An obstinate refusal to focus on welfare Premium

The National Democratic Alliance, or NDA 3.0, appears to continue the trend the alliance set in its two previous terms by reducing welfare allocations

The Union Budget has drawn stern criticism from several quarters of the populace for a variety of reasons. On the welfare front, the government has, yet again, failed to increase expenditure on critical welfare schemes that support the marginalised in the country. The government’s obstinate refusal to focus on welfare is perplexing to say the least, in a country where, according to the government’s own data, about 34% of the population survives on less than ₹100 a day and over 81 crore people require free foodgrains to get by. The National Democratic Alliance (NDA) now, or NDA 3.0, appears to continue the trend the alliance set in its two previous terms by reducing welfare allocations — as shown in the analysis below based on Budget papers.

Two of the government’s biggest welfare schemes, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act (NFSA) (Food Subsidy) have seen their Budget allocations continuously fall as a share of GDP since 2014-15, except for the COVID-19 pandemic years when the government had to rely on these two schemes to avert a major disaster. MGNREGA guarantees every rural household 100 days of employment whereas the Food Subsidy is responsible for providing free foodgrains to about two-thirds of the population.

The NFSA had an expenditure of 0.72% of GDP last year, whereas this year, it has fallen to 0.63% of GDP. A truly bizarre decision in a country where over 100 crore people cannot afford a healthy diet and where just about 50% have three meals a day.

Similarly, the allocated budget for MGNREGA this year is 0.26% of GDP as compared to the 0.29% allocated last year. As a share of GDP, these two schemes today have a 25% lesser combined Budget allocation than they did in 2014-15 when the NDA first assumed power. With stagnating rural real wages and systematic underfunding of MGNREGA, it is no wonder that rural distress is spiking across the country.

Vulnerable groups such as widows, the elderly, and disabled individuals below the poverty line too were ignored in the Budget. The National Social Assistance Programme, which provides monetary support to the groups mentioned as well as families who have lost their breadwinner, saw no increase in its allocation in the Budget. Its Budget allocation this year is exactly the same as last year in nominal terms. Its expenditure as a share of GDP has halved since 2014-15, from 0.06% to 0.03%.

The scheme provides paltry pensions of ₹200 a month to the elderly and ₹300 a month to widows — an amount that has not increased since 2006 despite repeated requests from dozens of economists. Even at a poverty line of ₹30 a day, these vulnerable groups would be living at least 66% below the poverty line if left solely to the devices of the state.

Recently, the Women and Child Development Minister admitted in Parliament that more than 50% of children under the age of five in India suffer from chronic malnutrition. Moreover, anaemia rates in Indian women and children are 20% and 15% higher, respectively, than the global average. Saksham Anganwadi and Poshan 2.0 is a welfare scheme which aims to tackle child malnutrition and hunger. The Anganwadi programme was merged with the Prime Minister’s Overarching Scheme for Holistic Nourishment (POSHAN) Abhiyaan and a nutrition scheme for adolescent girls in 2021-22. However, even with additions, the Budget allocated for the same has declined by more than half since 2014-15 — from 0.13% of GDP then to 0.06% of GDP in the recent Budget.