This government puts its money where its mouth is

The Union Budget 2017-18 was presented by finance minister Arun Jaitley on 1 February to Parliament. Many recent analyses have looked at the budget as a policy document that signals to the public the progress that the government has made, as well as to keep an eye on the future. In our past articles, we sought to establish a vocabulary for the budget in terms of a word analysis of the finance minister’s budget speech. In this article, we extend this approach to see if the finance minister is able to put his money where his mouth is. We have therefore mapped the number of mentions popular schemes receive in the budget speech to their expenditure allocations since 2011.

First, it is vital to understand the importance of Centrally sponsored schemes (CSS) in the Union’s expenditure. Since the advent of the planning period, the schemes implemented by the government have ranged from a high of 213 in 2003-04 to 99 in 2007-08 following rationalization. Since Prime Minister Narendra Modi took charge, there has been a sharp reduction, with 66 schemes sponsored by the Centre in 2016. In line with his call for “maximum governance, minimum government”, the sub-group of chief ministers on CSS has recommended these be reduced to 29 umbrella schemes. What remains interesting, however, is that there are several schemes that have persisted over the past decade, while others are readily dismantled or rebranded (such as the Total Sanitation Campaign into the Swachh Bharat Mission).

Moreover, we choose to study schemes that span sectors (from health and education to labour and livelihoods) and have featured prominently as part of the budget under “major programmes under Central Plan” since 2011-12.

We look at nine public policies (CSS) over the financial years 2011-12 to 2017-18, and their mentions in the budget speech as well as allocations. The schemes that we include in this analysis are the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the National Rural Livelihood Mission (Aajeevika), the Prime Minister Gram Sadak Yojana (PMGSY), the Prime Minister Employment Generation Programme (under the micro, small and medium industries ministry), the Integrated Child Development Services Scheme (ICDS), the Mid Day Meal Scheme (MDM), the Sarva Shiksha Abhiyan (SSA), the National Health Mission (rural and urban), and metro rail projects (MRP). The allocation over time is given in the chart.

In essence, this analysis will tell us about the emphasis placed in the budget speech related to a particular scheme vis-à-vis the financial allocation made towards it. We compute statistical correlations between the financial allocation and budget speech mentions to understand the extent of association between a programme in terms of financial resources as well as its policy emphasis in the budget. There are some caveats in our analysis—for example, a low correlation between mentions and allocations might either imply fewer mentions but high allocations or low allocations and more mentions. Furthermore, these schemes may be emphasized more by the government via media other than the budget speech (say, for example, the Economic Survey).

Particularly for the MGNREGS (0.66) and the National Livelihoods Mission (0.68), we find a strong and positive correlation between allocation amounts and mentions in the budget speech. This means that there has been a consistent dialogue and higher allocation for these two schemes. This is not entirely surprising given that these are considered flagship large-scale government welfare programmes aimed at the alleviation of rural and urban poverty.

The ICDS was first launched in 1975 and in our analysis, we find that although there has been increasing allocation, it is less likely to be mentioned in a budget speech (a strong negative correlation of 0.41). Allocations to the Mid Day Meal Scheme (launched in 1995) have ranged from Rs10,380 crore in 2011-12 to Rs13,215 crore in 2014-15 to Rs10,000 crore in the latest budget. We find no correlation between the financial allocations for MDM and its mentions in the budget speech, potentially due to the fact that no finance minister has mentioned it in his speeches since 2011-12 (it was mentioned once in 2013-14 by P. Chidambaram and again in 2015-16 by Arun Jaitley).

For the other schemes, we find no robust correlation between financial allocations and mentions in the budget speech.

Over time, we observe that the allocations are more likely to be commensurate with the mentions in the budget under the National Democratic Alliance (NDA) government (a three-year average of 0.62, strong positive correlation), relative to the United Progressive Alliance (UPA) (a three-year average of 0.21, weak positive correlation).

In 2014-15, when one interim budget and a final budget was presented, there is lower correlation (-0.05 and -0.18, respectively) between the financial allocations and the number of mentions. This perhaps indicates that the NDA government appreciates the need to create an image for welfare schemes, rather than simply allocate funds to them. This is broadly in line with Prime Minister Modi’s emphasis on good public relations with the mission to connect with citizens who are often key to the success of government programmes.

It is no surprise then that the strongest positive correlation was found for the most recent budget of 2017-18 (0.73).

This analysis has come up with a way to measure the emphasis given to large-scale Centrally sponsored welfare schemes. From previous word and thematic analyses, we know that the NDA and UPA governments vary on their emphasis in various policy areas. We now know that while the current government backs up its policies by mentions in the budget speech, it is perhaps only the more recent and rebranded schemes that get mentioned in concurrence with their financial allocations.

Anirudh Tagat and Hansika Kapoor are, respectively, research authors at the departments of economics and psychology at Monk Prayogshala, Mumbai.