Context: The Union Budget has faced sharp criticism for its failure to prioritize welfare schemes that support marginalized populations. Despite India’s significant challenges, including widespread poverty and malnutrition, the government continues to reduce allocations for key welfare programs. This reduction is particularly perplexing given that a significant portion of the population survives on meager daily incomes and relies on free food grains for survival. The National Democratic Alliance (NDA) government, now in its third term, appears to persist in the trend of underfunding critical welfare initiatives, a trend that has been ongoing since 2014-15.
Key Welfare Schemes and Their Underfunding
MGNREGA and NFSA:
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act (NFSA) are two of the government’s most significant welfare schemes. MGNREGA guarantees 100 days of employment to rural households, while NFSA provides free food grains to about two-thirds of the population.
- However, the Budget allocation for these schemes has been continuously reduced as a share of GDP since 2014-15, except during the COVID-19 pandemic. This year, NFSA’s expenditure has fallen to 0.63% of GDP from 0.72% last year, and MGNREGA’s allocation has decreased to 0.26% of GDP from 0.29%.
- These reductions are concerning in a country where over 100 crore people struggle to afford a healthy diet, and rural distress is on the rise.
National Social Assistance Programme:
- Vulnerable groups such as widows, the elderly, and disabled individuals living below the poverty line have been overlooked in the Budget. The National Social Assistance Programme, which provides monetary support to these groups, saw no increase in its allocation this year.
- The scheme’s budget allocation remains the same as last year in nominal terms, and its share of GDP has halved since 2014-15, from 0.06% to 0.03%. The pensions provided under this scheme are paltry, with elderly individuals receiving ₹200 a month and widows ₹300 a month—amounts that have not increased since 2006.
Welfare and Nutrition Schemes
Saksham Anganwadi and Poshan 2.0:
- The Saksham Anganwadi and Poshan 2.0 scheme, which aims to tackle child malnutrition and hunger, has seen a significant decline in its Budget allocation. Despite the critical need to address malnutrition, the scheme’s budget has fallen by more than half since 2014-15, from 0.13% of GDP to 0.06% today.
- This decline is alarming in a country where more than 50% of children under five suffer from chronic malnutrition, and anaemia rates among women and children are significantly higher than the global average.
Mid-Day Meal (MDM) Programme
The Mid-Day Meal programme, which covers about 12 crore children, has also seen its budget allocation halved as a share of GDP since 2014-15. Despite its successes in improving educational and nutritional outcomes, the programme’s funding continues to dwindle, and plans to introduce breakfast in schools have been rejected due to a lack of funds.
Education:
The share of central expenditure on primary and secondary education in GDP has declined to 0.22% this year from 0.25% last year. Despite high primary education enrolment rates, the quality of education and basic infrastructure remains inadequate, making this reduction in funding particularly concerning.
Health Sector
While the Budget allocation for health saw a slight increase, rising from 0.25% of GDP in 2014-15 to 0.28% this year, the increase is insufficient given the high out-of-pocket expenditure on health in India. This expenditure pushes millions into poverty every year, underscoring the need for a more substantial investment in the health sector.
The government’s refusal to increase welfare spending in the face of widespread poverty and malnutrition is deeply troubling. The Budget allocation for key welfare schemes has steadily declined as a share of GDP, despite the critical role these programs play in supporting vulnerable populations. The reduction in fiscal space due to tax cuts, such as the ₹8 lakh crore foregone since the corporate tax rate cuts in 2019, appears to have come at the expense of the poor and marginalized.
India’s poor Human Development Index rank of 132 and its growing inequality highlight the urgent need for a renewed focus on welfare. Without increased investment in welfare schemes, the country risks exacerbating existing inequalities and leaving millions of its citizens behind.