Introduction

The Union Budget of India has faced significant criticism for its lack of focus on welfare schemes, particularly in the context of ongoing economic challenges and the high level of poverty in the country.

This analysis explores the reduced allocations for key welfare programs, scrutinizes the implications of these reductions, and contrasts the current approach with the previous administration’s record.

1. Decline in Welfare Allocations

• The current Union Budget reveals a concerning trend in the reduction of allocations for crucial welfare schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act (NFSA).
• The budget for MGNREGA has decreased from 0.29% of GDP in the previous year to 0.26% this year. Similarly, the allocation for NFSA, which provides essential food subsidies, has dropped from 0.72% to 0.63% of GDP.
• This reduction in funding is particularly striking given the high levels of poverty and food insecurity in India.

2. Impact on Vulnerable Groups

• The National Social Assistance Programme, which supports widows, the elderly, and the disabled, has also seen stagnant funding.
• Its allocation remains at ₹200 per month for the elderly and ₹300 for widows, amounts that have not changed since 2006.
• This lack of adjustment in nominal terms, despite rising costs of living, severely impacts these vulnerable groups, leaving them well below the poverty line.

3. Nutrition and Education

• Funding for nutrition and education programs has similarly been reduced. The Saksham Anganwadi and Poshan 2.0 schemes, designed to address child malnutrition, have seen their budgets cut from 0.13% to 0.06% of GDP.
• The mid-day meal (MDM) program, which benefits approximately 12 crore children, has also experienced a halving of its budget allocation since 2014-15.
• Additionally, the share of GDP allocated to primary and secondary education has decreased from 0.37% in 2014-15 to 0.22% this year.

4. Health Sector Allocation

• A marginal increase has been observed in the health sector budget, rising from 0.25% to 0.28% of GDP.
• However, this increase is insufficient in addressing the high out-of-pocket health expenses faced by millions, which continues to push many into poverty.

5. Fiscal Context and Implications

• The reduction in welfare spending contrasts with the substantial tax cuts implemented since 2019, which have reportedly resulted in a foregone tax revenue of over ₹18 lakh crore.
• This shift in fiscal priorities has raised concerns about the disproportionate impact on the poor and vulnerable.
• The current approach has been linked to India’s low Human Development Index (HDI) rank and increasing socio-economic inequality.

6. Comparison with the UPA Era

• In contrast, the United Progressive Alliance (UPA) governments are noted for their progressive increase in welfare allocations and introduction of new schemes.
• This historical comparison highlights the stark differences in priorities between the UPA and the current National Democratic Alliance (NDA) administration.

Conclusion

• The Union Budget 2024 has been criticized for its insufficient focus on welfare and nutrition schemes, reflecting a broader trend of declining support for marginalized groups.
• To achieve the goal of a developed society, the government must reconsider its approach and prioritize welfare spending.
• A shift towards more robust funding for welfare programs could address the pressing needs of the poor and vulnerable, paving the way for a more equitable and dignified society.