‘Budget has little for demonetisation-hit social sectors’

It’s like demonetisation didn’t happen at all, activists and economists exclaim.

Budget 2017-18, coming right after the demonetisation move, had raised hopes of greater allocations for social sectors — what with Prime Minister Narendra Modi’s mantra of Sabka saath sabka vikaas . Yet, there is all-round disappointment.

“It is quite extraordinary. Post demonetisation, this is when you needed substantial moves for the social sector. But hardly anything has been done even in sectors like health and education, which are employment-intensive activities and could have given a boost to economic activities,” Jayati Ghosh, Professor of Economics, Jawaharlal Nehru University, told BusinessLine .

On the face of it, a massive allocation of ₹48,000 crore to rural job guarantee scheme MGNREGS gives an impression of social focus. However, this does not actually mean a vast increase.

“Legally, the government cannot restrain funding for MGNREGS, but they have been trying to do just that.

“The allocation for the scheme is demand-driven and has to increase. The government cannot set a limit,” explained Ghosh.

The allocation for the scheme was ₹38,100 crore in last year’s Budget. However, two more supplementary allocations during the year took that amount to ₹47,500 crore, thus giving a mere 1 per cent increase to the allocation this year.

The People’s Action for Employment Guarantee, of which Aruna Roy’s Mazdoor Kisan Shakti Sangathan is also a member, has estimated that this fiscal will close with pending liabilities of ₹13,482 crore under the scheme. “Every year this happens. The year starts with a backlog of around ₹4,000-5,000 crore. This year it is much more,” Ghosh said.

Even as Finance Minister Arun Jaitley announced plans to pull one crore households out of poverty, and make 50,000 gram panchayats poverty-free by 2019, experts remain unimpressed as no new allocation was made towards this end.

The allocation for the Pradhan Mantri Gram Sadak Yojna, under which the government is claiming significant achievements, has not seen any increase in allocation.

While the Minister made big announcements for the youth, including in education, the numbers don’t reveal these ambitions. The allocation for Sarva Shiksha Abhiyan has increased by a mere 4 per cent (₹1,000 crore) to ₹23,500 crore. Allocation for teacher training has been increased this year to ₹926 crore.

However, this increase comes after the allocation was significantly reduced to ₹830 crore for 2016-17 from ₹916 crore in 2015-16.

The plans to give infrastructure status to affordable housing has been received positively, but clarity is awaited on the definition of “affordable”.

“Affordable housing will now finally be given infrastructure status. This is very significant, because it will provide the vital budget housing segment with cheaper sources of finance including, but not restricted to, ECBs (external commercial borrowings). Also, re-financing of housing loans by NHBs (National Housing Bank) can give a leg-up to the sector,” said Anuj Puri, Chairman & Country Head, JLL India.

The environment, the hot topic last year, was conspicuous in its absence. The Finance Ministry’s nearly two-hour-long speech had no mention of environment, climate change, pollution or afforestation.

India has pledged to add a carbon sink of 2.5-3 billion tonnes of CO2-equivalent via additional forest cover by 2030, requiring massive investments of ₹1 lakh crore annually, according to an analysis by The Energy and Resources Institute (TERI). However, there was no sign of any such investment in the latest Budget. The allocation to the Environment Ministry increased by just about ₹500 crore from the previous year to ₹4,042.72 crore.

Given India’s pollution chaos over the past year, which is estimated to be costing the country over 8 per cent of the GDP on account of health impacts, it was expected that the Budget would take the bull by the horn. Divya Datt, Associate Director, Integrated Policy Analysis Division, TERI, said: “I was expecting more on pollution. He (Jaitley) spoke about poverty and health and should have brought into it environmental quality and its health impact. That is also important to give a signal to people.”

Chandra Bhushan, Deputy Director General of the Centre for Science and Environment, also expressed disappointment with the Budget in the context of environmental concerns.

“Neither the Economic Survey nor the Budget mentioned environmental or health challenges,” said Bhushan.

The announcement of a model law on contract farming has also raised alarm with environmentalists. “This can lead to additional infrastructure as well as better management and aggregation of farms, which is good. However, it also has the capacity to aggravate environmental issues as it will promote more intensive agriculture, increasing pressure on water and promoting mono-culture,” TERI’s Datt said.

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