Industry & Economy
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Economy
Income transfer budget equals 16% of consumption of rural poor
Sudhanshu Ranade
Chennai
,
Aug. 8
A little more than 31 per cent of the rural population in 2003 was in the consumption group lying below Rs 380 per capita per month.
Total rural population for the year was estimated at 788.7 million, so this means this group was made up of 245.6 million people.
The average household expenditure for this group was Rs 18,375. Expenditure for the group as a whole in 2003 adds up to Rs 86,846 crore.
According to the 2003-04 Annual Report of the Ministry of Rural Development, the budgetary outlay for income transfer programmes in 2002-03 was Rs 13,670 crore. Which means the budget for income transfers was nearly 16 per cent of the annual consumption of the lowest 31 per cent of the rural population. Of course, this is the amount of money that was allocated for spending, not the amount of money that actually reached them.
A major gap opens up between outlays and outcomes due to the fact that a chunk of income support outlays goes towards funding rural works under a variety of programmes. And these programmes require 50-60 per cent of the total expenditure on materials and equipment. So, straightaway more than half the money intended for them is snatched away from the hands of the poor. At the same time, there is no tangible outcome from the outlay on materials and equipment, because works have to be small and widely scattered to reach the poor where they are. This is one issue on which the Left could usefully intervene by calling for a cut in outlays for income support programmes, in such a way that half the money saved accrues to the Government and the other half gets added on to the benefits that actually reach the poor.
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