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Reading between the lines: Forget the rhetoric, this is no Budget for India's poor -Harsh Mander
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India's social-sector spending remains woefully low and despite claims of being a pro-farmer Budget, the effective allocations are nearly the same as last year.

Some commentators expected that the Union Budget 2017-’18 would craft a sharp departure from earlier budgets of this government. This it would do to mitigate the immense suffering of millions of casual workers, farmers and small traders caused by the “shock and awe” of the astoundingly callous and ultimately pointless decision to withdraw 86% of the country’s currency overnight.

Prime Minister Narendra Modi, Bharatiya Janata Party President Amit Shah, the government and its supporters continue to put up a brave face while talking about the demonetisation move in public, claiming that the vast majority of Indians support it. But behind closed doors, there are signs of unease in the ruling establishment.

With a fifth of the country’s voters going to polls in the days after the budget – elections to five states are being held between February 4 and March 8 – the ruling party felt compelled to shed its image of being uncaring of the poor and allied to the interests of the super-rich.

This year’s Budget was therefore one of exceptional interest and expectations, with some commentators believing it would contain dramatic and high-visibility measures for welfare and developmental equity.
No yield for farmers

However, a careful study of the Budget reveals that it gives away little to India’s long-suffering poor and takes away even less from its super rich. It hopes instead that rhetoric alone will suffice to convince the mass of India’s workers and farmers that their government is committed to their well-being.

Take firstly the claim, repeated for a second year in a row, that this is a farmers’ budget and that it will double their incomes by 2022. The route by which farmers’ incomes will double has of course not been clarified – as in the last budget – neither has the government specified if it is speaking about real income adjusted for inflation.

But the severe reality remains unchanged that although agriculture still employs more than 50% of the country’s workforce, it is allotted a miserly and shocking 2.38% of Union government expenditure.This amounts to just 0.3% of the Gross Domestic Product. Even if we combine allocations to the Ministry of Rural Development and Ministry of Water Resources, this is still as little as 0.98% of the GDP – even below the level of 1.07% of the GDP in Arun Jaitley’s first budget of 2014-’15.

Much was also made by the finance minister of the “record level” of Rs 10 lakh crore in 2017-’18 for farm credit. “For a good crop”, Jaitley declared, “adequate credit should be available to farmers in time”. But as with much else he claimed to do for India’s poor, this announcement was somewhat disingenuous.

Firstly, farm credit is not funded from the budget from tax resources: it is a target set for banks. Second, this target is not much higher than the revised one of Rs 9.5 lakh crore in 2016-’17. And there is no roadmap for bringing in small, marginal and tenant farmers, who constitute more than eight out of 10 farmers, into the formal banking sector. These farmers depend mainly on usurious private money-lending. Interest subvention also bypasses this mass of vulnerable farmers – many of who are women farmers with the growing feminisation of agriculture – as they are unable to access bank loans.

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