Thursday, July 9, 2009

Budget for `Aam Aadmi’ leaves children out

Less Spending, More Debt for India’s Children


UNION BUDGET 2009-10 AT A GLANCE

Union Budget 2009-10, the first budget of the second United Progressive Alliance government that’s still basking in the glory of a resounding election victory, gets a thumbs-down from India’s children for two reasons. First, it hardly has any new scheme for children, except some reorganization in education, nor is there more money. Second, it has managed to place a fresh debt burden of Rs 3500—and rising—on the head of every Indian, including 450 million persons less than 18 years’ old.

According to calculations made by HAQ: Centre for Child Rights, which has been analysing central and state budgets from a child rights perspective for ten years, the Budget for Children for the current fiscal is only Rs 43104.16 crore. In other words, the amount of money allocated to various children’s programmes is only 4.21 per cent of the record Rs 10.20 lakh crore of total expenditure budgeted for 2009-10. This is the lowest share accorded to children in the last four years—as table 1 shows, the BfC share was 3.85 per cent in 2005-06. This is much less than the 5.31 per cent share for children budgeted for 2008-09 as well as the reduced share of 4.31 per cent in the revised estimates of that year.
In fact, the BfC share comes to even less­­ -- 3.88 per cent—if we take into account Statement 22 of the Expenditure Budget 2009-10 document, defined as Budget Provisions for Schemes for the Welfare of Children, prepared by the finance ministry. This `children’s budget statement’ was initiated by former finance minister P Chidambaram last fiscal, and this year’s statement shows a few glaring omissions of schemes probably due to departmental tardiness and is therefore smaller than HAQ estimate.

Reduced allocation across sectors

Despite unveiling India’s biggest budget in history that ostensibly aims at making life easier for the `aam aadmi’, the government has forgotten about its children who constitute 44 per cent of its people. As one can see from table 2, across sectors, the share of children’s schemes has declined, except for a small rise in health. Must children continue to be treated as secondary citizens?
Education
The share of education has declined from 3.84 per cent last fiscal to 3.03 per cent, although Rs 3084.98 crore has been allocated just for the new schemes. This is because a few schemes have been wound up or merged with other schemes. For instance, the New Model School which had an allocation of Rs 650 crore in 2008-09, has no allocation while there is an allocation of Rs 350 crore under the new head of Setting up of 6000 Model Schools at Block Level as Benchmark of Excellence. Even the Scheme for Universal Access and Quality Education at Secondary Stage (SUCCESS) has no allocation this year against Rs 2185 crore in 2008-09.

Similarly, the centrally sponsored scheme of Integrated Education for Disabled Children (IEDC) was launched in 1974 to provide educational opportunities to disabled children in common schools is revised to Inclusive Education for disabled at Secondary Schools (IEDSS) at the secondary stage. The IEDC allocation of Rs. 70 crore last fiscal has been shifted to IEDSS in 2009-10. Does it mean that there are no disabled children left to be integrated at the elementary stage?
There’s finally an allocation for the Rashtriya Madhyamik Shiksha Abhiyan scheme that was conceptualized in 2007 and approved only in January 2009. But there has been no change in the outlay for the showcase schemes of Sarva Shiksha Abhiyan (for 6-14 age group) and Midday Meal Programme from last year. The government seems to be treating the 15-16 age group as a separate entity from the 6-14 age group, not pausing to think that there’s no secondary education without consistent and quality elementary education that doesn’t force children to drop out of school!

In fact, the budget’s single-minded focus on higher and vocational education schemes, in a year that is expected to enact the Right of Children to Free and Compulsory Education Act, makes it abundantly clear that our politicians want to build employable citizens for the 12 million jobs it is promising, not ensure that they get real education in schools. With so little interest amongst politicians in actually getting India's children educated, one can safely assume that the RMSA will end up being run like the SSA.
Health
The only sector where the BfC share has gone up from 2008-09 is health. This is mainly because of the 16.16 per cent rise in the allocation for the National Rural Health Mission, including a 25.7 per cent increase in the allocation for the Reproductive and Child Health Programme (HAQ does not take into account the entire NRHM for child budget analysis). Yet, as the government’s own Economic Survey 2008-09 admits, though there has been improvement in the quality of health care over the years much more needs to be done.

