Jharna Das Baidya: Union Budget 2017-18 No Vision for Growth; No Vision for Improving People’s Interests

March 24, 2017

At a time when the common people of India are reeling under the disastrous impacts of demonetisation, the Finance Minister has come out with a contractionary budget which is likely to greatly exacerbate suffering of the working people.

The Economic Survey clearly shows a deceleration in economic growth, a sharp fall in demand for goods and services, massive job losses, decline in farm incomes, and social disruption in cash-intensive sectors. Demonetisation has resulted in large unutilized industrial capacity, with core industries like automobiles, cement, steel, paper, aluminium and fertilisers having been hardest hit, and massive unemployment. It is a travesty that, in such a situation, and despite having 40 million tonnes of public foodstocks, and a comfortable current account deficit and foreign exchange situation, the government wants to pursue contractionary fiscal policies. It  is an  insult to the working poor and women of this country who have been bearing a disproportionate burden of the hardships due to demonetization.

The total size of the budget has come down from 13.4 per cent of GDP last year (Revised Estimate) to 12.7 per cent of GDP this year. The fiscal deficit target has been achieved through expenditure reduction. The total revenue receipts have come down from 9.4 per cent of GDP in 2016-17 Revised Estimate (RE) to 9 per cent of GDP in Budget Estimate (BE) of 2017-18. Taxes forgone due to budgetary measures have gone up by about Rs. 30 thousand crores and are put at 2.1 per cent of GDP.

The Budget presented by the Finance Minister starts with an assumption of 11.75% growth in GDP for 2017-18 calculated over the revised figures of 2016-17. Analysis of the allocations under the SCSP the TSP reveals a recurring trend of under-allocation in 2017-18, wherein the SCSP comprises only 2.5% and the TSP only 1.53% of total allocations, which is not even the half of the mandated amount.

Food (including the allocations under the National Food Security Act), kerosene and LPG subsidies have a direct impact on women. The share of these in the budget has come down from 9.5 percent in 2015-16 to 7.9 percent in 2017-18. Moreover, there is no gender budget component in any of these except the LPG subsidy which is a miniscule Rs 3,200 crore.

The finance minister also stated that the allied sector of dairy development and fisheries (which provides livelihood to a lot of women) would receive a major boost through an increased allocation of Rs 8,000 crore. However, there is no women specific allocation in either dairy or fisheries. The only agricultural scheme that has allocations for women in the agricultural sector is the National Food Security Mission where a nominal increase of Rs 60 crore has been made in the gender budget, which actually accounts for less than 30 percent of the entire allocation. Given the fact that majority of women are dependent on agriculture for their livelihood, the dismal allocations and absolute cut of 50 percent in the Mudra and other credit guarantee schemes show the absolute callousness towards women and to agriculture which is a continuing feature of this government’s policies. 

The allocation to anganwadis does not even compensate for the cuts since 2015-16 and in real terms shows a decrease. Anganwadi workers’ right to regular payment of wages will be adversely affected. Similarly, the interests of the ASHA workers and all scheme workers have been compromised.

ICDS Budget 2017-18, like the previous budgets, has criminally neglected India’s eight crore malnourished children under six and two crore pregnant women and lactating mothers by not increasing the allocations for the Integrated Child Development Scheme (ICDS). The Budget Estimates for the ICDS (core) 2017-18 is only Rs 15,245.19 crore. It is even less than the budget allocation for ICDS in 2015-16 which was Rs 15,433.09 crore and Rs 18,108 crore in 2014-15. It is only half of the 12th Plan allocation for ICDS for the year 2017-18 which is Rs 30,025 crore.

The budget boasts about the much promoted prime minister’s announcement of the maternity benefit of Rs 6,000 to pregnant women. This is nothing new and it has been included in the Right to Food Act. But ironically the amount earmarked for the Maternity Benefit programme is a mere Rs 2,700 crore which will cover only 17 percent of the 2.6 crore live child births per year in India. These maternity benefits come as a cash transfer scheme on the condition of institutional deliveries.

