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Budget as the art of delusion

By John Samuel

The rhetoric of poverty alleviation, healthcare and education for the poor in the Union budget is exposed by the allocations actually made. The plan capital allocation for education has declined from 30 paise per head in 2002-03 to 18 paise in 2003-04. And surely the government doesn't expect the millions who can barely afford a roti a day to pay health insurance premiums?

The Union Budget of 2003-4 is a budget of 'Ifs and Buts' If only there were private players to invest another Rs 58,000 crore, we could hope for an ambitious infrastructure development project worth Rs 60,000 crore... If only the government could raise Rs 13,200 crore from disinvestment... If only we had a good monsoon...If only all these miracles happen, we can still anticipate a growth rate of 6.3% per annum, after the great performance of 4.4% this year!

If only all our poor people had enough money and skill to get themselves a healthcare policy from GIC, we could dream of healthcare for all. If only there were enough hospitals in rural areas, all the poor could go and get hospitalised within minutes! If only the poor had Rs 20,000 to 30,000, they could easily get reimbursed after they had paid the money to the private hospitals!

There are too many such ifs. The problem is that all such ifs lead to a but. But the chances of raising Rs 58,000 crore a year are too optimistic to be realistic. But the country is still facing another successive drought. But only 10% of villages in India have hospitals. But there are millions without enough money to have a roti a day, let alone save Rs 700 a year for health insurance. That is why the politically correct language of Jaswant Singh's budget amounts to one big BUT.

In the midst of cheerful budget hallelujahs by corporate leaders and the Delhi-Mumbai finance pundits in the television studios, how many people noticed that Plan capital allocation for education has declined from 30 paise per head in 2002-2003 to 18 paise per head in 2003-04? The Sarva Shiksha Abhiyan, a scheme launched in November 2000, finds increased allocation. However, this is accompanied by drastic cuts in the allocation for Operation Blackboard, which got a mere Rs 20.09 crore in 2002-03, compared to Rs 475 crore in 2001-02. Did anyone notice that the National Programme on Women's Education has been scrapped and put under the Sarva Shiksha Abhiyan? The non-formal education scheme too has been completely ignored in this year's budget. The budget priorities do not provide any indication that the Union government is serious about advancing the recent constitutional amendment to guarantee the fundamental right to education.

The budget analysis by the National Centre for Advocacy Studies, Pune, and Centre for Budget Accountability, New Delhi, highlighted the gulf between the rhetoric of the budget speech and real allocations, particularly with reference to the rural poor and marginalised. The per capita allocation for medicine and public health as well as allocations for the welfare of the schedule castes and tribes have declined. The allocation for primary education is far from adequate when more than 62 million are still out of school. The reduction in the budget for agricultural and allied services will adversely affect the growth of the agricultural sector and further erode the livelihoods of marginalised farmers and landless labourers.. The budget is an exercise in making the urban middle class and corporate leaders feel good, while the poor get more rhetoric and less and less money from the kitty. The stark contrast between the rhetoric of poverty eradication, healthcare and education in the budget speech and the real allocation exposes the delusion.

The non-Plan allocation for agriculture and allied services has plummeted from Rs 1217.88 crore in the previous year to a mere Rs 797.5 crore, with a substantial reduction of Rs 420.31 crore. The analysis further points out that the real Plan Expenditure for rural employment also registered a substantial reduction of Rs 191.30 crore, from Rs 2706.71 crore in 2002-03 to Rs 2515.41 crore in 2003-04. There is a decrease of Rs 11 crore in the Revenue Expenditure for rural employment. There has been a constant decline in the Plan allocation for minor irrigation and a further Rs 3 crore reduction in the capital expenditure on irrigation and flood control. No special scheme has been announced for agriculture or rural development, in spite of the severe drought. Such reductions, accompanied by the proposed hike in urea prices, will adversely affect the agricultural sector and consequently large sections of dalits and adivasis, who form the majority of landless labourers.

