Exploding the Claim of Inclusive Development

A Critical Review of the Indian Finance Minister’s Budget (2023-24) Speech

K.B. Saxena

Misdiagnosis of Slow Economic Recovery

This year’s budget presentation was awaited with a great deal of expectations for several reasons. It is the last full budget of the current government before the general elections due next year and the first after the two year pandemic decline, an economic slowdown, impending recession and impact of the Russo-Ukrainian war. A great deal of interest was focused on how the Government proposed to address the debilitating effect of these increasing unemployment, increased poverty levels, loss of income, sharply reduced women’s participation in the labour force, falling educational attainments, crumbling health infrastructure and increasing inequalities. To be sure, the slow growth of the economy was not due to the pandemic, though it was exacerbated by it. It started in 2016-17 with de-monetisation and continued all the way to 2019-20, and then there was Covid-19. As a result, the overall economic growth was 3.7% between 2016-17 and 2021-22, the lowest for any five years in the last four decades, and the per capita income in real terms in 2020-21 was still below 2018-19 levels. (Himanshu, 2023) The decline of growth to 4.3% in the second half of FY 2022-23 from 7% in the first advance estimates, with industrial growth slipping to just 4.3% and high inflation, extended this trend. (EPW, 2023) The structural reason for the slowdown continues to be reduced demand both for consumption and investment. (Himanshu, 2023)The lack of investment is largely linked to sluggish growth in consumption, especially in rural areas where real wages have stagnated and purchasing power has shrunk due to lack of income-earning opportunities. This is corroborated by sustained demand for MGNREGS. Contrary to expectations, the impact of the new personal income tax regime on consumption has not materialised. Per capita private consumption expenditure has gone up to just 5.9% over the last three years. (EPW, 2023) Even the meagre recovery in the post-pandemic period is investment led rather than consumption-led. Investment in the absence of demand would only increase inventory, unused productive capacity, unused infrastructure and unrecoverable loans. The government assumes that slow growth is due to lack of sufficient investment and has taken supply-side measures to give incentive to it by tax concessions, other performance-linked incentives, easy credit and lower interest rates. This resulted in the concentration of profits in large firms with a rising share of capital and falling share of labour in the national economy. 433 firms out of 4 lakh that filed tax returns reported profits in excess of Rs. 500 cr. In 2020-21, 517 companies accounted for 62.08% of total profits of the corporate sector and 2075 firms cornered 77.41% of the profits. This would have continued thereafter. The effective tax rate of these 517 companies was only around 19.14% which is much lower than that of small-sized companies. This implies that lower tax rates are not a strong factor for fresh private-sector investment in the manufacturing sector. (Baxi, 2023) In fact, larger public sector companies (Central as well as State) had a bigger share of overall investment, closer to 30%. Yet a broad-based recovery in private-sector investment did not materialise. Therefore, the expectation that public capital expenditure would draw in private investment has been belied. In fact, the Gross Fixed Capital formation (GFCT) to GDP in all years of NDA government has been lower than the ratio of 32.6 in 2013-14. (Issac, 2023)

In these circumstances, the Budget should have targeted the slump in rural demand to create sufficient purchasing power so as to boost private consumption and stimulate growth. For this, an increase in social sector expenditure was necessary. (Patnaik, 2023) But the Budget has precisely done the opposite by shrinking public spending. Aggregate public spending has fallen from 17.7% of the GDP in 2020-21 to 14.9% in Budget estimates (BE) for 2023-24. This has been done by reducing revenue spending, which is recurring expenditure, by 4 percentage points in the last three budgets. This has been exacerbated by reduced exports and imports by 8.8% and 8.2% respectively, deepening the contraction in the economy (IE (ed), 2023). Reduced public expenditure has a strong negative effect on the States and low-income groups. This is evident from lower public expenditures by States due to reduced transfer of resources from the centre to the states, which have gone down by 1% of the GDP over the last three budgets.

Cut Down in Schemes Benefitting the Poor

The sizes of the Central sector and centrally-sponsored schemes have also been shrunk as have the Finance Commission grants to the States. The reduced spending in the union budget in respect of subsidies has come down from 3.6% of GDP in 2020 to 1.3% of GDP in BE of 2023-

24. (EPW, 2023) These subsidy cuts are 31% in food, 22% in fertiliser, and 75% in LPG (Liquefied Petroleum gas). In addition, interest subsidies through 15 other schemes have been reduced cumulatively by almost Rs. 1000 cr. Similarly, cumulative allocation for 14 other government-subsidy schemes has been reduced to Rs. 812 cr from Rs. 2958 in the revised estimates of 2022-23.(Bhagirath, Himanshu and Shagun, 2023).Every programme which directly benefits the poor has been given less money than the last year, and where adjusted for inflation it will be even less. This distress is compounded by the lack of any reduction in GST and in the price of petrol, diesel or LPG. (Chidambaram, Feb19, 2023) This combined with persisting inflation and unemployment (urban 8.1%, rural 7.6%) has made the situation worse. This is further exacerbated by many big companies laying off employees, affecting the middle classes too. The most cruel cut in allocation is in respect of MGNREGS, to Rs. 60,000 cr from Rs. 1,89,400cr in 2022-23. In a slow-growing economy with few income-earning opportunities for unskilled workers and high levels of unemployment, MGNREGS serves as a life line for millions of rural poor. Besides, in an economy where lack of consumption demand slows it down and constrains investment, MGNREGS is the most effective and productive way of augmenting purchasing power of the rural poor and boosting demand. It is also a very robust method of empowering poor rural women, whose participation reached 51% during the last financial year. This is because women find it easy to access work due to its availability within a reasonable distance from home; they are safe from any harassment and exploitation and can be adjusted with household chores and responsibilities. But the Government is virtually killing the scheme (ENS, 2023) through reduced allocation, low wage rates, (lower than both the market wage and minimum wage fixed by the State governments), etc. Still worse is creating obstacles in provision of work by mandatory marking of attendance by workers through the National Mobile system App in effect from January 1, 2023. Workers are also required to get two time-stamped and geo-tagged photographs uploaded on the scheme’s portal. Further, the use of Aadhar Based Payment System (ABPS) has been made obligatoryfor depositing wages of workers. Given that many rural poor may not be in a position to meet this requirement, this move is intended to reduce demand by denial of work on various grounds, which includes mismatch in the spelling of their name on the job card and their Aadhar Card. By June 23 of this year, the names of 61 lakh registered workers had been deleted for such reasons. In the financial year 2022-23 there was a 244.3% rise in the number of deleted workers. From 1.49 cr deletions in 2021-22 it climbed to 5.13 cr in 2022-23. (Nair, 2023) This is reflected in fewer person days of employment generated since January than in pre-Covid levels and the number of households (1.67 cr) availing of the scheme in February, 2023 compared to 2.02 cr in February 2022, 2.28 cr in February 2021 and 1.87 cr in February, 2020 (Sharma, 2023). As a result, only 34 days of work is being provided against the mandated 100 days. The Government is interpreting this reduced number as an indicator that the growth of the economy is providing better employment options and, therefore, pandemic-induced stress is over and a reason for lower allocation. The Government has also killed the ethos of the scheme by virtually making it an infrastructure programme, mandatorily converging it with other programmes and centralising the release of ‘wages payment order’. As it is, the annual allocation for MGNREGS over the years have been inadequate, which leads to pending wage dues and material cost being cleared from next year’s allocation. The extent of this deficit during 2022-23 may be 25,800 cr. This would leave only Rs. 35,000 cr for the whole of 2023-24, leading to even fewer days of employment generated. (Bhagirathi et al 2023) Even the Parliamentary Standing Committee has expressed concern about reduced allocation. (Sharma, March 16, 2023)