A dangerous move made in the budget is the announcement by the finance minister to set up ‘Mahila Shakti Kendra’ in the anganwadi centres. This is nothing but putting the anganwadi centres at the disposal of the corporates.  In the present situation half of the anganwadi centres are not even having basic facilities such as drinking water or their own building. Though there are no proposals for direct cash transfer in place of schemes like ICDS, the Economic Survey sets the direction for direct cash transfer in the name of the Universal Basic Income Scheme. In Telangana, direct cash transfers have been started on an experimental basis, in place of ICDS.

The increased allocation of Rs 2700 crore for maternity benefits comes as a cash transfer scheme on the condition of institutional deliveries. The government remains unresponsive to the evidence of problems with cash transfers that has been brought to its notice repeatedly.

The government has completely failed to respond on the issue of rising violence against women, and the need to ensure budgetary support for survivors of violent crimes. This can be seen in the atrocious cut in the allocation of resources for the Nirbhaya fund. The revised estimate for the Nirbhaya fund in 2016-17 was Rs 585 crore and this has been now cut to Rs 400 crore.

The total Schemes for Scheduled Castes has been reduced from 294 to 256 only and the total schemes for Scheduled Tribes is brought down to only 261 from 307 in 2016-17. Only 11 new schemes for SCs and 8 new schemes for STs has been introduced in 2017-18.

In Budget 2017-18 allocated Rs 52,393 crore for SCs and 31,920 crore for STs. This amount is 2.50% of the total Budget estimate. 1.19% of the total allocation for SC/STs has been allocated for SC women and 1.68% for ST women. Overall allocation for gender budget is only 0.99%.

Women from Dalit and Adivasi communities find themselves triply discriminated against based on their caste/tribe, class and gendered location. Any developmental approach needs to factor in their needs by adequately redistributing resources in their favour as well as ensuring appropriate access to enhance their capabilities. 

The Finance Minister repeatedly talked about doubling incomes of farmers. This does not reflect in any increase in outlays for agriculture. The allocation for Department of Agriculture, Cooperation and Farmers' Welfare has fallen from 1.98 per cent of total expenditure in 2016-17 (RE) to 1.95 per cent of total budgetary outlay in 2017-18. There is no increase even in the major flagship programmes of the government, and the government seems to be relying only on the banking system for achieving this.

Allocations for the northeast region

In the Union Budget of 2017-18, the total allocations for the development of the northeast region has been increased from Rs 32,180.08 crore to Rs 43244.64 crore, which is exclusive of TSP and SCSP allocations. In addition to this, a total of Rs 716 crore from the TSP and Rs 53 crore from the SCSP has also been allocated for the Ministry of Development for North East Region. But still, other than one single scheme for skill development, there has been no other new scheme introduced for the development of the northeast region. It shows that there have been major budgetary cuts for the programme related to food and public distribution, electronics and information technology, environment, forest and climate change and urban development.

No major plans have been announced for the northeastern region which badly needs industry and infrastructure.
The proposal to reduce income tax for MSMEs with an annual turnover of under Rs. 50 crores ignores the interconnected-ness of the Indian corporate sector, and opens up a new avenue for corporate tax evasion.

Overall, the budget shows a total callousness and ignores the sufferings of women. There are massive cuts in social and economic welfare. The freezing of inadequate allocations in real terms to education and health will hit the working poor and women even further. The surrender of goals like the alleviation of poverty, focusing on the special needs of women, dalits, tribals and other deprived sections of society through the allocation of budgetary resources for them, in favour of tax cuts for the corporate and the elite classes exposes the real anti-people agenda of the government

To sum up, this budget not only ignores but also imposes further burdens on the people in the wake of demonetisation and widespread deflationary conditions. This budget clearly upholds the interests of the market. It has no place for women.. It is once again a blatant attack on the poor and the oppressed. This is a budget to appease the rich accentuating the problems of unemployment and rising inequality.