Interim Union Budget 2019: Few Observations

The acting Finance Minister Piyush Goyal on Feb 1, 2019, presented the Interim Union Budget 2019-20. Interim budgets are generally used by governments to show a trailer to voters of what the party in power could do if it is re-elected to power. Expectedly, the pronouncements were in line with the neo-liberal philosophy of development that further marginalizes the already marginalized to benefit corporations. Though unjust, this is only natural in the current structure because the corporations who fund the election campaigns of the parliamentary parties do so to ensure that when in power, systems and structures are created to further their profit motive, even if that happens at the cost of the most marginalized. The scope of this article shall be limited to explore only some of the pronouncements in the budget to understand the budget better.

India has had a long history of allocating less on healthcare – this time was no different. At 0.31% of GDP, it is lower than what it was a decade before in 2009-2010 [1]. The total public (Centre and state governments) health expenditure has remained constant at 1.3% between 2008 and 2015 [2], and increased marginally to 1.4% in 2016-17 [3] which is not only less than the world average of 6% but also lower than many sub-Saharan African countries. Keeping in mind that the National Health Policy, 2017 proposes to increase this to 2.5% of GDP by 2025 [4], the allocation for healthcare in this interim budget is a slap on the face of the sick millions in this country. Even for the measly allocation, there has been an exorbitant 167% increase in the insurance based Ayushman Bharat scheme which incentivizes private investment in secondary and tertiary care wherein the patient requires hospitalization [1]. There are sufficient studies to suggest [5] that insurance based models are not appropriate in the Indian context and they result in increasing out-of-pocket expenditures considerably thereby pushing more families below the poverty line; rather strengthening the public healthcare system is necessary. But in this budget, the government has reduced capital expenditure in healthcare by 43% compared to the actual spending in 2017-2018. The continued efforts by governments to privatize healthcare at the cost of the marginalized was captured very aptly in the tweet of Dr. Indu Bhushan, the chief of Ayushman Bharat – ‘We are offering you business of 50 crore people!’ (aimed at private hospitals). Healthcare is moving away as a responsibility of the state to a business venture for the private sector at the cost of the poorest.

One of the most talked about pronouncements in this budget was that of Pradhan Mantri Kisan Samman Nidhi. Under this program, each farming household owning less than 2 hectares of land shall receive INR 6000 in a year as income – this translates to INR 3.29 per person per day for a 5-member household, which is a pittance if compared to the distress that the agrarian society is going through. No mention has been made of the approximately 10 crore landless farmers that exists in this country. Instead of building agricultural infrastructure and freeing it from the shackles of neo-liberal onslaught, there seems to be an emerging consensus on providing a minimum income guarantee across many parliamentary parties. This should be seen in the context of the structural failure of the economy to create employment and thereby sufficient income for all. The leaked report of National Sample Survey Office’s (NSSO’s) Periodic Labor Force Survey (PLFS) states that unemployment is at an all-time high in the last 45 years [6]. Parliamentary parties have realized that to keep the system running it is important to provide the poor some support without which the lid may blow off. Hence they are resorting to providing a safety valve in the form of income guarantee.

Another big ticket announcement in the Interim Budget has been Pradhan Mantri Shram-Yogi Maandhan – a voluntary pension scheme for unorganized workers. The scheme assures a monthly pension of Rs 3,000 after workers attain the age of 60. A monthly contribution of Rs 100 for those who join the scheme at the age of 29 and Rs 55 for those joining at 18 will be matched by the government and the total sum added to their pension account. This seems to be a variation of the Atal Pension Yojana launched by NDA in 2015 which has failed miserably till now [7]. No clarity has been provided on what is the minimum period of contribution to receive the pension; nor has anything been mentioned regarding what happens if there is break in contribution to the pension fund – a situation which is extremely likely for workers in the unorganized sector considering unavailability of regular employment. It must also be borne in mind that though pension for the middle classes starting at the age of 60 makes sense, for unorganized sector poor workers, most of whom work in extremely hazardous conditions, it is meaningless. After working lifelong in construction sites, quarries, factories, etc. doing manual labor, the life expectancy goes down significantly below the national average of 68.8 years as studies have shown [8]. This would result in the pension fund accumulating huge sums of money like that of Employees Provident Fund Organization [9] which would provide easy capital to corporates in the equity markets. This hard earned money would eventually be unclaimed by the workers but would be a win-win situation for corporations through the back door.

An area worth mentioning in this budget is the allocation for defense. At INR 282,733 crore, it is 4.8 times the health allocation. This level of obscenity continues to be carried out without strong condemnation from all because successive governments have been able to convince a large section of this country’s population of the bogey of internal and external threats. Under the current government it has reached an all-time high with many among the general public inviting full-fledged war with Pakistan in view of recent developments. No wonder that the arms lobby, often operating through their respective country President or Prime Minister, is happy, as the Indian government’s fat defense purse and the atmosphere created in India for the need to buy more arms and equipment are conducive for their profits.

Union budgets institutionalize the plunder of the poorest to make the richest richer. Care is taken to ensure the consumption cycle is maintained – or else how would the richest get richer? This year too, the same could be witnessed overall. Apart from wooing the middle class voter with benefits, the vast majority of this country’s population was further pushed to the margins.

References

[1] https://www.epw.in/journal/2019/6/letters/health-interim-budget.html

[2] https://www.indiabudget.gov.in/budget2016-2017/es2014-15/echapter-vol1.pdf

[3] https://www.indiabudget.gov.in/es2016-17/echapter.pdf

[4] http://cdsco.nic.in/writereaddata/national-health-policy.pdf

[5] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5408909/

[6] https://www.business-standard.com/article/economy-policy/unemployment-rate-at-five-decade-high-of-6-1-in-2017-18-nsso-survey-119013100053_1.html

[7] https://indianexpress.com/article/business/business-others/atal-pension-yojana-guaranteed-monthly-pension-scheme-fails-to-meet-target-2950487/

[8] http://iipsindia.org/pdf/RB-13%20file%20for%20uploading.pdf

[9] https://thewire.in/labour/budget-2019-pension-scheme-unorganised-workers-mirage

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