Union Budget 2023-24: Poor need more focused attention

The Union Budget 2023 has given significant relief to the middle classes; however, India’s vast majorities of working people in rural areas and the cities need more focused attention. We may have come out of the COVID-19 pandemic, but the precarity of employment continues. The Periodic Labour Force Survey (PLFS) and other data indicate high levels of unemployment, particularly among youth, continued precarity and constrained household consumption.

With high inflation levels, food support could have significantly relieved most Indian households. However, the allocation to food subsidy has seen a major decrease from Rs 2.87 lakh crore in the revised estimate of 2022-23 to 1.97 lakh crore in this year’s Budget. The withdrawal of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), and its provision of an extra five kilograms of free food grains to every ration card holder in addition to the entitlement under the National Food Security Act, would put an additional burden on poorer households.

Peasants and informal workers were hoping for dignified social security after the registration under e-Shram. However these hopes are denied due to stagnating outlays under the National Social Assistance Programme and Ayushman Bharat and the reduction of allocation for Social Security of Workers from Rs 15,845 crore in the last Budget to Rs 12,434 crore in this budget. India must close the global gap regarding its social protection expenditure as a percentage of its Gross Domestic Product (GDP0.

India spent only 1.4 per cent of its GDP vis-a-vis the global figure of 13 per cent in 2020. Only 24.4% of India’s population is covered by at least one social security scheme (excluding healthcare), and 55% are covered under universal health coverage. In such a situation, a higher allocation on social security was expected.

Investing in agri-tech infrastructure and digitising Primary Agricultural Credit Societies (PACS) are welcome steps that make this budget innovative and creative. Agriculture remains to be the largest employer at 46.5% of the workforce and has increased marginally from 2019-20 to 2020-21.

Expectations were high for assistance under PM Kisan Samman Nidhi to be increased to Rs 8,000 per year; instead, the budget outlays for the scheme have been further reduced. In times of rising extreme weather events and climate change, price support, fertiliser subsidies and crop insurance act as safety valves for India’s farmers and agricultural workers. However, this budget has reduced allocations to the PM Fasal Bima Yojana, schemes for minimum support price for crop procurement and the fertiliser subsidies being provided.

We welcome the renewed impetus for the development of Particularly Vulnerable Tribal Groups (PVTGs). Allocation of Rs 15,000 crore for developing basic facilities like safe housing, clean drinking water, and improved access to education and health of PVTGs communities is a welcome step to address the needs and futures of PVTGs.

However, what is missed is the longstanding demand for a similar budgetary allocation enhancement for members of semi-nomadic tribes (SNT), nomadic tribes (NT), pastoral and de-notified tribes (DNT), comprising 13% of the population, who have historically been at the end of stigmatisation, ostracism and discrimination. The allocation of 40 crores to the Scheme for Economic Empowerment of DNT/NT/SNTs (SEED) is highly insufficient.

The Honourable Finance Minister's announcement to support poor prisoners who cannot afford bail amount or penalty is welcome. We hope such support will also be provided to the majority of the undertrials, who are from poor and discriminated communities.

However, the longstanding demand is to expand the public procurement of millet under the National Food Security Act above the current rate of 1%. In that spirit, this could have been incentivised by providing price support to cultivators through the ecological valuation of climate-resilient agriculture.

In this regard, what is missed is the compensation for the impact that frontline communities such as farmers, pastoralists, fishworkers and urban informal workers are facing on climate change. India suffered the second highest loss due to extreme climate events in 2021, racking up nearly $7.6 billion in damages due to flooding and storms, according to the latest report- The State of Climate in Asia 2021, by the World Meteorological Organization and the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

Moreover, a World Bank report suggests that by 2030, India may account for 34 million of the projected 80 million global job losses from heat stress-associated productivity decline. In such a situation, budgetary allocation for a national loss and damage financing facility would have been a game changer.

The latest National Family Health Survey (NFHS-5) statistics still mark stunting at 35.5%, wasting at 19.3% and underweight prevalence at 32.1% for children below five years, so expectations for more significant allocations were high. It is also worrying that allotment to education empowerment for minorities has reduced significantly from Rs 2,515 crores in the last budget to Rs 1,689 crores in this one.

The announcement for focusing on eradicating sickle cell anaemia, which plagues the large population of India’s indigenous communities, is a step in the right direction. However, according to the Union Ministry of Health & Family Welfare’s Rural Health Statistics 2021-2022, India’s rural healthcare system continues to be plagued by a shortfall on two critical fronts – doctors and infrastructure. While the increase in health expenditure between 2019 and 2023 from 1.4% to 2.1% of GDP and higher allocation for digital health mission is another forward-looking step, expectations were high for more expenditure on the National Health Mission and health infrastructure development.

In sum, while the Budget has prioritised inclusive development, as the Honourable Finance Minister mentioned in her budget speech, the financial outlay for ensuring it does not show the zeal as hoped. The Finance Minister has announced that Rs. 35,000 crore revenue would be forgone due to a reduction in personal income taxes, and while a relief to the middle classes is welcome, fiscal prudence is not enough to expand public employment, social security, welfare, education and health expenditures considerably. The need of the hour is to raise revenues through the reduction of revenues forgone and innovative mechanisms such as wealth tax on super accumulation of wealth.

About Action Aid 

ActionAid India’s work with these communities is strongly focused on women and children. It was established with a vision to create a world without poverty, patriarchy and injustice in which every person enjoys the right to life with dignity.