16th August 2024 (9 Topics)
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An obstinate refusal to focus on welfare
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Context
The recent Union Budget has been criticized for its inadequate allocation to key welfare schemes and social support programs. Despite high levels of poverty and malnutrition, budgetary provisions for welfare have been reduced, drawing sharp criticism from various quarters.
Budget Allocations and Welfare Schemes
- Underfunding of Major Schemes: The budget for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act (NFSA) has decreased as a share of GDP since 2014-15. MGNREGA allocation is down to 0.26% of GDP, and NFSA expenditure has fallen to 0.63% of GDP.
- Ignoring Vulnerable Groups: Allocation for this program remains unchanged in nominal terms, while its share of GDP has halved since 2014-15. Support for widows, the elderly, and disabled individuals has stagnated despite increasing needs.
- Decline in Nutrition Schemes: Budget for Saksham Anganwadi and Poshan 2.0 has dropped to 0.06% of GDP from 0.13% in 2014-15. Similarly, funding for the mid-day meal (MDM) program has halved, impacting the nutritional and educational outcomes for schoolchildren.
Fiscal Policies and Health
- Overall Welfare Expenditure Decline: Central expenditure on welfare schemes has decreased from 2.1% of GDP in 2014-15 to 1.53% this year. This reduction contrasts with the higher allocations during the COVID-19 pandemic.
- Corporate Tax Cuts vs. Welfare: The government’s decision to cut corporate tax rates has led to a loss of over ?8 lakh crore in tax revenue, affecting the fiscal space available for welfare programs.
- Health Budget Increase: The budget for health has seen a marginal increase, from 0.25% of GDP in 2014-15 to 0.28% this year. However, this increase is considered insufficient given the high out-of-pocket health expenses and related poverty issues.
Mains Question
Q. Critically evaluate the impact of recent Union Budget allocations on social welfare schemes in India, particularly focusing on MGNREGA, NFSA, and nutrition programs.
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