By Nageshwar Patnaik in Bhubaneswar, August 30, 2024: The Union Budget – 2024 is supposed to focus on four key pillars — annadata (farmers), mahilayen (women), yuva (youth) and gareeb (poor). In our three previous articles in this newspaper (August 6, 17 and 20), we have pointed out how the Budget has not addressed the issues concerning farmers, women and youths in right earnest. The Budget has also miserably failed to deal with the issue of poverty in India and its approach to welfare for the poor relies on limited entitlements.

Reallocation of resources evenly across the nation is one of the objectives of the Budget. The FM had stated that the main priority of the budget would be improving the “ease of living” for all citizens. Equal access to and control over economic and financial resources is critical for the achievement of equitable and sustainable economic growth and development. It has positive multiplier effects for a range of key development goals, including poverty reduction and increased welfare at both the household and macro level.

However, the Budget 2024-25 prioritises the demands of the organised sector and salaried classes while completely neglecting the economic and social security of millions of informal and unorganised sector workers. The Union government appears to prefer appeasing political allies through large expenditures rather than spend on the social sector. Incidentally, despite having an opportunity to break from previous patterns, the Modi 3.0 government’s first budget remains disappointingly predictable.

The World Inequality Report (2024) says, the top 10% of India’s population has improved its share of the national pie from 33% in 1957 to 56% in 2022, while the bottom 50%’s share has come down from 24% in 1957 to 12% in 2022. French economist Thomas Piketty in a research article has brought out how a mere two per cent wealth tax on people with a net worth above Rs 10 crore and an inheritance tax will generate 2.7% of the Gross Domestic Product (GDP) of India. The FM has not imposed any taxes on super rich.

Amartya Sen, the Nobel laureate economist, has highlighted the importance of addressing social inequalities and investing in education and healthcare to combat poverty in India and sustain economic development. The 2023 Multidimensional Poverty Index Report finds over a third of all poor people in the world live in South Asia—which is around 38.9 crore people. India contributes significantly to this number, accounting for almost 70 percent of the increase in extreme poverty.

Despite the rhetorical push of the ‘Viksit Bharat’ agenda for developed India ahead, critical schemes addressing the poor and the middle class have not received the required allocation of funds in the 2024-25 Budget. MGNREGA, a scheme providing rural employment was allocated only Rs 86,000 crore same as in FY23 RE, there has not been a sufficient increase in the allocation to this scheme.

The India Ageing report finds that presently close to six crore senior citizens in India fall into the poorest wealth category and approximately 18.7% of the elderly live without any income. Despite this, the allocation to the National Social Assistance Programme (NSAP), a core centrally sponsored scheme that provides non-contributory income support of Rs 200 to the elderly and Rs 300 to widows and persons with disabilities, has been increased by only Rs 16 crore.

India presently allocates approximately 1.4% of GDP for social sector (excluding health) as against an average of 2.5% for low-and middle-income countries as per the World Social Protection Report 2021. The decreased and stagnant spending on social security makes it evident that these issues continue to hold little importance for the government.

Needless to say that social security is an essential requirement of social justice. Social security is a set of means that influences human development by addressing deprivation and improving living standards and access to entitlements. Financial inclusion and access to better financial infrastructure act as stepping stones for better economic stability. Universal access to basic amenities and public infrastructure, such as drinking water, sanitation, electricity, decent housing, food and nutrition is imperative to ensure a decent quality of life, healthier lives, improved job opportunities and, subsequently, higher economic growth. Universal access to healthcare is instrumental to achieving equality of opportunities. Monitoring Universal Health Coverage requires measuring health service coverage and financial protection.

In contrast, the main budget speech was surprisingly silent on health. The FM seems to have forgotten the agony gone through by the poor during COVID-19 when the abysmally poor health infrastructure and primary healthcare centers were exposed. The allocation to the Health Ministry has hardly gone up from last year’s allocation of Rs 86175 crore to Rs 87656 crore in 2024-25. The allocation to the health sector which should have been 2.5% of GDP has been pegged at a meager 1.3%.

Education is fundamental to human and social progress, developing an equitable and just society, and promoting national development. India aims to achieve Goal 4 of Sustainable Development Goal (SDG) which is to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” by 2030. The broader objective of the education and skill-related interventions is to reduce the inequality of opportunities among the population so that in the medium and long run, the inequality of outcomes will be eliminated.

The National Education Policy 2020 document calls for allocating 6% of GDP to education, but both Central and state governments currently spend less than 3% of GDP, also recommended by the Kothari Commission. However, both the Central and state governments currently spend less than 3% of GDP on education. Furthermore, there has been no notable increase in education spending observed so far.

The Union Budget 2024-25 veers around promoting macro-growth and fiscal stability leaving the majuscule section of the people to fend themselves on their own.