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Welfare Must Walk The Talk by AK Shiva Kumar

Social priorities have received scant fiscal attention

There is good reason to feel let down by this year’s budget for the advancement of social sectors. The disappointment is more given that the Union finance minister opened his speech by stating that “we are reaching the end of a remarkable fiscal year” and followed it up by immediate assertions that “growth in 2010-11 has been swift and broad-based”, that “the economy is back to its pre-crisis growth trajectory”. After acknowledging that “there is much that still needs to be done, especially in rural India” and that “the implementation gaps, leakages from public programmes and the quality of our outcomes are a serious challenge”, he assured us that he does “not foresee resources being a major constraint, at least not in the medium term”. From here on, the mystery deepens. What are the social priorities? What is the fiscal strategy? Where are we headed? This year’s budget fails to provide answers to these vital questions.

The fiscal intent of this year’s budget does not match many national, or even governmental, social priorities. Take child under-nutrition, the levels of which continue to be unacceptably high. At the first meeting of the prime minister’s national council on India’s nutrition challenges in November 2010, all agreed that the Integrated Child Development Services require strengthening and restructuring. A decision was taken to prepare a multi-sectoral programme to address maternal and child malnutrition in 200 selected high-burden districts. The budget is silent on how this new pledge will be fulfilled. The increased allocations by a paltry Rs 615 crore, much of which will be absorbed by the well-justified and much-needed doubling in the remuneration of women anganwadi workers and their helpers, is vastly insufficient to fund the ambitious blueprint for strengthening and restructuring ICDS.

Take food security, another national priority. The FM assures us that “we are close to the finalisation of the National Food Security Bill which will be introduced in Parliament” this year. The budget provision for food subsidy for 2011-12—around Rs 60,573 crore—exceeds the revised estimates for last year by just Rs 13 crore. Where will the additional subsidies the new food entitlements may require come from? Related discussions have underscored the importance of improving food storage, plugging leakages, strengthening pds, and improving monitoring and evaluation. The budget provides only Rs 5.10 crore for “evaluation, monitoring and research in foodgrains management and strengthening of public distribution system”.

Take health. It is well known that low public spending on health leads to impoverishment, inadequate public provision, poor reach, unequal access, poor quality and costly healthcare services. With private out-of-pocket spending on health accounting for 78 per cent of total health expenditure (incidentally, it is 61 per cent in China, 54 per cent in Sri Lanka and 36 per cent in Thailand), close to 90 per cent of Indians—not just the poor—have very little financial protection. The additional allocation to health reveals no intent or strategy of providing comprehensive quality primary healthcare and financial protection for all.

Again, take sanitation. Despite the fact that over 50 per cent of Indians defecate in the open, the Total Sanitation Campaign gets an additional allocation, over and above the revised estimate for 2010-11, of only Rs 70 crore. Similarly, the reduced allocations for nrega by Rs 100 crore—down from the revised estimate of Rs 40,100 crore for 2010-11 to Rs 40,000 crore for 2011-12—despite the indexation of wages to inflation is not consistent with the government’s priority to provide employment guarantee for the poor.

The disappointment over the budget proposals this year is particularly high because India can so easily use the acceleration in growth rates to rapidly expand social opportunities for all. A budget should honestly respond to the concerns of the voiceless, not just lobbyists. This one doesn’t. A budget should be visionary and inspirational; this one plainly isn’t.

The author is member, NAC; advisor to UNICEF, India; and visiting professor, ISB, Hyderabad.