India Budget facing backlash over deep cuts to flagship social security programmes

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IIndia’s federal budget has drawn sharp criticism from opposition parties and civil society groups for slashing spending on key social protection programs that feed and employ the poor, as the country grapples with rising inequality.

Finance Minister Nirmala Sitharaman The Prime Minister’s last full budget was presented on Wednesday Narendra ModiA second term ahead of general elections next year, total spending has been set at 45 trillion rupees (£454bn).

With this expenditure 7.5 per cent higher than the current fiscal, the government aims to boost economic growth and reduce the fiscal deficit to 5.9 per cent of GDP as compared to 6.4 per cent this year.

The deficit plan will be aided by a significant drop in funding allocated to the key federal food security policy that feeds 800 million people in the country.

It’s not the only social security program facing sharp budget cuts. Spending would also be cut in the Rural Employment Guarantee Program, which provides a minimum of 100 days of employment to more than 150 million Indians.

The budget for food subsidy provided through a targeted public distribution system will drop by 32 per cent as the government plans to reduce spending to Rs 1.97 trillion from an estimated Rs 2.87 trillion this year in the new financial year beginning April 1. have proposed.

Workers push a cart carrying sealed spice bags in Kolkata


The budget of the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) has been cut by 30 percent. The finance minister has proposed reducing funding from Rs 8.95 trillion to Rs 6 trillion – the lowest in more than five years.

While Modi’s ruling Bharatiya Janata Party (BJP) hailed the budget as a significant step towards all-inclusive development, activists and opposition leaders said it failed to address the needs of the poor and rising unemployment in the country.

Social activist Nikhil Dey says, “This is a pathetic budget in terms of equitable development.” has increased.” Independent,

“We have the largest number of poor in the world and the largest number of poor have been added to our ranks,” he says in reference to the effects of Covid. “The policy measures that helped the segment at the bottom during the Covid-19 pandemic are MGNREGA and food subsidy.”

A worker carries a sack of garlic as he crosses a street


Despite being already underfunded, the program played a key role in offsetting income losses during the pandemic, averaging up to 80 percent in some areas, according to the activist group People’s Action for Employment Guarantee (PAEG).

But there were still many gaps, the group said, with survey results indicating that 39 per cent of eligible households did not get a day’s work under the scheme, highlighting the need for higher budget allocations.

Congress spokesperson Pawan Khera says the rural employment program is being “squeezed from all sides”. “According to [MGNREGA]There is a guarantee of work for 100 days, but in the Modi government, people are getting work for only 42 days on an average. And even if they get that job, the outstanding salaries to the states are not being paid on time.

This budget is not for the poor, it is a document to make the rich richer.

There has been global concern about rising inequality in India, as highlighted by Oxfam its report last month, It found that India’s top 1 per cent owned more than 40.5 per cent of the country’s total wealth in 2021, while the poorest were “unable to even afford basic necessities for survival”.

It found that the poor and middle class were taxed more than the rich, with about 64 percent of the total Goods and Services Tax collected from the bottom 50 percent of earners, while only 4 percent came from the top 10 percent. Was.

The group said it advocated progressive tax measures such as a wealth tax, adding that a wealth tax of 2 percent on the country’s billionaires would support the nutritional needs of the malnourished population for the next three years.

Despite a significant cut in its funding, the government’s food distribution plan was lauded by the finance minister during Wednesday’s budget.

“During the Covid-19 pandemic, we ensured that no one sleeps hungry with a plan to supply free food grains to over 80 crore (800 million) people for 28 months,” Sitharaman said.

Sitharaman said that the name of a scheme is Pradhan Mantri Garib Kalyan Anna Yojana Providing free food grains to the poorest households is being implemented from January 1 at a cost of Rs 2 billion, “in continuation of our commitment to provide food and nutritional security”.

But activists said the plan actually existed as a pandemic-era measure to double the amount of food aid already given to low-income families. Economist Jean Dreze says the program benefited poor families who were already entitled to 5 kg of food grains under the National Food Security Act of 2013, but was actually discontinued in December and reintroduced Has not been started.

“As a result, since January, they were getting only 5 kg of ration under the separate National Food Security Programme, whereas for the last 28 months they were getting a total of 10 kg,” he says.

A daily wage laborer goes to his regular job in New Delhi


“And what’s most troubling is that [the government] pretending like it’s still on Pradhan Mantri Garib Kalyan YojanaDey says. “But the truth is that they stopped it this year at a time when the prices in the wheat market have reached Rs 40 per kg. So you are killing people to a level where even their food security is going to be threatened.

“Frankly the truth is that they are trying to fool everyone. People who are going to get less ration cannot be fooled when they come to know that it will be increased from 10 kg to 5 kg. It is going to be halved. But others will feel that the government is doing something for the poor.”

Independent TechCrunch has reached out to the BJP for comment on this apparent discrepancy as well as other issues raised by activists and opposition parties, but had not received a response by the time of publication.

Another measure that has drawn concern from civil society groups is non-revision of pension schemes. With India’s inflation rate averaging 6 per cent over the past decade, this means pensioners have suffered a substantial real loss over that period. “The central government’s contribution to the old age pension has remained stagnant at Rs 200 per month since 2006,” says Dey. “What can a person do with it?

“So while this budget has given some special concessions to the middle class, a large number of the working poor, we are pushing them further towards poverty and destitution.”