Capital Expenditure Does Not Create Employment

The squeeze in allocations for subsidy schemes for the rural poor serves two objectives of the aggressive neo-liberal thrust of the Government. One is fiscal consolidation by bringing the fiscal deficit down from 6.4% to 5.9% and the second is to increase capital expenditure from Rs. 7.5 lakh cores to Rs 10 lakh cores. The latter is touted as the recipe for addressing the scourge of the high rate of unemployment that has plagued the economy. A great deal of hype has been created about the potential of capital expenditure for both growth and employment. Both assumptions have little evidentiary base to support them. The big-ticket infrastructure like roads, high ways, bridges, ports, airports are capital intensive and do not create much employment after the construction period, not for the segment of the population (unskilled labour) which needs it most. The emphasis on renewable energy, solar farms and wind farms would yield very few jobs. (Aiyer, 2023) In addition, capital expenditure projects also have a long gestation period to achieve their growth potential and employment creation. They do not provide any relief to the poor who need work to earn income right now to survive. Besides, demand constraint would inhibit initiative to use infrastructure for investment in growth activities. The same amount spent on social sectors would have directly benefitted the working people immediately. (Patnaik, 2023) Multiplier effects of social sector spending directly or indirectly increases the purchasing power of the working people much greater than capital expenditure. The much-publicized big push for rural housing by 17.2% compared to 2022-23 (BE) would also not help as the wage employment of the scheme is only 25%. The rest is the material cost.(Sharma, 2023) Further, much of the capital expenditure is incurred on import of capital goods for which the budget has lowered custom duties. How can such a capital expenditure create employment to any significant extent? (Patnaik, 2023) Fiscal prudence has also led to the withdrawal of PMGKY (Prime Minister’s Garib Kalyan Yojna)as the Government feels that the recovering economy needs no further affirmative action. This assumption has floundered in the wake of weak and shallow recovery and global headwinds, which may lead to a recession in global economy according to the IMF.

The Economic Survey has noted that 16.4% of the population is multi-dimensionally poor and an additional 18.7% is classified as vulnerable to multi-dimensional poverty. These poor needed to be taken out of this poverty trap by expanded welfare spending.(Suresh Babu, 2023) But the Budget has not only struck at the poor, it has taken no notice of increased inequ lity which the pattern of growth has generated (as per Oxfam Report) with 5% in India owning 60% of the country’s total wealth while the bottom 50% owns just 3% of wealth and gets only 13% of national income(cited Chidambaram, Feb. 19, 2023). The budget deepens it by anti-poor resource flow. It has not included any serious revenue-raising measure while it has lowered the resource allocation for poverty alleviation schemes. It has not even spared the agriculture sector that supports the bulk of the rural poor. Besides cutting food subsidies by Rs. 90,000 cr, fertiliser subsidies by Rs. 50,000 cr and terminating the PMSKY free food grains scheme, the PM-Kisan allocations have been reduced by 11.26%, Rashtriya KrishiVikasYojana by 31%, KrishiSinchaiYojana by 17% and Krishi UnnatiYojana by 2% from last year revised estimates. (Sharma, February 1, 2023) This falls in the face of the claim in the Finance Minister’s Budget speech of inclusive development of agriculture.

