Are the targets given in the Budget doable?

The general expectation from the budget was about addressing crisis in agriculture, education, health, infrastructure and jobs. The finance minister also mentioned right in the beginning that the budget aimed at providing “ease of living” to the masses including the poor.

It seems that the budget has covered more or less all these areas, and seems to be positive. There is no doubt that the budget has come out with several new ideas. However, there are a few questions that need clear answers (1)are the targets given in the budget doable? (2) How will these be implemented? And (3) are the funds allocated to different heads enough to meet their implementation?

To start with some of the major targets are clearly not doable.  For example, doubling farm incomes in five years is unlikely to be achieved. The present rate of agricultural growth is around 2% and as Economic Survey has reported, climate change is going to reduce agricultural growth due to climate change impacts. How can we reach 11-12% increase in farmers’ income, when the present agriculture is in crisis?  Even agriculturally prosperous villages the agricultural sector is in crisis: MSP is lower than the cost of cultivation and even revised MSP is less that the cost, for example before the last Gujarat election, the MSP of cotton was raised to Rs 900 per quintal, but the cost increased to Rs 1200 soon. Prices of inputs are rising and the selling prices frequently fall due to gluts. Crop insurance is spread very thinly. Again, covering 500 million people under health care (little less than half the total population in India also does not seem to be doable. Studies have shown that even the present social security programmes need a lot of improvement in its implementation. The reasons are many one of them being Lack of continuous flow of funds to lower levels. How will the government cover one half of the population?

One more porgramme that does not seem to be doable is related to women’s employment. In fact, the gender dimension is badly ignored in the budget.  Now it is well known that one major reason for low workforce participation rate is burden of unpaid work (care of children, disabled, old and chronically sick as well as domestic services); however this is not at all addressed by the budget.  There is no doubt that distribution of LPG gas cylinders at reduced price do poor women helps women.  But not to the poorest women who cannot afford refilling the cylinder. Studies have shown that LPG gas cylinder is welcome when women earn equal or more money. There are many women who do not earn enough or no cash, need cheaper fuel, such as fuels like kerosene and smokeless stoves. Again, women also need universal child care to reduce their burden of work. In fact, professional care to disabled and chronically sick as well as universal child care will go a long way to increase their participation in the labour market and in skill training and education.  Without reducing the burden of unpaid work women should not be given employment. After all, one of the reasons for their widespread malnutrition is over burden of work and time stress arising from their paid and unpaid work.

Many of the new programmes included in the budget also need sound institutional support from old and new institutions. The budget has not addressed this aspect. Uplift of SC/ST population has been a goal frequently repeated by all governments in India in the past. However this population has remained more or less excluded from the gains of development through generations.  It is now realized that SC/ST population is different from the poor in general. The government has not recognized this adequately in the past and in this budget. They need a different strategy.

Finally, as regard jobs, which is an urgent priority of the economy, the government assumes that all beneficiaries of MUDRA scheme are employed which is far from the truth. The rate of mortality of such schemes has been quite substantial.

Also, the sustainability even of short term successes is very low, as they need continuous flow of credit as well as a large size, continuous access to technical and professional services, forward and backward linkages with the regional economy and strong marketing to remain in the market for long. There are positive points of this scheme, but the FM is expecting too much from it. Mere refinancing facility is not adequate, what is needed for support for long term sustainability.

The budget has given good ideas, but not taken care of some critical questions. Unless these questions are addressed, the budget has limited use for the economy! 

(The writer is Director and Professor of Economics at the Centre for Development Alternatives, Ahmedabad)