Why Modi govt’s budget looks more like a Patanjali product designed by Ramdev

Be it women and children’s health or farmers’ crops or ex-servicemen’s OROP, Piyush Goyal’s interim budget slashed hope on every front

File photo of Narendra Modi | PIB

So the Budget – a “full budget” masquerading as an “interim budget” — has been adopted, with the Speaker refusing to allow any amendments to be discussed in the Lok Sabha (though amusingly enough, her motion to club all the Opposition amendments together was accidentally rejected by a raucous but sloppy BJP majority, whose vociferous “no”s she chose to treat as a “yes”). I have already dissected the Budget in this space, but there are several more concerns with the Budget proposed by Piyush Goyal, the interim finance minister, that I could not raise in Parliament in the two (yes, you read that right, two) minutes the Speaker accorded me. Here are the main ones:

The current government has frequently appropriated the country’s armed forces for political sloganeering and propaganda, and the Budget speech, peppered with references to a war movie, was no exception. To great thumping of desks, the FM announced that the defence allocation would exceed Rs 3 lakh crores for the first time. This, however, represents merely a 6.87 per cent increase from last year’s allocation of Rs 2.98 lakh crore, which was 1.58 per cent of the country’s GDP, the lowest since 1962. Even with the current allocation (once adjusted for inflation), many defence experts have pointed out that the increase is insufficient to meet the modernisation requirements of the armed forces at a time when 68 per cent of the Army’s equipment has been revealed by a senior General to belong to the ‘vintage’ category.

The finance minister also claimed that the Modi government was the first to do justice to the issue of One Rank One Pension. But the report submitted in October 2016 by the Justice Reddy Committee, which was tasked by the government the previous year to iron out the anomalies in the scheme, is yet to be published or implemented. Ex-servicemen’s groups have already contested the government’s claims of doing justice to OROP, but as their shameful evictions from Jantar Mantar shows, when it comes to walking the talk, the government prefers partisan posturing over visible action.

The story with the finance minister’s budgetary allocation for healthcare is no better.

At an allocation of Rs 61,398.12 crore, the health and family welfare budget stands at just one-fifth of the budgetary allocation for defence spending, and still short of the 2.5 per cent of GDP, which the government had outlined in its 2017 National Health Policy.

This neglect is apparent in the allocation made by this government to the National Health Mission – a UPA success story that in ten years had transformed the health of the poor, under-served, and marginalised — which has only seen an increase of Rs 1,062 crore over the 2018-19 budget, unlikely to even cover the prevailing inflation rate. Indeed, the NHM’s share in the total budgetary allocation for health under the Modi government has fallen from 61 per cent in 2014-15 to 49 per cent in 2019-20.

The budget also makes clear this government’s disdain towards women and child health, which have experienced a cut of around Rs 4,200 crores compared to expenditure in 2017-18. This is part of an overall pattern—in 2012-13, the UPA allocated 4.76 per cent of its budget to child-related schemes; under the NDA it is only 3.25 per cent. To encourage the participation of women in the work force, the UPA came up with the National Crèche Scheme; the BJP government has savagely cut it, slashing a further 61 per cent this year.

Even the budgetary allocation to this government’s most prominent healthcare scheme, Ayushman Bharat, is poorly thought through. The preventative healthcare arm – the Health and Wellness Centres – has been relegated to the background, with the government’s own figures pointing out that out of the target of 15,000 HWCs set by the ministry for 2018-19, only about 8,000 have so far been operationalised. At this rate, it would take more than a decade to achieve the 1.53 lakh HWCs meant to be operationalised by 2022. By failing to adequately address primary healthcare needs, this government is putting additional stress on the often prohibitively expensive tertiary healthcare system.

The gulf between what the BJP government promises and what it eventually seeks to deliver is apparent in the insurance scheme aspect of Ayushman Bharat, which is currently miles away from the government’s claim that it is creating a more equitable health system. While the public-funded insurance scheme accounts for over 50 per cent of the increase in the total budgetary allocation for health, it still falls short of the real needs. The government has budgeted Rs 6,400 crore for Ayushman Bharat — but if just 1 per cent of our population seeks the Rs 5 lakh benefit that the PM boasts about, you would need Rs 50,000 crore in the budget, not Rs 6,400 crore.

By essentially assuring market share, the Ayushman Bharat insurance scheme is a scheme for private investment in healthcare. In the existing scenario of inadequacy and inequality in healthcare access (plus scant enforcement or presence of regulation), who will benefit from Ayushman Bharat? How much will go to the insurance companies and how much to the poor patients? Rather than help the needy, it appears that the government is ensuring the transfer of hard-earned taxpayers’ money into the hands of private insurance providers. Instead of strengthening the public health system, the government is inexplicably pouring money into private companies while leaving the public system underfunded.

We have already seen a similar story with the Pradhan Mantri Fasal Bima Yojana, the crop insurance scheme which our Prime Minister claimed would transform the lives of our farmers. Since its implementation, insurance companies have collected a gross premium of Rs 47,408 crore from farmers, but total claims paid were just Rs 31,613 crore. Earlier, under the equivalent UPA schemes, the gross premium collected was Rs 10,560 crore and total claims paid were Rs 28,564 crore. Under the present BJP scheme, the premiums paid to insurance companies have increased by an alarming 350 per cent, whereas the number of farmers covered under the scheme has risen by only 0.42 per cent. In fact, 84.47 lakh farmers have left the scheme.

To say that education is not a priority in this Budget would be an understatement. For one, IIMs have received less than half of last year’s Budget and NITs have not been allocated any amount at all. Programmes for the education of children from the SC/ST & minority communities have been slashed. The Interim Budget also had no specific schemes for youth unemployment, except the unsuccessful and hollow skill development scheme, with its underwhelming record of under-achievement.

As of January this year, ‘Pradhan Mantri Kaushal Vikas Yojana’ stands well short of its targets. With less than a year to go for their self-appointed deadline of 2020, PMKVY stands 90 per cent short of its target of 10 million placements (with only 1 million trainees managing to secure a job); in terms of enrollment, it falls short by 64 per cent and in terms of certification by 74 per cent. No wonder then that young people’s experience of the “achhe din” promised by our Prime Minister is one of shrinking opportunities.

As for the government’s optimistic estimates of growth, normally growth implies that production, profits, wages, jobs and exports are all growing. Here we have a peculiar situation where none of these is growing and still the government projects an 8 per cent plus GDP growth. At present, the external debt of the country is already at an all-time high of Rs 82 lakh crore (or $529.7 million as of September 2018), a number the finance minister carefully did not mention in his presentation. And growth has slowed in all the key sectors – manufacturing, construction, mining, industries, electricity and agriculture. The index of industrial production (IIP) has grown at a mere 0.5 per cent in December 2018. Corporate sector profitability has been weak and the primary bond offerings from Indian issuers fell by 30% last year to a decadal low in 2018.

It’s all the more surprising that the government’s supporters are so ecstatic at the Kamadhenu budget Mr Goyal has presented. I only hope that unlike the black money estimates floated by the ruling party, the finance minister is not getting his economics from Baba Ramdev. Might it be that what we actually have is a Patanjali budget, one that puts market share above quality?

Dr Shashi Tharoor is a Member of Parliament for Thiruvananthapuram and former MoS for External Affairs and HRD. He served the UN as an administrator and peacekeeper for three decades. He studied History at St. Stephen’s College, Delhi University and International Relations at Tufts University. Tharoor has authored 18 books, both fiction and non-fiction; his most recent book is The Paradoxical Prime Minister. Follow him on Twitter @ShashiTharoor.