Development
The flagship scheme in this sector, the controversial but essential Integrated Child Development Scheme (ICDS) has received a meagre 8.28 per cent raise in allocation to Rs. 6026.30 crore. Nutritional development of little children is clearly not a priority anymore for the government because the goalpost of universalization of ICDS has also been moved to 2012, as against the deadline of December 2008 prescribed by the Supreme Court and the original deadline of 2009 in the National Common Minimum Programme 2004. No wonder then that the share of the development sector allocation in the Union Budget has actually fallen from 0.87 per cent in 2008-09 to 0.69 per cent.

Protection
In March, when the long-awaited Integrated Child Protection Scheme was approved, thanks to pressure from children’s rights groups such as HAQ, but the disappointing outlay for the scheme in its very first year of operation raises questions about the government’s intention of implementing it. ICPS, a holistic scheme to build a protective environment for children nationwide, was to work as a unique umbrella scheme for protection replacing all running schemes. It got Rs 200 crore last fiscal, including Rs 20 crore for the North-east, but now it’s down to Rs 60 crore including Rs 6 crore for NE. The government also seems to have given up on rehabilitating child labour with the allocation for Improvement in Working Conditions of Child/Women Labour scheme down by over 42 per cent to Rs 90 crore in 2009-10. As a result, protection has the least and minimal share of budget resources; out of every Rs 1000 spent in the Union budget, protection gets just 2 paise.

Food security still a promise

The massive rise in expenditure this fiscal, up 36 per cent in just one year from the budget estimates in 2008-09 is directed mainly at an economic stimulus package for agriculture and infrastructure and a 25 per cent hike in defence outlay. Among these, the only two measures that somewhat benefit children are: the promised National Food Security Act to give 25 kg of rice or wheat per month at Rs 3 per kg, and the Rs 350 crore allocation for the health insurance scheme launched last year, both aimed at the poorest families. More than 46 lakh below poverty line families in 18 states and Union territories have been issued biometric smart cards for the scheme, the finance minister said in his speech. But, since the cheap grain is a promise, the huge expenditure for it is not part of the budget and, we can safely assume, will add to the debt burden later in the year when this promise is actualized.

Also, there’s no guarantee that cheap grain-type schemes actually benefit families, including children. Evidence, in the form of research studies, sample surveys and monitoring exercises, suggest to the contrary. As the Economic Survey 2008-09 admits, “the reach of public goods and quasi public goods and services supplied by the state to people still leave a lot of scope for improvement. There are still leakages in the schemes and the benefits do not reach the intended target group of people.” HAQ’s many budget analyses have found that allocations for such schemes suffer from large-scale under-spending at the ground level because of poor project planning, lack of interest of the state and misuse of funds.

A generational burden

Even as the government has decided to spend more to work its way out of the slowdown, its plan can have undesirable side effects. A lot of this money will come from borrowing as tax income growth will be slow. Thus interest payments are slated to shoot up by 31.85 per cent in two years, to Rs 225511 crore in budget 2009-10 compared to the actual estimate of 2007-08. It could be higher, because the fiscal deficit, the new borrowing expected to be made in the current fiscal by the government to meet the massive expenditure programme, has been estimated at a record 6.8 per cent of the gross domestic product, the highest since liberalization began in 1991!

As a percentage of the GDP, thus, the fiscal deficit has gone up by one and a half times over the actual estimate of 2.7 per cent in 2007-08. In numerical terms though, the deficit has more than doubled in the same time to Rs 400996 crore. The slower rise in the deficit in terms of the GDP is because growth has shrunk in the last year due to the global financial crisis, dipping to 6.7 per cent in 2008-09 compared to the previous five-year average of 9 per cent. Economists describe a high debt and fiscal deficit as “a generational burden” as India’s children will have to pay off the cumulative interest burden in the future and bear the resultant pressure on prices and loan rates.