Flagship social sector schemes may get a push in interim Budget

With elections in mind, the UPA-II Government is expected to give a push to social sector spending in its interim Budget on February 17, especially flagship schemes on rural health and jobs, food, housing and social security.

With recent speeches by the UPA Chairperson Sonia Gandhi projecting welfare schemes among the government’s biggest achievements, there are indications that schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), the National Rural Health Scheme, Indira Awas Yojana and the National Rural Livelihood Mission may get some leg-up in the pre-poll interim Budget.

While urban voters are being wooed by raising the number of subsidised cylinders to 12, delinking these with Aadhaar and Congress Governments in Haryana and Maharashtra reducing power tariffs, the party knows that it is rural votes that count more.

Social activists, too, have flayed the Finance Ministry reportedly being in favour of a cut in social spending, especially on rural schemes, to set right the fiscal and current account deficits.

In a letter to Sonia Gandhi last week, former National Advisory Council member Aruna Roy said the Government’s contention of lack of resources was “biased against the poor and objectionable” and criticised the Finance Ministry for seeking to “cut budgets from across the social sector spectrum”.

Roy quoted “disturbing reports” of some States and districts that were facing a cash crunch and were refusing to implement the scheme.

Some UPA Ministers, too, are not in favour of pruning social sector spending. Rural Development Minister Jairam Ramesh wrote to the Prime Minister, terming the impending cuts as “savage” that could lead to the Congress paying a “heavy political cost”.

In fact, last week, Ramesh announced that MGNREA wages would be hiked from April this year due to inflation.

“A notification in this regard will be placed before Parliament in the coming session scheduled to begin this week,” he said at an event.

According to the Centre of Budget and Governance Accountability, spending on the social sector in India was less than 2 per cent of GDP even as revenue foregone as tax breaks to corporates amounted to 5.7 per cent of GDP.

With recent opinion polls hinting at the ‘poorest ever performance’ by Congress in the 2014 general elections, largely due to rising prices, pressure is mounting on the party to be seen as pro-poor. All eyes are on how the Finance Ministry, which has the keys to the government’s coffers, balances ‘good economics’ with ‘good politics’ in an election year.

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