Show commitment to equity in the Budget

Khammam, Telangana, 08/05/2019: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers return home after completion of work at Chirrumarri village in Khammam district on May 08, 2019. Photo: G.N.Rao/ The Hindu

Khammam, Telangana, 08/05/2019: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers return home after completion of work at Chirrumarri village in Khammam district on May 08, 2019. Photo: G.N.Rao/ The Hindu

On January 17, 2022, Oxfam International presented its annual global “Inequality Report”. Titled Inequality Kills , the report calculated and presented the quantum growth in wealth of a minuscule few, and the simultaneous impoverishment of millions of working people. During the novel coronavirus pandemic, the report reveals, more than half the world’s new poor are from India; 84% Indian households have suffered a loss of income, with 4.6 crore people falling into extreme poverty. In this period, the richest 142 people have more than doubled their wealth to more than ₹53 lakh-crore. This is clearly happening by design, and can only be corrected if our policymakers reverse their framework of paying lip service to the poor while making policies that support the rich. One of the most important places to show commitment to equity, is the Union Budget; and inequality should perhaps be discussed threadbare in India before, and after every Union and State Budget.

This is the guiding light

There is also a constitutional mandate to reduce inequality. In India today, some of the most basic human rights that allow people to stay alive are under threat. It is the sacred responsibility of the Government to follow the Constitution, and ensure delivery of these rights. The policymaking “duty” of all governments is to follow Part IV of the Constitution — the Directive Principles of State Policy. The Budget is one of the most important annual exercises in state policy, and it is the Directive Principles that should be a guiding light. In terms of inequality, Articles 38 and 39 mandate a policy path. Among other important principles, Article 38(1) states: “The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.” Article 39 (c) states: The State shall, in particular, direct its policy towards securing — (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.


‘Duties’ talk

A rights-based policy framework, should, therefore, be followed by the Indian state to protect the poor and the marginalised. But the Prime Minister advocates that people concentrate on their duties and stop demanding their rights. On January 20, 2022, at the launch of the Brahma Kumaris’ year-long programme of events (as part of the Government’s celebration of 75 years of Independence) the Prime Minister declared, “In the last 75 years, we only kept talking about rights, fighting for rights and wasting our time. The talk of rights, to some extent, for some time, may be right in particular circumstances, but forgetting one’s duties completely has played a huge role in keeping India weak.” Ironically, the Prime Minister did not seem to be referring to his own duties.

In a country like India, reducing inequality should be a high priority. Today, this principle is being inverted. The Oxfam report does not exclusively examine the multiplying wealth of India’s billionaires. Let us look outside this 0.00001% of our population, and for the purposes of the Budget, look at their analysis of basic social services — particularly those that affect the survival of the poor.

India must be one of the only countries in the world where during the COVID-19 pandemic the health Budget has declined — and that too by a huge 10% in the last year. Social security expenditure has declined from an already pathetically low 1.5% in 2020-21 to 0.6% of the Union Budget in 2022. It is at this end of Budget allocations where people are deprived of the most basic services and entitlements and are unable to survive. Social security pensions, for the elderly, for the disabled, and widows have been frozen at ₹200-₹300 a month for almost 15 years. The Government says there is not enough money to even index these to inflation. In contrast, policymakers have just in the last year increased their own salaries and pensions through a DA increase to 28%, and given themselves a bonus of 3% — with just the increase for one crore central government employees and pensioners costing the exchequer more than the total social security pension budget for 3.3 crore beneficiaries.


The Prime Minister’s outburst against “rights” perhaps explains his lack of support for the implementation of rights-based laws. Nevertheless, during the pandemic, even his government had to turn to the National Food Security Act (NFSA) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to save millions of Indians from hunger and premature death. After increasing allocations in the first phase of the pandemic, allocations were frozen, and budgets were slashed in Budget 2021-22. The Government said it will supplement as and when needed. However, it is clear that supplements come in an extremely miserly fashion, causing extensive distress, and in MGNREGA, undermining the legal guarantee of work on demand.

During a recent 18-day “Accountability Yatra” in the State of Rajasthan, we came across thousands of cases of needy people not receiving ₹2 per kilo wheat. The answer to grievances and appeals filed in writing is that the portal is closed and no more entries allowed. The priority list of households under the NFSA has been frozen in absolute numbers, based on a percentage determined from the 2011 Census. In the last 11 years, population increases amounting to approximately 10 crore eligible beneficiaries have been kept out. Therefore, approximately 12% legally entitled people — even children of existing “priority households” — cannot get subsidised foodgrain. To use digital codes to block even the appellate process mandated by law is a live example of callous multi-dimensional inequality, demonstrating why the “Inequality Kills” title of the Oxfam report is poignant and true.

Children and education

The pandemic has also produced a generation of children who have forgotten what formal education is. Many teenagers from poor households have already joined the workforce. In this period, there has been a 6% cut in the education Budget. Relying on online teaching, accompanied by Budget cuts, amounts to the institutionalisation of endemic multidimensional poverty.


The list can go on and on. As we await Union Budget 2022-23, will this trend be reversed? There will be much talk among affluent analysts cautioning against social sector expenditure, calling them “welfare and doles”. Programmes such as the food security Act will not receive the quantum of allocations needed, even though food grain stocks are more than 90 million tons. The People’s Action for Employment Guarantee (PAEG) has estimated that approximately ₹2,64,000 crore will be needed to guarantee 100 days work for currently active job cards. Even half that amount is unlikely to be allocated for MGNREGA. Social security pensioners will continue to face hunger, insult, sickness and death. One would expect that if nothing else, their millions of votes in crucial State elections would fetch these families some basic rights. But, in polarised elections, the basic needs of unorganised and voiceless people are easily ignored.

Time to generate data

Policymakers will tell us that resources are scarce. Oxfam says the combined wealth of India’s 142 billionaires has increased by a massive ₹30 lakh-crore, in just the pandemic period. Jan Sarokar, a network of more than 30 social sector movements, has suggested that a 2% wealth tax, and a 33% inheritance tax on the top 1% of our population will fetch an estimated ₹11 lakh crore per annum, to support basic social sector entitlements. Suggestions such as this are already being ridiculed by market fundamentalists. Which way will the Government go?


The Bharatiya Janata Party’s response to most international reports has been to claim flawed methodology and analysis. It is time to introspect, generate robust data, and face the truth. The Budget is a policy that matters to all. There is, unfortunately, little hope that this Government will stop this avalanching slide into a grossly divided society. It is perhaps up to society to stand up and make sure that we are true to our constitutional commitment of building a more just and equal society. That is our most fundamental duty.

Nikhil Dey and Aruna Roy are social activists with the Mazdoor Kisan Shakti Sangathan (MKSS). The views expressed are personal

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Printable version | Aug 16, 2022 9:50:46 pm | https://www.thehindu.com/opinion/lead/show-commitment-to-equity-in-the-budget/article38350737.ece