This year’s Budget was presented in the backdrop of a widespread Economic Slowdown with even RBI’s GDP estimate for this fiscal year at 5% and the veracity of these numbers are in serious question, unemployment at multi-decade highs and severe agrarian crisis. In this climate of mounting miseries of the people, Modi Govt has stuck to its Neoliberal dogma and utter disregard for not just people’s sufferings but also well understood prescriptions of stimulus spending by mainstream economists during periods of slowdown in Capitalist economies.
Modi Govt’s callousness towards agrarian crisis and four decade high unemployment figures is starkly visible in MNREGA allocation in this year’s budget. MNREGA by law provides guaranteed employment of 100 days to any adult in rural areas willing to do manual work. Even before this budget the MNREGA allocation was grossly inadequate to satisfy this legal guarantee throughout the country. This year’s allocation for MNREGA is Rs 61,500 crores, as compared to Rs 71,000 crores in FY 2019-20 revised estimates. This is a cut of Rs 9500 crores in nominal terms and the cut is even more extreme when measured in real terms. That in face of stubbornly high unemployment the Govt would actually cut allocation for a program which has the ability to generate employment in rural areas where its most needed and to the most vulnerable which would result in immediate consumption and hence increased rural demand just defies any logic.
During last year’s general election, BJP had promised to double Farmer’s income by 2022. This year’s budget figures make it clear that they have no intention of even pretending to keep their promise in this regard as is the case with most of Modi’s Jumlas. The allocation for fertilizer subsidies has been cut by almost 11% in nominal terms over the last year. Of the budgetary allocations to agriculture & allied activities, the revised estimates for last year shows a cut of Rs 28000 crores over budgeted estimates. Even in the PM-KISAN scheme which was announced with much fanfare just before last elections promising to give every farmer Rs 6000 per year, the shortfall in spending amounts to Rs 20000 crores. By the Govt’s own estimates only 26% of eligible farmers have received their full payment under this scheme. The drastic cut in Food Subsidy spending and budgetary allocation, which is discussed in the following paragraph, also shines the light on the hollowness of Govt’s announcements regarding increases in crop MSPs made before the last election. In fact, there is a shortfall in expenditure when revised estimates are compared to budgeted estimates of the current Fiscal year on every single scheme of Ministry of Agriculture & Farmers Welfare.
The expenditure on food subsidy was massively cut last year, and that is extended to the coming year. In FY2019-20, govt allocated Rs 1.84 lakh crores to food subsidies but the revised estimates have been reduced to Rs 1.08 lakh crores. This year's allocation, at Rs 1.15 lakh crores, is 37% less than what was budgeted last year. This at a time of growing starvation deaths and malnutrition. UNICEF’s report in 2019 states that more than half of India’s children face some form of malnutrition. This includes 35% stunted and 17% wasted children. The report further states that only 42% of children (in the age group of 6 to 23 months) are fed at adequate frequency. India leads the world in number of malnourished children and has fallen to the rank of 112 from 95 in the global hunger index.
The Mid-day Meal Scheme, the Government’s National school meal programme, designed to better the nutritional standing of school-age children saw no increase in its budget allocation at Rs 11,000 crores. This is effectively a cut of about 5% in real terms given the current CPI figures. What is more is that the Govt actually spent less that the budgeted amount with revised estimates coming at Rs 9,912 crores for the current fiscal year.
Similarly, the Anganwadi services allocation which provide funds for running rural child care centers along with nutritional supplements for children saw a drop in spending of Rs 2130 crores from the budgeted amount of Rs 19,834 crores with the revised estimates for FY 2019-20 coming at Rs 17,704 crores. This Budget’s allocation is Rs 20,532 crores, a mere 3.5% increase. Total umbrella-ICDS shows a similar pattern with a shortfall in spending of Rs 2630 crores this fiscal and an increase in allocation of 3.5% for next year. The Govt has taken no cognisance of the Anganwadi Workers’ and Helpers’ long standing demands for salary increase. This criminal neglect of children’s nutritional needs and their care-givers is made more egregious by the fact that while the Govt is stealthily cutting spending even from the inadequate budgeted amounts, it is then diverting the money to Corporate Tax Cuts and loan write-offs.
The stinginess on this Govt’s part extends to overall allocation for Welfare of Children. The revised estimates for allocation for welfare of children for FY2019-20 comes at Rs 87,641 crores as opposed to budgeted estimates of Rs 91,644 crores which amounts to a shortfall in spending of 4000 crores this Fiscal.
Govt’s expenditure on education fares no better. Total allocation to higher education doesn't also keep pace with inflation with an increase of mere 3% as compared to last year. Total funding for University Grants Commission (UGC) has gone up by a paltry 2%. The total grants to Central universities has dropped to Rs 7642 crores from this fiscal’s revised estimates of Rs 8286 crores - a drop of Rs 643 crores. This drop is more stark if one removes the HEPA loan interest and principal repayment amount. The drop in actual funds to the Universities is a whopping Rs 1244 crores which works to a 16% cut. The Total spending on Research and Innovation has been nearly halved from an already ludicrous Rs 608 crores to Rs 307 crores. Clearly, improving Higher Education and Research doesn't fit into the RSS vision for the future of India.
The less said the better for allocations to the marginalized sections of society which is no surprise given RSS’ ideological commitment to Manuvadi values. Revised Estimates for welfare of Schedule Castes for FY2019-20 comes at Rs 72,936 crores as opposed to budgeted estimates of Rs 81,340 crores which is a shortfall of Rs 8400 crores. Budget 2020 allocation for welfare of Schedule Castes is 83,256 crores. This is merely 2.73% of Total Budget expenditure down from 2.9% last year and much less than the guideline of 16% to be set aside for SC Welfare.
Allocation for welfare of Schedule Tribes fares no better with revised estimates for FY2019-20 at Rs 49,268 crores as opposed to budgeted estimates of Rs 52,883 crores - a shortfall in spending of Rs 3615 crores. This year’ budget allocation for welfare of Schedule Tribes is Rs 53,652 crores which is merely 1.76% of Total Budget expenditure down from 1.9% last year and much less than the guideline of 8% to be set aside for ST Welfare.
Women's budget allocation in this year’s budget is Rs 1,43,461 crores compared to revised estimate for FY2019-20 at Rs 1,42,813 crores. An increase of 0.45% over last year, well below the rate of inflation. The share of women’s budget allocation has been further cut to 4.7% of total expenditure as compared to 4.9% in last year’s budget and 5.1% the year before that.
No increase in budgetary allocations, to keep pace with inflation or growing population, have been earmarked for either the Widow or the Old Age pension schemes.
Even for PM Modi’s pet schemes announced in his first term, the spending shortfall has been brutal. Namame Gange’s spending shortfall is 50% of its budgeted allocation of Rs 700 crores this fiscal. Swachh Bharat Mission had a spending shortfall of Rs 1656 crores this fiscal which amounts to 16.56% of the total budgeted amount. There is no spending increase to match inflation for even this mission in this budget.
Govt has made its priorities very clear in this Budget. It doesnt give two hoots about Farmers, Unemployed, Students, the Marginalized sections, Children & Women - that is the people of this country. With Corporate Tax at 15%, one of the lowest in the World as per Govt's own admission, this Govt is there only to serve the interests of Corporate Cronies!