.7% versus 8.2% for other communities.

According to the Tendulkar Committee, the monthly per capita expenditure was Rs 1,252 in rural areas and Rs 2,028 in urban areas.

In order to offset the continuing gap between the SC/STs and the rest of the population, the Special Component Plan (SCP) and Tribal Sub-Plan (TSP) were designed back in 1980. These were to be implemented by the state governments. The major objectives of this policy were to reduce poverty and unemployment substantially in these communities, provide adequate educational and health services, proper drinking water, housing, education, livelihood and so on, by earmarking proportionate funds.

In addition to the macro development initiatives, these policies of SCP and TSP – which we’ll call SC (Dalit) Budget and the ST (Adivasi) Budget – were brought in as micro development policies. These policies place emphasis on an individual, family and hamlet-level direct development approach, by making targeted allocations in the Union Budgets to several poverty alleviation schemes. The funds to these schemes are non-divertible and non-lapsable with clear budget codes – 789 (SC budget) and 796 (ST Budget) – given for any expenditure under these categories.

Five year review of allocation trends

A review of the performance of SC/ST schemes and policies, through an analysis of the Union Budgets in the last five financial years, reveals that there have been four major concerns.

At the outset, there is a gross under-allocation. Secondly, at least half the allocation meant for SCs and STs is actually on general schemes that cannot directly benefit SCs or STs. Thirdly, among the schemes under the SC and ST Budgets, there is substantial underutilisation of funds. And lastly, there are no accountability mechanisms for proper implementation of the schemes.

At each stage, fund leakages are taking place, resulting in only 12%-15% of the total due allocation being utilised for SCs and STs.

The five-year period under consideration includes two years of allocation – FY’ 2015-16 and FY’ 2016-17 – prior to the ‘plan’ and ‘non-plan’ merger, and three years of post-merger including the interim budget presented earlier this year in February 2019.

As can be seen in the charts below, for these five years, out of the total amount due as per the policy, 51% was denied to SCs and 41% denied to STs. Even of the allocated funds of Rs 2,55,495 crore for the five-year period, it is observed that Rs 1,11,583 crore went towards targeted schemes directed at SCs, while the rest, Rs 1,43,912 crore, was allocated for general schemes.

If one compares this to the total allocation, only 21% of the funds were directed to SC development. The trend is similar for the allocation of ST funds.

Nature of allocation

How well have the SC/ST budgets and the schemes under them been executed? An analysis of the Union Budget in the last five financial years reveals that a majority of allocation under the Dalit and Adivasi Budgets are towards schemes and programmes that were non-targeted in nature and had no ‘direct’ impact on the development of Dalits and Adivasis.

In FY’ 2019-20, as per the guidelines issued by the Ministry of Finance under the new arrangement for earmarking funds for the SC budget, 41 ministries are supposed to allocate funds of Rs 1,39,669 crore for 315 schemes for SCs. However, the actual allocation is only Rs 76,801 crore – only 50% of the due amount.

An analysis of the 315 schemes designed for SCs shows that only 89 are targeted. The rest are non-targeted, amounting to Rs 41,391 crore. In addition to the denial of fund allocation, this kind of allocation to non-targeted schemes is another major gap.

Legislation for targeted budgeting

In any country, strong fiscal law is extremely critical for Budget transparency, accountability and to ensure sustainable development as far as effective and efficient public finance management is concerned. With regard to the Dalit and Adivasi Budgets, states like Andhra Pradesh, Karnataka and Uttarakhand have SCP and TSP legislations for better resource allocation and utilisation, to ensure real development for the targeted beneficiaries.

But unfortunately, the Union government doesn’t have  proper fiscal legislation for the Dalit and Adivasi Budgets. As a result, huge fund diversions are taking place for other purposes.

In 2013, the Congress-led Centre followed all procedures to bring forth a Central SCP and TSP legislation, which included drafting in consultation with civil society. However, it hesitated to introduce it in parliament.

If a legislation like this is to be drafted, it must be given serious consideration, with the involvement of SC/ST communities and experts.

The implementation of Dalit and Adivasi Budgets has been problematic across the years, both at the Central and state levels. The merger of the ‘plan’ and ‘non-plan’ components in the Union budget has further impacted this.

For instance, till 2016-17, the estimation of the sub-plans was done exclusively from the planned component of the Budget. As per the new guidelines issued by the Ministry of Finance, states’ funds are now from the pool of schemes comprising CS (Central Sector) and CSS (Centrally Sponsored Schemes), and not from ministry and department allocation.

Over the last five years, there has been an increase in the total expenditure of the Union government, but the allocation towards the development of SCs and STs is negligible. Several schemes which directly benefit SCs and STs are facing a funds crunch. Year after year, Dalit and Adivasi Budget allocations have been routinised, trivialised and converted into a statistical post-facto accounting exercise.

Analysis of utilisation

The above figures also say that fund utilisation has improved over the years. But in reality, as per the SDG Index India report, the actual utilisation is only 68% of the SC Budget and 75% of the ST Budget (for the years 2015-2018). The following table gives a clear picture of how much targeted allocation are made out of the massive under-funded proportion of allocation.

For instance, in FY 2017-18, the proportion of allocation was 8.9% against the due share of 16.6% under the Dalit Budget. Out of that, the government utilised only 6.1%. Moreover, out of this underfunded allocation, only 4.4% was a targeted allocation.

Actual expenditure shows the real picture on fund utilisation. The issue of budget credibility relies upon the approved budget vs the utilisation amount. The figures below reveal the truth about underutilisation during the last five years.

In FY’ 2017-18, the approved Dalit Budget was Rs 52,393 crore, of which the utilised amount was Rs 49,492 crore – resulting in an unutilised amount of Rs 2,901 crore. Similarly, under the Adivasi Budget in FY’ 2017-18, the allocation was Rs 31,920 crore, of which the utilisation was Rs 31,914 crore.

Budgets and public entitlements are poorly implemented, even though the SC and ST plans are very much key to bridging the gap between Dalits, Adivasis and the other castes. However, several schemes also need a rethinking – they are archaic and do not take into account today’s context.

The planning process does not make community participation mandatory, which often means affected groups are left out. Macroeconomic concepts alone will not be a solution for the country’s development gaps; specific and targeted plans will have a better impact if implemented well.

It is also important to have special focus on Dalit and Adivasi women, which has been missing so far. Without this, they will continue to fall between the cracks. A special component for Dalit women should be created within the SCP and TSP.

One possible solution for effective implementation of the plans is to make sure that they are legislated. This will ensure people can hold the state accountable. In addition to legislation, a strong monitoring mechanism should also be put in place.

N. Paul Divakar, Adikanda Singh, Juno Varghese and Beena Pallical work the the Dalit Arthik Adhikar Andolan-National Campaign on Dalit Human Rights.