A budget of ‘haves’
It is woefully inappropriate to have a budget that is centred only around the industry, the large farmers and the ‘middle class’.
It is time now for the Union budget exercise once again. It is one of the major planning activities of the government and probably one of the major publicised governmental events with much media focus. Union budget presents the intended financial allocations for various major activities of the government during the ensuing year.
To that extent it should be an important draft which signals major changes in the government’s relative emphasis on different sectors and activities that the government could influence. Union government’s intentions for the short-term future could be gauged through this financial budget.
India’s budget is presented and perceived as a show that affects the national ‘economy’. Generally, what is implied is the economy in terms of the industry and agriculture, exports and imports, growth in GDP, the modifications – if any -- to the existing tax system, expected tax revenues, government expenditures and shortfalls or deficits.
It is the industry captains and the middle class -- usually the upper layer of the middle -- who view the exercise, and if and when the opinions are considered, it is precisely these groups who matter.
Limited exercise
Union budget is a limited exercise in many ways. It is limited in its time-span, in its viewer base and, therefore, in its aim. It mainly aims to satisfy the eagerness of the industry honchos, the upper crust of the middle class and the agricultural barons, for concerns such as to enhance the industry profits, increase the urban – usually metropolitan -- jobs, and enhance the subsidies respectively.
A ‘wish list’ is generally presented by people who belong to the upper income strata. The discussions, before and after this spectacle, veer around issues like whether the pharma sector gets a boost, or the real estate sector gets a reprieve, or whether the fertilisers get less or more subsidy.
The lower income people are either ignorant of the budget exercise, or have no time left after a hard day of making two ends barely meet. Barring a fleeting reference to a scheme like NREGA, no one is really concerned. Union budget is an upper class exercise and event – an annual hullaballoo that is an exhibition of ‘democracy at work’.
It is no wonder that the real issues before the nation are given a Nelson’s eye. It should not be surprising that in the comity of nations around the world, India ranks 134th in UNDP’s Human Development Index (HDI). HDI is comparative measure of literacy levels, education, standards of living and life expectancy.
Thus, it is a means – a standard means – of measuring the well-being, especially child welfare. The latter is true, because the welfare of the child can only be properly taken care of if there is good availability of education – primary, secondary and higher, good sanitation and effective community health programmes and, of course, the elimination of hunger. In HDI rankings, India is worse off than Morocco, Bhutan and Laos and only two to four ranks better than Republic of the Congo, Cambodia and Myanmar.
In the Education Index, India ranks 142nd amongst 177 nations, with Cameroon and Tanzania for company. If just the adult literacy rate is considered, we rank 147th, immediately after Rwanda and Malawi, with Sudan and Eritrea for close company. Our GDP per capita is,US $ 2783 with a rank of 128 which is bad enough.
Has India improved over the years in terms of HDI performance? In the year 2000 India was at 124th rank, in 2008 it was at 132nd rank and now it is at 134th rank. We need not compare with China as the latter has had significantly better HDI rankings.
The Indian people have heard enough rhetoric about the concerns of the ‘Aam Aadmi’. It is time now, after sixty years of being a people’s republic, that India’s Union budget represents these concerns. It is woefully inadequate and inappropriate to have a budget that is centred only around the economy of the ‘haves’ – of the industry, of the large farmers, of the so-called ‘middle class’.
Economy matters
This economy does matter. But, what is even more urgent is to bring in the concerns of the ‘have-nots’ who seem to have been forgotten in the middle-class euphoria about the ‘economic growth’ at 8 per cent or 9 per cent or whatever.
The very basic individual and community health issues of the large mass of people who are poor, the scope for basic education of the marginalised and the eradication of the pangs of hunger from over 300 million stomachs so that they can think outside of their daily survival, the freeing of the hapless hundreds of million children should form a basic platform for any national level budgeting exercise.
The union budget should be designed, formulated and evaluated on these criteria in addition to the criteria for general growth in GDP. HDI or any other similar index can be the point around which to budget in addition to the CAGR. It is about time that we start budgeting for human development.
(The writer is a former professor, IIM-Bangalore)