Loud Claim of Inclusive Agriculture

The Inclusive Development for agriculture has been visualised in the Budget speech as 1) Digital Public infrastructure for funding farmer-centric solutions; 2) setting up of an Agriculture Accelerator Fund to encourage start-ups by young entrepreneurs in rural areas; 3) enhancing productivity of cotton crop through public-private partnerships; 4) Clean Plant Programme to boost availability of disease-free, quality planting material for horticulture crops; 5) Indian Institute of Millet Research to be supported for sharing best practices with other countries; 6) increase in Agriculture Credit target to 20 lakh crores with focus on livestock and fisheries sector; 7) a new sub-scheme to enable fishermen, fish vendors & macro-small enterprises to expend their market. Only two of the above seven announcements (4 and 7) have specified some financial investment. In any case, these announcements do not touch upon the core issues which have agitated the farmers unviability of agriculture with high input costs and low market realisation, chronic indebtedness, crop loss due to natural calamities, access to cheap credit so as to avoid chromic indebtedness. The decline in allocation of some crucial schemes is reportedly due to under-utilisation of the allocated amount in the preceding year. The most important reason for this is that most centrally-sponsored schemes now require 40% contribution from States (as against 100% contribution by Union government before 2015-16). The poorer states are unable to provide this share. Other reasons include delays in the release of funds, inefficiencies in implementation, etc. This is due to staff shortages, excessive workloads, low unit costs and limited capacity of agriculture staff at the district, block and village levels. But some schemes suffer from design and operational flaws such as PMFBM (Prime Minister’s Fasal Bima Yojana – crop insurance scheme), which include low claims to premium ratio, inadequate grievance redressal mechanisms, steep rise in premium rates etc. Seven states have opted out of it. The scheme is also gender insensitive as only 13.7% of total beneficiaries are women. (CBGA, 2023) Besides lacking in a vision for agricultural growth (Kumar, 2023) there is nothing in these sectoral interventions for marginalised sections, landless, tenants, small and marginal farmers and agricultural workers. An inclusive policy & budgetary paradigm for marginalised sections of farmers needs to put emphasis on alternative agriculture practices that promote dry land farming, crop diversification and use of non-chemical methods and budgetary direction to ensure an adequate provisioning of resources. A redesign of state budgets is necessary to complement it. The outcome and outputs of existing schemes do not cover vulnerable and marginalised sections, including women. (CBGA, 2023)

De-prioritization of Nutritional Support

The de-prioritisation of social sectors and lowering its allocation to make for fiscal consolidation is not confined to rural development and agriculture. It extends to nutritional support for women and children. India has slipped from rank 101 to 107 out of 123 countries in the Global Hunger Index and there is widespread prevalence of anaemia in 57% of women along with 36% of child stunting and 19% of child wasting. (Chidambaram, Feb. 26, 2023) But the allocation for Saksham Anganwadi, the umbrella scheme for erstwhile nutrition schemes remains almost unchanged. There is no enhancement of remuneration for Anganwadis workers, helpers, Asha workers, who provide child-nutrition services. The allocation for school meals programme (PM-POSHAN) has been lowered compared to 2022-23. Samarthya scheme which provides for maternity benefit and other women empowerment facilities has also been reduced. The allocations for old age, widow and disabled pensions have remained stagnant (Sinha, Dipa, 2023).

Bias against Minorities

The very first paragraph of the Budget speech envisions inclusive development to reach all citizens and regions, especially youth, women, and farmers besides SCs/STs/OBCs. There is a conspicuous omission of minorities in this formulation, which is indicative of the ruling party’s deeply entrenched bias against Muslims and Christians. This is not an unintended omission but is reinforced by subsequent budget provisions for them, the most glaring of which is the reduction in the budget provision for the Ministry for Minorities by an unprecedented 38% and discontinuance of pre-matric scholarship for class I-VIII and also Maulana Azad scholarships for higher education.

Economic Empowerment of Women

The Budget speech in Para 13 also talks of economic empowerment of women by the next stage development of 81 lakh Self Help Groups (SHGs) through formation of large producer enterprises or collectives to be helped with supply of raw material, better design, quality and branding and marketing of their products for up-scaling of their operation to serve the large consumer markets as with the start-ups growing into firms. The Government by taking the route of entrepreneurship and self-employment is shirking its duty to create appropriate labour-intensive wage employment consistent with the social limitations of women. The Periodic Labour Force Participation Survey indicates that labour force participation rates for women improved from 18% to 25%. But this increase is in unpaid home employment and low wage agriculture. What women need is wage employment which adjusts with their social obligation of domestic work. The easiest and most effective way to provide it is to increase MGNREGA employment with enhanced wage rates along with the National Livelihood Mission Programme to increase their employability through appropriate skill development and placement. Both these programmes have been short-changed. Women’s self-help groups are engaged in a low level of economic activities for catering to the local market, which cannot even assure sufficient income to alleviate the poverty of their members even with support provided to them. It is too ambitious to envisage their up scaling to produce for the global market. It is the surest way of courting failure. The crumbling start-ups is hardly the model to emulate.

Old Recipe for Traditional Artisans

For traditional artisans and crafts people (Vishwakarmas), the Finance Minister announced a scheme to enable them to improve the quality, scale, reach of their products, integrating them with MSME value chain with skill training, green technologies, linkage with global markets, digital payments and social security to benefit marginalised groups. These objectives have been pursued for a long time with little impact on the condition of crafts people, except for a minuscule number. The crafts people are faced with a lack of demand, non-availability of raw materials, absence of market linkages and cheaper machine-made products flooding the market. The demand for hand-crafted products is largely confined to the middle class and affluent sections. The demand base has to be expanded to create a market within the country before other steps announced above succeed in improving the economic condition of the groups.

Dismantling of Affirmative Action

Para 14 of the Budget speech lists seven priorities which would guide the activities of the Government. On the top is inclusive Development; Para 15 loudly claims that the philosophy of ‘Sabka Saath, Sabka Vikas’(participation of all and development of all) has facilitated it. This claim fails the test of scrutiny with the level of poverty, unemployment, food insecurity and malnutrition along with increasing inequality and continuing discrimination against marginalised sections. The Affirmative Action in favour of SCs/STs pursued since independence is being dismantled gradually. With economic reforms pursued since 1990, employment in government establishments and public sector undertakings has shrunk. This has been effected through various ways, such as vacancies not filled, existing posts being combined to reduce the number of employees, some posts being abolished, existing vacancies getting filled up on ad hoc basis through contract appointments where no reservation applies. The total number of employees in the government has been reduced from 32.6 lakh pre-reform to 26.30 lakh post-reform. The new public sector policy envisages not more than 4 public sector undertakings; the rest would be privatised. In addition, reservation in government jobs is being reduced in various ways. The lateral entry into central government positions is one mechanism where no reservation applies. The judiciary has also struck against reservation. The Allahabad High Court order shifted the provision of reservation from university to a department level. This has drastically reduced the number of posts for Dalits and Adivasis because in small departments with few posts it becomes difficult to divide posts into reserved and unreserved category. As a result, in 11 Central Universities, only 2.5 vacancies were reserved for SC/STs and 8 for OBCs. The Government decided not to contest the case in the Supreme Court, which indicates its apathy if not hostility to reservation. The Government has also struck against a conceptual basis of reservation by earmarking 10% of posts exclusively for poor from non-backward categories (read upper castes). The Supreme Court declared that reservation in promotion to higher posts was not a fundamental right. The dismantling of affirmative action is not confined to reservation. Even access to education is targeted by reduction in allocation for post matric scholarships by failing to adhere to need-based allocation. The structural change in Sub-Plan concept which assured that a specified percentage of resources flow to these groups is yet another dimension of this trend. The restructured model does not ensure that money allocated for ‘welfare’ of SCs/STs is directly spent on SCs/STs. The accrual of benefits to SCs/STs from this fund is only notional as the physical reach of the benefit from it to the SCs/STs is not monitored.

