Declining Welfare Allocations: Ignoring India’s Social Fabric

The current year’s Union Budget has received considerable criticism for its decreasing contributions to welfare systems, weakening the relevance of social expenditure in the post-COVID-19 recovery phase. As a percentage of GDP, central allocations for social schemes and sectors protecting basic rights have steadily dropped over time. This worrying trend calls into question the government’s commitment to solving critical issues including child malnutrition, hunger, and education.

Important Welfare Programmes

  • Poshan 2.0 and Saksham Anganwadi: These initiatives aim to combat child malnutrition and hunger. The Anganwadi programme (Integrated Child Development Services – ICDS) was integrated with POSHAN Abhiyaan and a feeding strategy for teenage females beginning in 2021-22.
  • Mid-Day Meal (MDM) Scheme: The MDM scheme delivers nutritious meals to about 12 million school-aged children. The programme has shown beneficial results, such as increased attendance, improved academic outcomes, and decreased stunting among children.
  • Gandhi, Mahatma MGNREGA (National Rural Employment Guarantee Act): MGNREGA ensures 100 days of employment per rural home and is critical in providing economic support to rural communities.
  • National Food Security Act (NFSA): The National Food Security Act (NFSA) intends to offer subsidised grains to over 80 crore people, providing food security.
  • National Social help Programme (NSAP): The NSAP provides pensions and monetary help to low-income people such as the elderly, widows, and disabled people.
  • Prime Minister Matru Vandana Yojana (PMMVY): According to the NFSA mandate, the scheme provides conditional cash transfers to women in the unorganised sector, with the goal of covering all eligible women and babies.

Concerns over the distribution of their resources

  • Saksham Anganwadi and Poshan 2.0: Funding for these programmes has been reduced from 0.13% of GDP in 2014-15 to 0.07% in 2023-24. This decrease in fiscal support raises questions about the programmes’ ability to address child malnutrition and hunger effectively.
  • MDM plan: As a share of GDP, the budget allocation for the MDM plan has been reduced by half, from 0.08% in 2014-15 to 0.04% in 2023-24. This reduced allocation makes it difficult to provide nutritious meals to children while also improving their overall health results.
  • MGNREGA expenditure as a percentage of GDP has fallen from 0.26% in 2014-15 to 0.20% in 2023-24. This reduction in funding raises worries about the program’s ability to deliver enough job opportunities to rural households.
  • National Food Security Act: NFSA spending as a percentage of GDP has fallen from 0.94% in 2014-15 to 0.65% in 2023-24. This reduction in allotment makes ensuring food security for a large population difficult.
  • National Social Assistance Programme (NSAP): The share of GDP allocated to NSAP has decreased from 0.06% in 2014-15 to 0.03% in 2023-24. This decline raises questions about the sufficiency of pensions and financial support provided to vulnerable groups.
  • PM Matru Vandana Yojana (Matru Vandana Yojana): The PMMVY budget falls well short of the minimum amount, limiting its ability to provide proper maternity benefits.

Why is there so much discontent among the working class?

  • Low earnings and Income Inequality: Many workers, particularly in the informal sector, earn insufficient earnings to cover their basic necessities. Income inequality exacerbates the pay discrepancy between the working class and higher-income groups, causing financial suffering.
  • Lack of Job Security: Many working-class people, particularly those in the informal economy, work in precarious jobs with no job security or benefits. Uncertainty about job security, a lack of social safety, and limited access to formal labour rights all contribute to their anguish.
  • Limited Access to Social Protection: A sizable percentage of the working class does not have access to adequate social protection mechanisms such as health insurance, pension plans, and unemployment benefits. As a result, they are more exposed to economic shocks and have less resilience in times of crisis.
  • Declining Real Wages: Despite economic development, real pay growth has lagged, resulting in stagnation or low purchasing power expansion for many employees. This occurrence inhibits their ability to change their living conditions and adds to their distress.
  • Exploitative Working circumstances: The working class is frequently subjected to exploitative working circumstances, such as lengthy working hours, dangerous working surroundings, a lack of breaks, and limited collective bargaining rights. These diseases can have a significant influence on both physical and mental health, contributing to discomfort.
  • Lack of possibilities for Skill Development and Upward Mobility: A lack of possibilities for skill development and upward mobility can trap workers in low-wage employment with few opportunities for progress. The working class can get frustrated and distressed as a result of a lack of upward mobility.
  • Inadequate Social Services: The working class has an additional burden due to a lack of access to decent healthcare, education, and affordable housing. Their financial stress is exacerbated by a lack of inexpensive and accessible services, which limits their ability to meet basic necessities.

Way forward

  • Prioritise Social Spending: To provide appropriate funding for welfare systems, the government should prioritise social spending, particularly in the post-COVID-19 recovery period. It is critical to allocate sufficient finances to programmes that target child nutrition, working-class welfare, social assistance, and education in order to uplift vulnerable parts of society.
  • Budget Allocations Should Be Increased: To effectively combat malnutrition and improve children’s health outcomes, funding allocations for child nutrition and hunger programmes such as Saksham Anganwadi and Poshan 2.0, as well as the mid-day meal scheme, must be raised. Adequate financing will guarantee that these programmes are implemented and expanded successfully.
  • MGNREGA and NFSA should be strengthened: Recognising the importance of MGNREGA and NFSA in providing rural employment and food subsidies, the government should prioritise and increase budget allocations for these programmes. This will help the rural population’s livelihoods and decrease poverty and hardship.
  • Focus on Wage Growth: To alleviate working-class misery, initiatives that support wage growth should be prioritised. This can be accomplished through skill development programmes, labour reforms, and initiatives to improve the job ecosystem, resulting in higher pay and a better quality of life.
  • Improve Social Security Programmes: To give enough support to the elderly, widows, and disabled people, the government should consider raising expenditures for social security programmes such as the National Social Assistance Programme (NSAP). Raising pension amounts and expanding coverage can assist vulnerable members of society avoid financial difficulty.
  • Provide Adequate Funding for Education and Healthcare: Given the importance of education and healthcare, the government should provide adequate funding for school education and hospital infrastructure. This will aid in increasing access to high-quality education, lowering dropout rates, and ensuring inexpensive and accessible healthcare for all.
  • Improve HDI and Social Indicators: In order to raise India’s HDI ranking and address rising malnutrition levels, it is critical to increase social spending in proportion to GDP growth. This can be accomplished by redirecting revenue lost owing to tax breaks and implementing sound fiscal management practises.
  • Improve Monitoring and Evaluation: To guarantee that allocated monies are used properly and reach the intended beneficiaries, effective monitoring and evaluation processes should be put in place. Regular evaluation of the effect and outcomes of welfare programmes will assist in identifying areas for improvement and enabling evidence-based policy decisions.

@the end

The decrease in welfare system allocations in the Union Budget raises questions about the government’s commitment to social development, affecting critical areas such as child nutrition, working-class welfare, and access to education and healthcare. To promote inclusive growth, it is critical to prioritise social spending, enhance budget allocations, and address the pressing concerns confronting underprivileged segments of society.

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