Recently the acclaimed finance minister of our country
announced the annual budget for the year 2016/17 in the lower house. Many of us
have wondered what does this mean to the common man and how should one
interpret a budget of such mammoth proportions. On the outset this budget seems
to be a massive change in plans for the present Modi Government, but when we
dig deep into the realities one may argue that nothing much has improved since
last year and the probability of any at all in the future also seems bleak.
To break it down let’s borrow a little (only graphs and
charts) from an article published in The Hindu and authored by SAMARTH BANSAL (the graphs and charts used
from the article are purely for educational purposes and the author of this
article doesn’t intend to gain any commercial benefit from the same).
First lets have a
look at the proposed Government spending for the upcoming year and allocation
of the same across various sectors/ministries.
Let’s look at some of the most concerning
aspect of this allocation and distribution:
à We don’t find a pie that is dedicated to Higher
education explicitly, but according to the data the amount to be spent on the
same in the upcoming year is around Rs. 28,756 crore. Which is a mere 13% increase
from last year.
When we look at the above graph
we get a sense of how much other BRICS nation are spending for education compared
to us! A mere 3.5 to 4% of our GDP is being spent on higher education, which is
even lower than that of Russia. This is quite alarming considering Make in
India, Skill development and Digital India being the flagship projects of our
PM.
à Women and child development ministry gets just 0.88%
of the entire budget. Now why this is alarming shouldn’t be a question of
compulsion but should be of one’s own choice. According to the supreme court of
India every Indian city and town should house at least one “Nirbhaya center”.
In the mid 2014 the WCD ministry had proposed to open 660 of these centers as a
pilot project. When one glances through the proposal submitted by the WDC
ministry to the Expenditure Finance Committee (EFC) it comes to light that
these centers plan to hire retired police officers and lawyers to aid the
victims. The centers would be run on rented premises and also provide shelter
to the victims if needed. I don’t see a “Nirbhaya Center” in my city yet, or in
my state. It’s been two years since the proposal has been doing the rounds of
various ministries. Recently I read an article about the status of these
centers (promised by Ms. Meneka Gandhi to be functional by August 2015) http://theladiesfinger.com/investigation-where-are-the-one-stop-centers-for-rape-victims-under-the-nirbhaya-fund/
and looking at the status of these centers anyone would feel that the WCD
ministry could make use of some more funding.
àFew more areas of concern, according to the current
allocations, seem to be with “New and Renewable Energy Ministry” with only
0.25%, “Science and Technology Ministry” with only 0.52%, “Social Justice and
Empowerment Ministry” with only 0.37% and “Environment, Forests and Climate
change” with only 0.11% allocation of the entire budget. We all know the
importance of these ministries and why all of these could do away with more
funding than what is allocated to them.
àLets talk a little about the subsidies for a moment.
This whole budget is promoted as a poor man’s budget and pro-farmers. So
subsidies for farm related products and equipment matter a lot.
From the above graph, one can
make out that majority of our subsidy is spent on food and public distribution
system of the same. For a budget to gain the title of being pro-farmers, the
fertilizer subsidy is the one we should take a look at. Since 2009 there has
been a gradual decline in the fertilizer subsidy allocation and a slight
evening out from 2012 (from the graph). This year the government has allocated
Rs. 70,000 crore, which is again less than previous year, towards fertilizer
subsidy. Now this might seem a huge allocation, but lets have a look at the
ground reality. Satish Chander,
director-general of the Fertilizer Association of India has told The Indian
Express that Rs. 70,000 crore would be sufficient for the fiscal year per se,
but it cannot take care of the built up arrears from the previous years. Lets
have a guess; we will be starting the new fiscal year with outstanding subsidy
dues of Rs. 45,000 crore payable to the industry (source: Harish Damodharan, The Indian Express). This
means we are left with only Rs. 25,000 as effective allocation towards
fertilizer subsidy. There is also the issue of purchases related to urea, which
has not been addressed by Mr. Jaitley. So calling this budget a pro-farmer’s
budget seems like an after thought already. 