The lack of budget priorities in the health and education sectors deeply affects the social and economic development of the poor. Capital outlay on medical and public health was reduced from Rs 47.71 crore in the last budget estimates to Rs 37.10 crore this year. Instead of strengthening and increasing the outreach of the public healthcare systems, the budget further encourages the privatisation of healthcare. The proposed tax benefits to financial institutions for providing long-term capital expenditure to private hospitals would further decrease the accessibility and affordability of healthcare for the poor, particularly the rural poor.

The proposed healthcare insurance scheme is high on promises and low on real viability to the people in remote villages. The rural poor, without adequate income and livelihood, are expected to pay for the policy and are supposed to access healthcare from private hospitals, which are often very distant from rural areas. According to the health insurance scheme a premium equivalent to Re 1 per day for individuals and Rs 1.50 per day for a family of five and Rs 2 per day for a family of seven will entitle them to reimbursement of hospitalisation expenses up to Rs 30,000 and cover for accidental death up to Rs 25,000. In a country where more than 45% of the people earn less than Rs 50 a day, how can the government expect that they would be able to spend thousands of rupees for hospital expenses and then get reimbursed?

Most of the poor fall sick due to malnutrition, lack of clean water and sanitation. But capital outlay on water and sanitation has reduced from Rs 20 crore in the last year's budget to a mere Rs 5 crore in the present budget. Instead of ensuring timely accessibility and affordability of basic medicines that can cure most of the diseases of the poor, the present budget seeks to further privatise the already unregulated private healthcare system. The finance minister's policy statement on behalf of General Insurance Corporation is hollow. This marketing of healthcare will further deny the right to healthcare to the poorest sections, while pretending that the GIC health policy would take care of the health rights of the poor and marginalised.

It seems the finance minister is more keen to make India a global 'health destination' to attract foreign health tourists and earn more foreign currency and indifferent to the fact that thousands of poor die of malnutrition and communicable diseases like malaria and TB.

Health and education are state subjects. However, most of the states have a finance crunch and cannot make any meaningful allocation to ensure the right to health and education to the excluded. In such a context, most state governments too follow the budget and policy priorities of the Union government. As it is, the expenditure of the central and state government on health has come down from 1.25% (in 1993-94) to only 0.9% of the GDP in 1999-2000.

Though the fresh allocation of Rs 507 crore to be made under the Antyodaya Anna Yojan is a welcome step, the allocation will hardly cover 25% of the BPL (Below Poverty Line) families. The Balwadi Nutrition programme has witnessed a continuous slashing of grants over the last six years. This year a mere Rs.1 crore has been allocated to the Rastriya Mahila Kosh (RMK). The budget for labour welfare has shown a decrease of Rs 26.95 crore. The budget allocation for ecology and environment too is down from Rs 560.87 crore in 2002-03 to Rs 229.98 crore, marking a decrease of Rs 330.89 crore.

Another important point to be noted is that a substantial chunk of the budget allocation for social development and particularly the welfare of children, women and environment depends on international aid and soft loans. In the year 2001-02, of the total budget of Rs 646.10 crore for communicable diseases, Rs 506.4 crore came from foreign aid. In the same year, of Rs 210 crore for HIV eradication, the government share was a mere Rs 1.5 crore. Grants and commodity assistance from friendly foreign countries and international bodies have gone up from Rs 859.09 crore in 2002-2003 to a substantial Rs 1461.03 crore in the current year, with a whopping increase of Rs 601.4 crore. External loans from multilateral and bilateral agencies have increased from Rs 11,333.82 crore in 2002-03 to Rs 13,202.40 crore.

Every year the Revised Estimates of social sector expenditure are consistently less than the Budget Estimates. There is also a gap between the projected revenue and real revenue. As a result the deficit is often more than the stated deficit during the budget presentation. This trend, coupled with the exuberance of public policy promised without adequate budgetary commitment, raises serious questions about the integrity of the budget. In the absence of adequate budgetary allocations and careful spending to fulfil policy priorities, mere policy rhetoric leads to policy mirages. Policy mirages are the tactic used by new policymakers to provide false and distant hopes, without any sincere attempt towards a financial allocation. That is why the Right to Education guaranteed by the amendment to Article 21 of the Constitution looks more like a policy mirage. That is why Jaswant Singh's budget is one more exercise in the art of delusion.

InfoChange News & Features, March 2003