Discrimination and Violence Against Marginalised Groups

The continued discrimination against SC/ST candidates in the labour market, as noted by Oxfam in its India Discrimination Report 2022, is notably high and has gone up marginally as their level of education and other measurable endowments have improved over time. Caste discrimination is still ‘highly significant’. Gender based discrimination is found to be extremely high in all categories of employment, rural and urban. The increase in unemployment in cases of urban areas is alarming for all socio-religious groups. Casual employment suffered the most. This led to increase in self-employment, particularly among SCs/STs. In access to agricultural credit, the average amount of credit received by SCs/STs is about half of what the forward community receives. Discrimination exists in both commercial and cooperative banks, but is higher in commercial banks. (Oxfam, 2022)

Violence against marginalised groups shows an increasing trend, despite the strengthening of criminal laws concerning their protection against it. The registered cases under the Prevention of Atrocities Act for SCs increased from 42,793 in 2018 to 50,291 in 2020 and for STs from 6528 to 8278 but with a conviction rate of only 26.86%. Despite this dismal performance, the allocation for the scheme relating to implementation of the Act has been reduced by 12%. Crimes against children increased from 1,28,531 registered cases in 2020 to 149,404 cases in 2021 (from 28.9% to 33.6%), but the conviction rate is a very low figure of 14%. Crime against women increased phenomenally from 3,38,954 registered cases in 2016 to 4,28,278 cases in 2021. Rape cases increased from 39068 cases in 2016, reduced to 28153 in 2021, but rose to 31878 cases in 2021 (a rise of 18%). The conviction rate is around 26%. The criminal laws in respect of all these four groups have been strengthened but show no impact on improving conviction rate or lowering the incidence of crime, as they are confronted with formidable obstacles – shoddy/biased investigation, ineffective presentation in the court, threat to and intimidation of victims by the accused persons, poverty and lack of resources to pursue the case, absence of social support. Yet the scheme of Ministry of Women and Child Development which provides support services / emergency help to women in distress / victims of violence called Sambal has seen no enhancement in the budget provision from the previous year’s. Similarly, the scheme for protection of children called Mission Vatsalya also provides no increase in the budget provision compared to the preceding year’s BE. Both schemes also suffered from under-utilisation of the last year’s allocation, indicating bottlenecks in implementation not sorted out. The National Child Labour Project which engaged in rehabilitation of child-bonded labour rescued from employers in fact has suffered a 2/3 cut in allocation despite full utilisation of last year’s allocation. Mission Shakti for Protection and empowerment of women has also faced a cut of Rs. 40.15 cr due to under-utilisation of last year’s allocation. All ministries dealing with marginalised sections except the Ministry of Tribal Affairs have received less than a 5% increase in their allocation: Women and Child Development – 2.2%, Social Justice and Empowerment 4.3%, Persons with Disability 1.01% which, when adjusted against inflation, would be a decline in allocation. The 26.7% increase in allocation of Ministry of Tribal Affairs is on account of recruitment of teachers and staffs in Eklavya Schools in identified blocks in tribal areas announced some time ago to operationalize them and does not enhance coverage of existing schemes. So palpable is the hostility of the present Government towards Muslims that the Ministry for Minorities has received the highest cut of 38% in its allocation, along with scrapping of two scholarship schemes – Pre-matric Scholarship for Minorities and Maulana Azad Education Foundation, despite the robust demand. Even the remaining schemes have witnessed a sharp reduction in allocation. The Ministry dealing with Persons with Disabilities has fared no better than Ministries dealing with other marginalised groups. The scheme, which has a large demand (disability pension), has received no increase in allocation despite 100% utilisation of last year’s budget. The scheme for implementation of the revised disability law has received a cut of nearly 60% in allocation. Of the remaining three schemes, two have received less than 5% increase; only the scheme on scholarship has had its allocation increased by Rs. 50 cr., but when viewed against RE of last year, only 10 cr. Can this evidence support the claim of inclusive development?

Mechanical De-Sludging of Septic Tanks and Sewers

Para 56 of the Budget speech has made a welcome announcement that de-sludging of septic tanks and sewers would be done mechanically. This would hopefully prevent deaths due to manual cleaning by scavengers, though the scheme is silent on rehabilitation of manual scavengers resulting from the scheme and payment of compensation to those who have lost lives (around 1005)in the process of manual cleaning. Not all of them have been paid the compensation mandated by the Supreme Court. But the manual scavenging, far from being eliminated, is likely to increase. The scheme announced in the budget does not cover rural areas where underground tanks of toilets are not cleared by landowners and the task is handled by manual scavengers. This issue has not received any attention. While the scheme in the budget has a positive side that it may avoid fatalities in sanitation work due to no contact with human faecal matter and only skilled workers would perform this task, the fundamental flaw in the scheme is that it treats the issue of sewage cleaning as a technological issue rather than a social one. The scheme will not alter the stigma associated with task of cleaning waste. Besides, the scheme does not talk about providing decent alternative jobs to sanitation workers and prioritisation of the rehabilitation to all such sanitation workers, who are likely to be rendered unemployed on account of mechanisation of sewer and septic tank cleaning and removal of caste-related stigma associated with sanitation labour. (EPW, 2023) It is necessary to delink dehumanizing labour from this obnoxious form of work as such (Guru, 2023). But the track record of the Government on rehabilitation of manual scavengers liberated from the obnoxious practice is hardly reassuring, as there is a huge backlog of those freed from manual scavenging but not rehabilitated due to a sharp gap between their number identified officially and those who have been identified by non-government surveys. The Government claims that all officially identified manual scavengers have been rehabilitated. This issue has not been sorted out and for the last two years no money has been spent on the scheme. As a result, non-rehabilitated manual scavengers, as per non-official agencies, have become invisible. This issue needs to be resolved without delay. Social audit of the scheme is also necessary to investigate whether those claimed to have been rehabilitated have taken to alternative occupations or they or another member of their family have gone back to manual scavenging?

