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October 20, 1999


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E-Mail this column to a friend Arvind Lavakare

Our poor are ignored: true or false?

Amartya Sen proffered the advice from his Nobel podium a year ago: the government of India, he told Vajpayee, must spend more on education, on health care --- therein lies the nation's real security, he said. In the recent elections, voters abused politicians for not attending to roads and water supply. The media experts added lack of electricity in villages and schools as another activity on which the government in Delhi had failed, failed miserably. Now, economists of various hues are singing the same tune, pinpointing the urgency of basic development in preference to nuclear development. And everybody, of course, talks of housing for the poor, of poverty alleviation.

Just how justified is this chorus of criticism? Has the government of India really been niggardly in its attitude towards the poor of the land? Has it been negligent and miserly in allocating finances for water supply, rural houses et al? A look at some official figures, and their facets, should help understand the position in its correct perspective.

The first fact to note is that New Delhi's annual budgets do in fact provide for all of the above. The media, out of sheer habit, highlights the taxes and the import duties, the exemptions and the excise rates. It is a skin-deep attitude which shuts out the public from the very absorbing figures and facets printed in the two major documents that form part of the complete set of Budget papers.

One of these two documents is Volume 2 of the Government of India's Expenditure Budget for the year. This document sets out the allocation of funds towards each and every component of each and every ministry - from agriculture and textiles to atomic energy and space; the expenditure on the President's office too is included. Thus, the budget provision for the department of education under the Human Resource Development ministry has 57 heads for which budgetary allocations are made; the department of health has 49 such heads. Against each of these heads of each ministry, resource allocation figures are shown for the previous year's budget, the revised figures for that year and the provision in the current year's budget.

The second document is called Expenditure Budget, Volume I. It gives various statements on the non-Plan expenditure and Plan outlay for the year; more importantly, it tabulates actual expenditure incurred by each ministry/department two years prior to the year for which the budget is being presented. Thus, this Volume 1 for year 1999-2000 showed the actual expenditure in 1997-98.

It is the juxtaposition of the relevant figures of Volume 1 and Volume 2 which tells a story that has all along been missed out by the one night stand comments on every budget night, and for a week thereafter.

Take the actual expenditures in 1997-98 -- the latest available -- appearing in Volume 1 for 1999-2000, and compare them with the revised budget estimates for 1997-98 available in Volume 2 of 1998-99.

Restricting the comparison to eight subjects on which serious concern and strident criticism has been bandied by everyone from Amartya Sen downwards, the following is the picture that emerges.

 Revised Budget versus Actual Expenditure


of Some Poor Man's Ministries


(Amounts in billion rupees)


Revised Budget

Actual Expenditure

Shortfall (-) Excess (+)

  1. Urban Affairs and Employment

(including poverty alleviation schemes)




2. Department of Health




3. Department of Family Welfare




4. Ministry of Welfare*

(Targeted at Scheduled Castes/Tribes & OBCs)




5. Department of Education




6. Ministry of Power




7. Rural Employment and Poverty Alleviation




8. Rural Development




* Renamed by the Vajpayee government as the ministry of social justice and empowerment

The above table reveals that, in 1997-98, it was not a question of the allocation being inadequate for the ''poor man's'' ministries, the exceptions being the two portfolios under the ministry of rural areas. Here too, the actual expenditure was considerably lesser than the original budget provision before it was revised downwards. Thus, the allocation for rural employment and poverty alleviation was Rs 68.07 billion when the finance minister presented the budget for 1997-98 to the nation; similarly, the original provision for rural development was Rs 22.16 billion. Both these items together were reduced by a little over seven billion rupees in the revised 1997-98 budget. The government's explanation of this - to be found in Expenditure Budget Volume 1 of 1998-99 - was ''the lesser requirement of funds,'' thereby implying that the original budget requirement were over-estimated.

