Budget 2014: Rs100 crores worth of missed opportunities for the social sector
The budget offers little for improved social services in India
In the run-up to his much-anticipated maiden budget, finance minister Arun Jaitley claimed that his budget would act as a check against “mindless populism” in India’s policymaking. What he failed to mention is that he would replace this so-called “mindless populism” with “ ₹ 100 crore” policymaking. From this columnist’s perspective, all that today’s budget had to offer India was a few mindless ₹ 100 crores scattered across various schemes. And in doing so, Prime Minister Narendra Modi and his government have missed a 100-crore opportunity to make good their campaign promise of bringing in an era of maximum governance in India—although it must be noted that the finance minister has set aside ₹ 100 crore for a programme promoting “good governance”!
From the point of view of social sector programmes, little was expected of this budget. Given the overall health of the economy and the growth-focused rhetoric of the government, most analysts had anticipated all but marginal hikes in budgetary allocations and this is precisely what the budget delivered. However, given the emphasis that this government had placed on governance and delivery, there was hope that it would use its maiden budget as an opportunity to lay down a roadmap or at least a broad vision for reforming social sector service delivery in India. Indeed, this is precisely what the Economic Survey tabled by the government on Wednesday had emphasized. The survey made a strong case for the urgent need to revamp social sector schemes, reduce the number of schemes, improve delivery and crucially, bridge the gap between outlays and outcomes. But in his budget speech, Jaitley chose to ignore the suggestions of his survey and focus instead on deepening the status quo. In fact, at no point in his two-hours-and-eight-minute speech did the FM refer to the importance of outcomes in social sector programmes. In this sense, Congress president Sonia Gandhi was spot on when she commented that the National Democratic Alliance (NDA) has simply copied the United Progressive Alliance’s (UPA’s) policies and schemes.
Take, for instance, sanitation, a major focus of this government. In his speech, Jaitley committed his government to ensuring that every household in the country has a toilet by 2019. And putting his money where his mouth is, he has increased allocations for the Nirmal Bharat Abhiyan, the government’s flagship rural sanitation programme, by 85% from ₹ 2,300 crore (revised estimates) in 2013-14 to ₹ 4,260 crore in 2014-15. But, it is well-accepted that the real constraint to achieving sanitation is not access to toilets but usage. And as I have argued in previous columns in this newspaper, addressing this requires a financing approach that privileges experimentation and innovation over construction. Rather than committing to constructing toilets in every household, what the country really needed was a commitment, perhaps of a few ₹ 100 crores, towards setting up an innovation fund that incentivizes experiments focused on sanitation outcomes. But what we got instead was more money to solve the wrong problem.
Another example of a missed opportunity is elementary education. In his speech, the FM asserted his government’s commitment to elementary education. However, when it came to prioritization, he chose to ignore the most critical issue that India’s education policy faces today—that of improving learning outcomes. Instead, his speech concentrated on closing the infrastructure gap, particularly the provision of toilets and drinking water. Learning outcomes found no space in the FM’s speech. There is however, one interesting and potentially game-changing commitment— ₹ 30 crore to a school assessment programme. This money is likely to be used for assessing the quality of schools through various parameters, including learning outcomes. This is an important step forward toward building an outcome-focused education system. And is worth watching out for as it evolves.
Finally, to the much-debated issue of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act). In a post-budget interview, the FM argued that he had ignored the wise counsel of many economists and committed his government to an improved MGNREGA. And rather than reduce MGNREGA allocations, as many had advised, he has kept the allocations at ₹ 34,000 crore, a marginal ₹ 1,000 crore increase from the 2013-14 allocation. What the FM failed to mention is that in 2013-14, several states ended up with large outstanding liabilities, resulting in severe delays in making wage payments to beneficiaries. An improved MGNREGA needed a higher budgetary allocation if it was to be a genuine guarantee of employment to the poor. And in failing to increase allocations, the FM has robbed MGNREGA of its primary objective.
In sum, the budget offers little for improved social services in India. For a government that promised governance, this budget was its grand opportunity to articulate a vision for reforming India’s creaking service delivery architecture. But what we’ve got is nothing more than 100 crores worth of missed opportunities.
Yamini Aiyar is a senior research fellow and director of the Accountability Initiative of the Centre for Policy Research.
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First Published:10 Jul 2014, 08:31 PM IST
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