Undermining Right-Based Entitlements

The most potent evidence against the claim of inclusive development is the systematic undermining of right-based entitlements won after a lot of struggle. The case of MGNREGA has been cited above to show how the entitlement is being curbed and diluted to suppress demand and its basic character of work on demand locally is being changed. The Forest Rights Act has been subverted by diluting its provisions, exempting their application in certain projects with a view to speedy acquisition of land, large scale rejection of claims recommended by Forest Rights Committee, only a miniscule area being allowed of the claim submitted, restrictions on the use of land where claims are accepted, diversion of forest for non-forest purposes without prior consultation with Gram Sabha etc. The Food Security Act is being undermined by not updating the entitled population for getting benefits provided by the Act, Antodya Ann Yojana cards cancelled due to deaths of migrants are not being replaced with cards for new beneficiaries. As a result of withdrawal of free 5 kg additional grain per month under PM Garib KalyanYojana, the entitled households would now have to purchase additional requirement of food grains at market prices bearing the inflationary pressure. ICDS has not been universalised despite Supreme Court direction. The maternity benefit under NFSA (National Food Security Act) has been reduced to Rs. 5000 and its eligibility has been restricted to only the birth of the first living child. The Right to Education Act has been side-lined by superimposing the New Education Policy and starving the school education of the needed resources to implement the commitment of providing elementary education contained in the Act. Only 10% of public schools comply with the norms of school infrastructure laid down in the Act. A number of government schools have been closed down in several States, which would lead to an increase in drop outs. There is lack of any initiative and resources allocation for early childhood education, despite its emphasis in New Educational Policy, and no efforts for expansion of secondary education despite the increasing gap between elementary and secondary education.

Mission on Particularly Vulnerable Tribes

In para 57 of the Budget Speech, a new scheme has been announced, namely, Prime Minister Particularly Vulnerable Tribal Groups(PVTG) Development Mission, to provide their families and habitation with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities for which Rs. 15000 cr would be made available over the next three years. But the allocation for the development of PVTGs in the allocation of Ministry of Tribal Affairs has increased only marginally over the preceding year. The importance given to PVTGs (75 in number) is welcome as the condition of many them is precarious, having been displaced from their forest habitat and dependence on its resources for their sustenance. They are all pre-agricultural tribes – food gatherers and hunters – and are not used to sedentary life that is characteristic of tribes engaged in settled agriculture. Their traditional occupations have been lost with no alternative appropriate livelihood provided. They are under extreme stress to survive and suffer from acute food shortage and malnutrition as a result of which their life span has been shortened. They have also been victims of exploitation by surrounding communities. It is extremely challenging to design community rehabilitation and sustainable development schemes suited to their skill base and physical capacity. Many projects for their upliftment attempted in the past have failed to improve their condition. Trained and experienced anthropologists would need to be associated with any scheme / schemes that may be designed for them and implemented. Such a scheme/ schemes would require handholding by such trained and empathetic anthropologists over a long period of time.

Eklavya Residential Schools

Para 38 of the Budget Speech informs that the Central Government will recruit 38,800 teachers and support staff for 740 Eklavya Residential Schools serving 3.5 lakh tribal students. The establishment of Eklavya Residential schools was announced in 1978-98 and 640 schools were sanctioned by July 2021, of which 367 are functional. The Standing Committee report raised concerns about delay in operationalization of schools due to routine issues delay in tendering process, land transfer and selection of construction agency as a result of which their completion date has been extended to 2025. What is important in this connection is that residential tribal schools in most places are badly managed, suffer from poor infrastructure and teaching and worse, from the attitudinal bias of the teachers who manage them. Language and culture divide the teachers and students, which affects the quality of teaching and relations between them. There is no attempt to associate parents with management of schools to bridge the divide besides conscientization and training of teachers. Hopefully, these issues would be taken care of in Eklavya Schools. It should be ensured that teachers & staff are overwhelmingly recruited from the local tribal communities as far as feasible to eliminate the attitudinal bias and empathetically handling of students.

Mission to Eliminate Sickle Cell Anaemia

Another budget announcement (Para 28 of the speech) which has relevance for tribals is to set up a mission to eliminate sickle cell anaemia by 2047. This Mission will entail awareness creation, universal screening of 7 crore people in the age-group of 0-40 years in affected tribal areas. The disease is particularly widespread among the tribal population where about 1 in 86 births is affected. While the announcement is welcome, there is no earmarked resource allocation for it. The implementation of the programme would require community health workers along with NGOs working in the field supporting the programme and local PHC level facilities to be strengthened.

The Poor Languishing in Jail

Yet another item relevant to the poor and marginalised section mentioned in the Budget speech is about the number of persons who are granted bail or eligible for it in criminal cases but who continue to be in prison as they are unable to afford the penalty of bail amount. The Budget speech (Para 42) provides the assurance that the required financial support will be provided. As per information based on Crime Records Bureau, 66% of the prisoners under trial are from marginalised sections – SCs / STs/Muslims. Forty-eight percent of them have been in prison for over 5 years without charge sheet being filed or trial begun. Delhi and J&K top the list.(Roy, 2022) Quite a few of them are accused in petty offences. But they are too poor to afford a lawyer to seek bail or afford the bail amount when released on bail. The most humane solution to the problem is to release them on the assurance of the local panchayat / community organisation rather than making financial provision for the bail amount. Among the prisoners are also those who have been in jail without any trial for a period equivalent to or more than period of imprisonment prescribed in law for the crime they are accused of committing if convicted. Such persons should be released straight away. The screening should be done at the District / High Court level depending upon the nature of the crime for which they have been incarcerated.

