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2nd February 2024 (10 Topics)

The problem of moving attention away from services

Context:   

The perpetuation of inequalities is aggravated by the ongoing neglect of the social sector, especially considering the lack of lucrative employment opportunities and the imminent job crisis.

Poverty and Income

  • Multidimensional Poverty Claims: The Finance Minister asserted that 25 crore people were lifted out of multidimensional poverty (MPI) in the last decade, but MPI's limitations were acknowledged.
  • Misleading Income Growth Claims: The Budget claimed a 50% average real income increase, but it was criticized for not addressing income distribution issues, with evidence suggesting stagnant real wages.
  • Unsettled Employment Scenario: Despite optimistic budget statements, the report highlighted distress in the job market, especially with a rise in agriculture employment and low wages under MGNREGS.

Demand and Allocations for Social Sector

  • MGNREGS Budget Discrepancies:Despite high demand, MGNREGS faces issues, reflected in a higher Revised Estimate (RE) for 2023-24, indicating potential underfunding for the program.
  • Stagnant Social Sector Budgets:The allocations for social sector schemes, including education and health, saw nominal increases, but real-term reductions over the past decade persist, exacerbating inequalities.
  • Neglect of Basic Services:The Budget's focus on high-profile schemes neglects essential services like education and health, contributing to poor infrastructure and perpetuating social inequalities.

 Aspirations vs. Realities

  • Unrealized Economic Well-being: The Budget emphasized improved living and earning conditions, but evidence suggests depressed incomes for the majority, with women's increased participation potentially indicating distress.
  • Divergence in Budget Claims and Ground Reality: The Budget's positive tone clashes with poor growth in private consumption expenditure and the reversal of structural employment changes, pointing towards economic challenges.
  • Inadequate Focus on Social Sectors: Neglecting social sector development exacerbates inequalities, hindering India's true aspiration, especially in the absence of gainful employment opportunities and a looming job crisis.
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