Clearly, then, it doesn't make much sense for Amartya Sen to merely plead for more funds for education or health care or poverty alleviation. What is much more essential is to examine whether the existing plethora of schemes under a budgetary head need to be re-packaged suitably and whether the existing delivery systems need to be revamped.

In attempting to do that, a major hurdle in government statistics on actual expenditure is that they provide only aggregate figures for the ministry or a department and not the break up for each of the many schemes under the budgetary head. For instance, though there are 57 schemes/items for which a budget provision has been made under the department of education, the figures of actual expenditure on each of these 57 items are not made public. This is a big lacuna of the government's budget statistics; it needs to be corrected immediately for a more informed review and analysis.

A most glaring example of this is found in the rural development department that falls under the ministry of rural areas and employment. Of the revised 1997-98 budget of Rs 20.12 billion, as much as Rs 13.03 billion (65 per cent) was for ''accelerated rural water supply scheme'' and another billion rupees was for ''rural sanitation.'' Besides, Rs 4.90 billion were designated for poor households to be covered by the National Social Assistance Programme comprising three components:

1. Old-age pension scheme (Rs 75 a month);

2. Family Benefit Scheme (Rs 5000 to Rs 10,000 for natural/accidental death of the family bread earner) and

3. Maternity Benefit Scheme (Rs 300 per pregnancy up to two live births). In all, ten schemes under the department but the data on actual expenditure is only a consolidated figure, leaving one totally in the dark about the progress or otherwise of each of those ten.

Similarly, though there are 13 different schemes under the department of rural employment and poverty alleviation aggregating Rs 63.07 billion as the revised budget of 1997-98, the figure of actual expenditure published by the government is a consolidated sum, not scheme-wise.

Another major drawback of the published figures on the government's vital schemes -- affecting the lives of millions living in rural areas -- is that they do not reveal the respective progress in each of the 25 states, six Union Territories and the National Capital Territory of Delhi that constitute the geography of our country. This is of supreme importance to know because many of the schemes affecting the poor are contingent on cost sharing by state governments as well as on the effectiveness of the state administrative machinery's delivery system.

Just two examples would suffice to highlight the role each state government is expected to play in utilising the government of India's budget provision for rural development. Provision of safe drinking water supply, drains and latrines is dependent on the expenses being shared by the central and state governments in a prescribed ratio. If the state government does not shell out a rupee for such schemes or is lethargic in pursuing these schemes, Delhi cannot do anything about it.

The second instance concerns the implementation of a mass road transportation system for Delhi. The first phase of this project will cover 55.30 kilometres of both underground and surface rail corridors and is estimated to cost Rs 42.82 billion. The cost is to be shared by the central government and the government of the National Capital Territory of Delhi. Unless the latter is able to raise resources of its own to match the Centre's the country's capital will continue to suffer the utter chaos of autorickshaws, killer buses and reckless drivers of BMW cars.

To all of the above Plan schemes must be added the following non-Plan subsidies:

* Rice and wheat supplied to those below the poverty line at issue prices much lower than the economic cost of procurement, storage, transport and distribution.

* Sugar supplied through the targeted public distribution system at prices lower than the ex-factory cost plus transportation and margins.

* Indigenous urea supplied to farmers at rates lesser than what the government pays to the manufacturers.

The conclusion appears to be clear enough: the Union of India is not callous to the needs of the rural and urban poor as Nobel laureates, media upstarts and voters have made out to be. If the whole act has not come through as well and as fast as one would have liked, there are other sins of omission and commission lying undetected. And the people themselves must share the blame: they have proliferated far too much by ignoring prophylactics. But who is to bell that cat? Remember, ours is an utterly, butterly democratic society which, moreover, is sworn to that kind of secularism where a uniform civil code is deemed a blasphemy but where a hundred million rupees in 1999-2000 for modernisation of the Muslim's madarasa education is deemed a legit claim on the Union Budget.

Arvind Lavakare

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