Shortage of Funds in Critical Areas

While the finance minister took care to express the commitment of his government to poor and vulnerable people while presenting the Union Budget for 2016–17, this stated commitment has not been backed by adequate increases in allocations to areas of critical interest to the poor. It is likely that resource constraints will continue to be a serious hindrance in important areas like nutrition, health and livelihood support.

While the finance minister took care to express the commitment of his government to poor and vulnerable people while presenting the Union Budget for 2016–17, this stated commitment has not been backed by adequate increases in allocations to areas of critical interest to the poor. It is likely that resource constraints will continue to be a serious hindrance in important areas like nutrition, health and livelihood support. This reality becomes clearer if we do not just look at the budget figures in an isolated way but also keep in mind other relevant factors such as the cutbacks made earlier.

The widespread drought situation demanded a big increase in funds for the Mahatma Gandhi National Rural Employment Guarantee Act as well as additional drought relief works. But that has not happened. The much-publicised increase in the allocation of funds for the Department of Agriculture is substantially (though not entirely) related to accounting changes as certain allocations earlier listed under the Ministry of Finance are now listed under the Ministry of Agriculture. In a drought year, allocations for drinking water are of critical importance. In 2012–13, the actual expenditure on the National Rural Drinking Water Programme (NRDWP) was Rs 10,490 crore. This came down to Rs 9,190 crore during 2014–15. The budget for 2015–16 had a drastic decrease in the allocation for NRDWP. The allocation was reduced to just Rs 2,503 crore on the controversial plea that the drastic cut would be made up by state governments using the additional resources transferred to them under the proposals of the Fourteenth Finance Commission. However, it appears that the government realised the folly of such a cut in such a critical area as is evident from the fact that in the revised estimate for 2015–16 the allocation was raised to Rs 4,373 crore. The allocation in the budget for 2016–17 is only marginally higher at Rs 5,000 crore. It is important to emphasise that this is substantially less than the actual expenditure in 2012–13 on NRDWP.