Continued Neglect of School Education

‘Inclusive Development’, ‘reaching the last mile’ and ‘unleashing the potential of youth power’ are listed among the seven top priorities that would guide the 2023-24 budget. This requires meaningful planning and investment in education and social sector development. But the overall share of education in the total union budget has declined in comparison to pre-covid years (CBGA, 2023) though the Department of School Education and Department of Higher Education have been given a marginal increase of 8% from BE of last year but lags far behind the demand for six per cent of GDP as total public spending by both the Centre and the States. (Ray, 2023) States fare far better with 2.7% of GSDP allocated to education compared to 0.37% of GDP allocated by the Central government. Besides, discriminatory allocation of resources to elite schools – Kendriya Vidyalya, Eklavya model schools, Navodya Vidyalyas, and now the newly announced model PM Shri Schools for Rising India (exemplar schools) with Rs. 18,000 cr for its implementation strikes at the root of inclusion. Around 26% of the school education budget has been allocated to these model schools, while they cater to only 20 lakh students. (CBGA, 2023) Likewise, in the field of higher education, a larger share of the budget has been allocated to 20 Indian institutes of technology while the numerous other institutions of higher learning are starved of funds even for routine management. This elitist bias in educational structure ensures that the bulk of the schools and colleges where the poor and the marginalised study would be condemned to function at below optimal level in terms of lack of human and financial resources and infrastructure to create an inclusive learning environment (CBGA, 2023). The National Achievement Survey, 2021 and Annual Status of Education Report (Rural) show that there is a progressive decline in learning outcomes of students across all grades in almost all subjects. ASER report 2022 points to sharp drop in reading ability. Improvement in this situation will depend upon students’ access to and participation in quality of learning imparted by schools. To achieve the goal of NEP, universal access to quality education from pre-primary to higher secondary by 2030, a programme called National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN) Bharat was launched in 2021 under Samagra Shiksha Abhiyanwith a target that every child should attain Foundational Literacy and Numeracy of Grade 3 by 2026-27. To attain this objective, adequate investment for setting up basic infrastructure, recruitment and training of professionally qualified teachers and monitoring of implementation is required. (CBGA, 2023) Between 2019-20 and 2021-22 the number of schools declined by 20,000 and number of pre-primary level schools declined by 7000. In 15 states, there is a vacancy of 5.6 lakh teachers at the elementary level. The Budget envisions improved training of teachers, innovative pedagogy, curriculum transaction, continuous professional development, ICT and revamping of District Institutes of Education and Training (CBGA, 2013). This commitment is nowhere seen in the budget allocation as SMSA (Samagra Shiksha Abhiyan), which covers 11.6 lakh schools, 15.6 crore students and 57 lakh teachers from pre-primary to senior secondary level. While Ministry of Education has suffered from underfunding of SMSA from its inception, ironically, what is allocated is not being fully utilised by the States. One bottleneck is delayed release of fund from the Centre. The under-allocation and under-utilisation make the targeted goal unachievable. The Government’s recent announcement of outcome-based financing in select schemes if applied to SMSA would have a further negative impact on implementation. (CBGA, 2023) The solution requires both the centre and States to sit together and sort out the bottlenecks.

Discontinuation of Scholarships

Given the huge class and caste divide in access to education, scholarships are a progressive intervention to facilitate inclusive education. But the Government on the other hand has discontinued the pre-matric scholarships for students of class i-viii belonging to SCs/STs, minorities and others. This has been justified on the ground that the Right to Education Act, 2009, mandates free and compulsory elementary education to all children in the 6-14 age groups. What is ignored is that even free education involves some expenditure which poor households may not be able to meet, given the uncertainly of employment and low level of wages. As per the National Sample Survey, 2017-18, average out-of-pocket expenditure for primary education in government institutions was Rs. 1253 per child per annum and for upper primary level, it was Rs. 2181. The decision of the Government is likely to lead to drop out of such children and their joining the labour market. Even in respect of post matric scholarships for SCs/STs, the allocations during the past 3-4 years have been very low though improved since last year. The low allocation during this period would have resulted in disruption of the education of those who were receiving it and affecting their prospects of employability. Besides inadequate and irregular funding, scholarship schemes face numerous bottlenecks in delivery ranging from complicated application procedures, inadequate unit cost, failure to revise eligibility criteria and unit cost to factor in inflation, delay in central release of funds and late submission of utilisation certificates from States. Though demand driven, the number of students receiving the scholarship are lower than those applying for them. Thus, even this component of Affirmative Action is being undermined.

Relentless Push of Technology: Digital Divide

The most striking assault on inclusive development is the Government’s relentless and aggressive pushing of digitisation in all crucial sectors. In a society which is characterised by a huge divide in terms of educational attainment and knowledge acquisition based on caste, ethnicity, religion and gender, this would intensify the exclusion of the poor and the marginalised. The huge inequalities of infrastructure in schools exacerbate this divide. Only 60% schools in India have functional electricity connection varying from 25% in Manipur to 100% in Delhi, Punjab, Tamil Nadu computer facilities is available only in 47% of schools and internet connectivity in 33.9% of them. On the digitisation front, the percentage of government schools with functional desktops is only 16.5% with a wide variation of 100% in Delhi to 6% in MP. Only 1.2% government schools have digital libraries while 5.1% private unaided schools have them. The percentage of government schools with functional ICT labs stand at 14%. Only 40.13% teachers across public /private managements are trained in teaching through computer. (CBGA, 2023)

