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Mainstream, VOL LII No 29, July 12, 2014

Budget and Vulnerable Sections of Society

Monday 14 July 2014, by Bharat Dogra


The annual Budget of the Central Government should always reflect high levels of concerns for weaker sections and rural areas, but this year there are additional reasons why the newly elected government should be even more concerned about this. Just a few days before the Budget, new estimates of poverty have appeared confirming the well-known fact of actual poverty levels being significantly higher. In fact even the new upscale estimates are likely to be an underestimate of the existing situation of the number of people who are unable to meet their basic needs in a satisfactory way. Continuing food inflation has further increased the survival problems of a large number of people.

The indications so far are that weather conditions will not be favourable and significant parts of the country can face serious drought situations. Clearly there is a big need for the government to stand with the farmers in times of difficulties and distress. The government needs to play a very supportive role towards farmers at such times, both to protect their livelihood and ensure adequate production of food crops. The situation in India has been such that even in normal times there is a definite need for the government to raise the allocations for social sectors and more particularly for social protection because these have been persistently kept at very low levels compared to the real needs of our people and also compared to the achievements in this area of several other developing countries. The recently published Asia Development Bank report indicated that social protection spending at only 1.7 per cent of the GDP in India is much lower than the 3.4 per cent level achieved by Asia’s lower middle income countries and the 5.4 per cent level achieved by China.

Keeping in view this background, let us try to take a quick look at whether the first Budget of the new government has been good for the weaker sections and farmers or not. There are two ways of looking at this issue. Firstly, we may ask whether the allocations which are important for weaker sections have been reduced or increased compared to the allocations made by the UPA Government in the previous year’s Budget and again in the Interim Budget for the present year. Here we see that the new government has by and large maintained the allocations made by the UPA Government in important areas like agriculture, food subsidy, MGNREGA etc.

In fact as far as the allocations for the Scheduled Caste Sup-Plan and Tribal Sub-Plan are concerned, there has been some increase compared to the allocations made in 2013-14.

However, we can also ask a different question. Has the new government’s Budget lived up to the real needs of the weaker sections and farmers and their expectations for ‘acche din’? Here we have to answer clearly and firmly that this Budget has not lived up to the real needs and expectations.

In order to generate adequate resources to meet the needs of the poor people, direct taxes have to be raised significantly and there has to be a huge assault against black money. There is no evidence of this in the Budget beyond rhetoric. Also there is no evidence at all of any effort to reduce inequalities.

Bharat Dogra is a free-lance journalist who has been involved with several social initiatives and movements.

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