Budget of poverty & poverty of budget

By Era Sezhiyan

IN HIS 1991-92 budget, Dr. Manmohan Singh introduced a new strategy with emphasis on privatisation and globalisation of the Indian economy. He declared: ``Our industry has come of age. Direct foreign investment would provide access to capital, technology, and markets. It would expose our industrial sector to competition from abroad in a phased manner.'' In its 1998 election manifesto, the BJP was critical of the `Phoney Liberalisation: A More Impoverished Economy'' and accused the Congress(I) Government of having `surrendered to the IMF conditionalities'. The manifesto stated: ``The last six years, when the much touted reform has been under way, have been years of extreme difficulty for the common man.''

After a decade of liberalisation of Dr. Manmohan Singh comes the 2001-02 budget of the Government led by the BJP. In para 4 of his budget speech, the Union Finance Minister, Mr. Yashwant Sinha, says: ``It is now 10 years since economic reforms began in 1991. During this period, the economy had grown at an average rate of 6.4 per cent a year since 1992 compared to the 5.8 per cent recorded in the 1980s. Poverty has fallen from 36 per cent in 1993-94 to 26 per cent now.'' It is fallacious to attribute the fall in the poverty percentage to the GDP growth, as there were periods when rise in the rate of the GDP growth did not have lower poverty percentage. Still it is to be noted that the BJP and its Finance Minister are now paying tributes to the march of liberalisation initiated by Dr. Manmohan Singh. At the close of his speech, Mr. Sinha says: ``This is a budget for carrying forward the second generation of economic reforms. This is a budget for growth. This is a budget for equity with efficiency. This is a new deal to the people of India in the new millennium.'' As the financial commander of the second generation of economic reforms, Mr. Sinha has given more access to foreign capital in the equity market and reduced the duties on many items including cars, soft drinks, imported gold. He will go ahead with his proposals to disinvestments and privatisation.

In its 1998 manifesto, the BJP described the six years of liberalisation from 1991-92 as the ``years of extreme difficulty for the common man''. A brief study of the budgetary allocations and expenditures by some of the Ministries/ Departments reveals that the three years of the present Government have become additional years of more difficulty, more impoverishment, more disregard of the needs of common man. The 1998 BJP manifesto promised many lofty schemes: `Agenda for Invigorating Rural India', `Education for All', `Health for All' and `Housing for All'. The 1999 common election manifesto of the NDA also made firm commitments: ``We will earmark more funds for agriculture and rural development.'' ``We are committed to a total eradication of illiteracy!'' ``We will increase spending on education up to 6 per cent of the GDP''. ``We will spare no efforts to ensure drinking water to all in the next five years!''

To assess the performance of the present Government in respect of social welfare schemes promised by the BJP, I have selected a few Ministries and Departments such as `Agriculture', `Education', `Rural Development', `Rural Water Supply and Sanitation', `Health' and `Urban Development and Poverty Alleviation'. Over three years, I find that the NDA Government has not only failed to allocate adequate funds needed by the respective services of national importance, but it woefully failed to spend even the meagre grants obtained through the annual budgets. The Union Agriculture Ministry has no will or time to use the grants totalling Rs. 18,730 crores given to it - over three years - 1998- 99, 1999-2000 and 2000-01. It has `surrendered' Rs. 1,502 crores of this to detriment the development of the agriculture sector.

Education is an essential instrument for social and economic development of the country. There is no need here to refer to the dismal failure of the Governments in succession to implement the Constitutional Directive on free elementary education or to spend 6 per cent of GDP for education as per the Kothari Commission Report (1964-66). The annual reports of the Education Ministry have recorded the national expenditure for education in independent India to be stagnant between 3 and 4 per cent. Instead of finding and allotting more resources to spread educational facilities, the HRD Ministry has failed to use even the meagre Rs. 27,741 crores given to it by surrendering a sum of Rs. 1,598 crores. There were specific grants of Rs. 9,465 crores for elementary education under the HRD Ministry; there also a sum of Rs. 527 crores had been left unspent from the grants given. The Ministry of Rural Development has `surrendered' Rs. 1,380 crores out of the Rs. 31,995 crores sanctioned. Large populations in rural areas and in urban slums have no facilities to meet minimum basic needs. As per the Economic Survey, 91 per cent of the rural parts do not have any sanitation facilities. To remove this disability and disgrace suffered by 700 million people in rural India, the budgets for three years allocated a grand sum of Rs. 336 crores in all; but some blocking in the conduit pipes of the department has obstructed the flow of funds to the extent of Rs. 51 crores.

The Health and Family Welfare Ministry had `surrendered' Rs. 1,107 crores of the Rs. 18,419 crores given to it. There is a Ministry with a big name of `Urban Employment & Poverty Alleviation'. Poor Ministry! It has not employed its time to spend the grants to the schemes of poverty alleviation. It had to surrender Rs. 212 crores out of the Rs. 1,100 crores sanctioned over the three years. The same is the story of the Ministry of Small Scale Industries & Agro and Rural Industries in surrendering Rs. 262 crores out of Rs. 2,741 crores. If we were to go through the 100 Demands given in the budget documents, we may find more instances of enormous ineptitude, if not monstrous indifference, of the Executive in denying dispensation of the amounts granted for the social schemes of national importance. Whenever the Executive plans to reduce expenses, the first casualties will always be the social welfare schemes.

There is one service that manages to get more and more funds above the budget estimate every year. That is the Cabinet Secretariat, which controls the entire Executive and plays an important role in the decision-making of the Cabinet. The annual expenditure of the Cabinet Secretariat has been expanding at a rapid pace from the budget estimates of Rs. 6.16 crores in 1998- 99 to the revised estimates of Rs. 24.04 crores in 2000-2001. The budget for 2001-2002 has allocated Rs. 36.07 crores. At least, the Cabinet and its budget are taking care of this secretariat, which should be very active and essential if we are to judge its performance by the expanding volume of expenditure every year.

The Economic Survey and the budget present impressive data at the macro level. For instance, GDP for 2000-2001 is estimated to be Rs. 19,72,700 crores (i.e. 19.727 trillion). The total expenditure of the Union Government for 2001-2002 is estimated at Rs. 3,75,223 crores. Really huge, mind-boggling figures! But there is none to explain to the common man in the village as to why the macro level economics of the Government has not improved the economic conditions at the micro level, why the `fastest growing' economy in the world has been deadly slow in reaching the impoverished families in darkened huts and hamlets of India and why production and creation of wealth counted in billions and trillions has failed to alleviate the misery of ill-starred millions.

Planning and budgetary process are considered to be instruments towards eradication of poverty, by providing the minimum basic needs of literacy, health, housing, employment, social justice to all the people. If production growth and creation of wealth are accomplished without equitable distribution of benefits, it will not only widen the gap between the rich and the poor, but it will make the lives of the poor more miserable with galloping price- rise and fall in living standards. The budget for poverty alleviation is itself in a poor state of health, limping and disabled. The budget for removal of poverty will be effective only after removal of poverty of the budget itself.

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