To bridge this divide, flagship schemes like Bharat Net, Telecom Development Plan and Aspirational District scheme have been introduced. As a result, internet subscribers in rural areas have increased to 95.76 million but nearly 24% of them have no access to digital devices. Action to set up a virtual university has been initiated along with various interventions to address the digital divide. But the overall allocation to the Digital India Learning Programme has not witnessed any increase in the budget but a decline of 0.23% compared to the last year’s BE. This year’s budget speech adds another component of digital infrastructure i.e., to set up a National Digital Library for children and adolescents to facilitate availability of books across geographies, languages and levels and device agnostic accessibility but with no budget head or financial allocation. The Budget speech has transferred the responsibility for setting up physical libraries at the Panchayat and ward level and provide infrastructure to access National Digital Library resources to the States but with no resource support provided to them. As a result, the scheme is unlikely to get operationalized, particularly in States with a low resources base. But in a country where there is no public library system and the majority of Indians left out of reading for generations, the need and priority is for setting up, revving and modernising public libraries and a movement for a free library movement. The indifference to this need is evident from the fact that a draft National Library Policy 1986 has still not been finalised for action. (Rao, 2023) The relentless push of sophisticated technology across domains will act as yet another instrument (more potent than caste religion, ethnicity and gender) of exclusion.

Youth Power

Youth in the age group of 16-40 constitute the most significant section of the labour force which is most frustrated due to lack of decent employment opportunities. This is reflected in hordes of them applying for miniscule lower level jobs in the government. Job creation is a priority to address this issue. The Budget speech addresses this requirement by launching a scheme for skill development with on-the-job training, industry partnership and aligning training courses with it and inclusion of new age courses such as coding, artificial Intelligence, robotics, mechatronics, IOT, 3D Printing, drones and soft skills. This will be operationalized with stipend support to 47 lakh youth under National Apprenticeship Promotion Scheme and a Unified Skill India Digital Platform for linking with employers and facilitating access to entrepreneurship schemes and enabling demand-based formal skilling. The Government has been implementing skill development and apprenticeship schemes for many years. The announcement in the budget is a significant scaling of this scheme. However, there has been enrolment of merely 21.7% lakh persons between FY 2017 and 2023 (Ray, 2023) and in terms of absorption of such youth in formal jobs, there is not much to show. The implementation of existing scheme suffers from delays in fund disbursement, mismatch between the number of people trained in a particular vocation and the potential of their absorption into the labour market, (CBGA, 2023) poor placement rate, low quality jobs, temporary placements and lack of gender focus. A comprehensive social audit is necessary about the effectiveness of the scheme, design of the courses, competence of training institutions, quality of training imparted and linkages with industry. The new announcement therefore, is unlikely to create any hope among the youth about a meaningful intervention to facilitate their employment, more so in a slowing economy with companies reluctant to hire.

Strengthening Health Services

The Budget speech made four announcements in the health sector: 1) setting up of 157 new nursing colleges adjacent to 157 medical colleges established since 2014, 2) facilities in ICMR laboratories to be made available for research for faculty of medical Colleges and private sector R&D schemes, 3) a new programme to promote research and innovation in pharmaceuticals, 4) multi-disciplinary courses for medical devices will be supported in existing institutions. While no details and financial provisions for these programmes are indicated, the initiatives do not touch upon the core problems faced by the common persons / the poor in accessing public health services.

The pandemic glaringly exposed the shortcomings of the public health system. The crumbling infrastructure, shortage of human resources, overcrowding, low resource allocation are among its major problems. The budget allocation for 2023-24 (BE) for health is a mere increase of 4% over BE of 2022-23 and a large part of this increase is for the Ayush segment. National Health Policy (2017) and the 15th Finance Commission recommended that public expenditure on health (Centre and State combined) should reach 2.5% of GDP by 2025. But the allocation for health as a percentage of union budgets has remained stagnant at around 2% during the last few years (CBGA, 2023). This year’s allocation is even less than the actual allocation during 2019-20. The allocation by States for health was higher than that of the Union Government. In 2022-23, the union health budget as a percentage of GDP was 0.3% but the state budget was 10.1% of SGDP in 2022-23 (BE). The combined allocation of Centre and States was 2.1%. (Economic Survey, 2022-23). Within the schematic structure of Ministry of Health, National Health Mission, the flagship programme has witnessed a decline from 41.6% in 2022-23 (BE) to 39.7% in 2023-24 (BE). The scheme also suffered from differences in the amount approved, released and spent, which indicated that there were bottlenecks in the utilisation of allocation which were not sorted out. The budget also reduced allocation for Ayushman Bharat, the flagship state health insurance scheme with a sharp cut of 34% and for NHM by 1% from last year’s estimates.

But more than the resource allocation, the persistent problem faced by Public Health System is shortage of human resources at various levels – 25% in ANMs, 74.1% in Health Assistants, 31.5% in allopathic doctors at the PHC (Primary Health Centres) level, 79.3% specialists at CHC (Community Health Centres) level. In urban PHCs, there is shortfall of 35.5% of ANMs and 5% of doctors, while in urban CHCs, there is shortfall of 46.9% specialists. In terms of infrastructure, rural areas suffer from 25% shortfall in sub-centres, 31% shortfall in PHCs and 36% shortfall in CHCs. In urban areas, there is shortfall of 39% PHCS. In tribal areas, there is shortfall of 27.6% sub-centres, 30.7% PHCs and 28% CHCs (Rural Health Statistics, 2021-22 cited by CBGA, 2023). The Finance Commission recommended Rs. 70,051 cr in grants for strengthening of primary health care infrastructure in rural and urban areas. But the budget for 2023-24 has allocated only Rs 1385 cr for this purpose. This is too inadequate to meet the huge gap in infrastructure and provisioning of services that exists.

Stifling of Rural Development

The rural development sector requires priority to make up for the losses in income and employment suffered during the pandemic, to boost the levels of consumption and to accelerate fast-track economic recovery. The Union Budget has done the opposite. The Budget allocation for Department of Rural Development declined sharply from 5.6% of the total budgetary expenditure in 2020-21 to 4.2% in 2021-22 to 4.3% in 2022-23 and 3.5% in 2023-24 (BE). As a percentage of GDP, the decline is from 0.99% in 2020-21 to 0.68, 0.66 and 0.52 during the respective periods. This drastic reduction was reflected in the allocation for MGNREGS which is 46% lower than 2020-21 levels. The Deendyal AntyodyaYojana (National Rural Livelihood Missions) which supports Self Help Groups to set up village enterprises to increase their incomes. The allocation for this Programme has increased marginally from RE provision of Rs 2022-23 which, when inflation is taken out account, would be a decline and therefore unlikely to register any increase in coverage. Besides low allocation, SHG (Self Help Groups) enterprises suffer from low productivity, are mainly involved in agriculture and have low absorption of technology and are unlikely to contribute to poverty allocation. (CBGA, 2023)

The Rural Housing (Pradhan Mantri AwasYojana – Grameen Rural) is the only scheme to have been allotted a 12.5% increase over RE budget of 2022-23. The latter witnessed an increase of 142% from the BE allocation of the year with the expectation that this infrastructural investment would have a higher multiplier effect in raising the levels of employment and income. But the employment content of the scheme is 25% or even less as family labour is used in many cases. The scheme also suffers from poor quality of construction and wrongful exclusion and inclusion of beneficiaries in the implementation of the scheme. Additionally, identification of beneficiaries in the scheme is based on socio-economic and caste census (SECC) 2011 which was updated with Awas Survey carried out between January 2018 and March 2019 to update the number of beneficiaries who were left out of SECC. The enhanced allocation is only to provide for added beneficiaries based on this survey. (CBGA, 2023)

Pradhan Mantri Gramin SadakYojana (PMGSY) has the potential to create rural employment like MGNREGS. But its budget provision will remain at Rs 19,000 cr for every year up to March 2025 to complete on-going projects. The under-utilisation of funds in the last few years is a cause for concern. CAG(Comptroller and Auditor General), in its various reports 2016-2017-2021 has pointed out that 4496 projects were running into delays of one month to 11 years due to land disputes, paucity of funds and lack of clearance as well as deficiencies in data updating, monitoring and accounting system (CBGA, 2023), which requires addressing implementation bottlenecks.


The above narrative brings out that the tall claims made in the Budget speech of the Finance Minister about inclusive development do not stand the test of scrutiny. Despite the growth in the centre’s tax collection, which reached buoyancy of 1.72% in 2021-22 though declined to less than 1% in FY 2022-23 and 2023-24 (BE), the union government’s expenditure as a proportion of the country’s GDP has declined to 14.9% compared to 15.3% in 2022-23 (Revised Estimates), though in absolute terms it is projected to increase by Rs. 3.16 lakh crore. But a large part of even this small increase is directed towards increase in capital expenditure of Rs. 10 lakh crore – a growth of 37% compared to 2022-23 (RE) by sharply reducing revenue expenditure from 4.2% in 2022-23 (RE) to 2.9% 2023-24 (BE). It has pursued fiscal consolidation by reducing the fiscal deficit from 6.4% in 2022-23 (RE) and 6.7% in 2021-22 (A) to 5.9% of GDP. (Magazine, 2023) An additional fiscal stimulus through revenue expenditure was not incorporated in the belief of post-pandemic revival of the Indian economy. This fiscal consolidation is sought to be achieved through reduced social sector spending for 15 ministries, which broadly constitute the social sector from 33.5% of the Union Budget in 2020-2021 to 21.2% in 2023-24 (BE). Non-interest & non-subsidy current expenditure is being compressed by a sizable 1% of GDP in 202223 and a further 0.5% next year. (CBGA, 2023)The situation would be worse because States which account for a larger part of expenditure on the social sector are likely to face a resource crunch on account of discontinuation of the GST compensation and reduced transfer of just 31% of gross tax revenue compared to 37% in 2018-19, as revenue from cesses are not shared with states and a considerable portion of GST compensation cess has been used to repay the GST Council for loan given to the States during the pandemic. (Subramanian et al, 2023)Even increasing the limit of borrowing by State governments by 3.5% is accompanied by a restriction that this money would be spent on implementing power sector reforms. The Central government has scaled down its share in various centrally sponsored schemes which would reduce state spending due to inability to contribute a higher share. The Central government is also politically influencing reimbursement of central funds for works executed in respect to centrally-sponsored schemes such as MNREGS in W. Bengal through biased investigation reports by its officials, thereby increasing the financial burden of state governments to meet this liability. This would further constrain the ability of such States to undertake social sector development. With downgrading of the prospects of growth of the economy from the one projected in the Budget and continuing high inflation with no significant growth in real wages at all in India level in the last 8 years, (Dreze, 2023)and no attempt to tax the rich to garner resources for public spending, the poor and the marginalised face bleak prospects for dignified survival. Their economic neglect is compounded by undermining of their right-based entitlements and abridgment of labour rights and gradually dismantling of affirmative action. Pursuit of fiscal consolidation, in face of this distressing scenario, is a joke on them and explodes the oft-repeated and hugely advertised claim of Sabka Saath Sabka Vikas. (Participation and Development of all)


Aanchal Magazine (2023), ‘Sticking to Fiscal Consolidation Path’, The Indian Express, Feb 2, 2023
Ayer, SwaminathanAnklesaria(2023), ‘Shift from MGNREGA,’  The Economic Times, February 2,2023
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Bhagirath, Himanshu, N and Shagun (2023), ‘No Elixir for Rural India’, Down to Earth, 16-18 February, 2023
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Dreze, Jean (2023), ‘Wages are the Worry, not just unemployment’, The Indian Express, April 13, 2023
Economic and Political Weekly (2023), ‘The Budget Ignores the Demand Constraints’, Editorial, February 11, 2023, Vol LIV No. 6
Express News service (2023), ‘Govt has unleashed attack on MGNREGS: activists’, The Indian Express, March 15, 2023
Government of India, Ministry of Finance (2023), Economic Survey, 2022-23
Guru, Gopal (2023), ‘An insight into Mahola’, Economic and Political Weekly (Editorial) Vol. LVIII No. 6, February 11, 2023
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Suresh Babu, M (2023), ‘A balance between capital outlays and fiscal prudence’, The Hindu, February 2, 2023

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