- Declining Welfare Expenditures
- Delhi government-L-G power tussle
Declining Welfare Expenditures
The Union Budget that was tabled recently was criticised by experts over a decline in allocations for welfare schemes in real terms.
GS Paper-3: Indian Economy and issues relating to Planning, Mobilization of Resources; Government Budgeting; Science and Technology- Developments and their Applications and Effects in Everyday Life
Dimensions of the Article:
- The Process of Creating the Indian Budget
- Trend in declining Welfare expenditure
- A stagnant HDI rank
The Process of Creating the Indian Budget
According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.
It details the government’s expected revenue and expenditure, and lays out its priorities for spending and taxation. The budget is an important tool for managing the country’s finances and guiding economic growth.
The process of creating the Indian Budget is a long and complex one, involving several key players and stages. Here is an overview of how the Indian Budget is made.
- Preparation of the Draft Budget: The Ministry of Finance starts the budget-making process by preparing a draft budget. The draft budget is based on the expected revenue and expenditure for the upcoming fiscal year, as well as the government’s priorities and goals.
- Consultation with Other Departments: Once the draft budget is ready, the Ministry of Finance consults with other departments and agencies for their inputs and budget proposals. This helps ensure that the budget reflects the needs and priorities of all relevant stakeholders.
- Approval by the Cabinet: After consultations with other departments, the draft budget is presented to the Cabinet for approval. The Cabinet reviews the budget and makes any necessary changes.
- Presentation in Parliament: Once the Cabinet approves the budget, it is presented in Parliament by the Union Finance Minister. The Budget speech is usually delivered in late February or early March, and is an important event in India’s political calendar.
- Discussion and Debate in Parliament: After the Budget is presented in Parliament, it is open for discussion and debate by the members of both the Lok Sabha and Rajya Sabha. Members of Parliament (MPs) use this opportunity to raise questions, offer suggestions, and highlight their concerns about the budget.
- Examination by Parliament Committees: After the Budget is discussed and debated in Parliament, relevant committees examine it in detail and make recommendations. These committees may make changes to the budget, based on their findings and recommendations.
- Passage of the Budget: Once the relevant committees have completed their examination of the budget, it is passed by Parliament. The Budget becomes law once it is passed, and the government is obligated to implement it.
- Implementation of the Budget: After the Budget is passed, it is implemented by the various departments and agencies of the government. Each department is responsible for implementing its portion of the budget, and for ensuring that the money is spent in accordance with the budget plan.
In conclusion, the Indian Budget is a comprehensive financial plan that outlines the government’s expected revenue and expenditure for the upcoming fiscal year.
Trend in declining Welfare expenditure:
- As per the analysis of the Budget papers, experts point out a decline in the expenditure on welfare schemes at a time of post-COVID-19 recovery when welfare spending should have been a priority.
- Similarly, last year’s Budget too ignored social spending in favour of capital expenditure.
- The central allocations for welfare schemes and sectors that ensure basic rights have declined as a proportion of GDP over the last decade.
- Saksham Anganwadi and Poshan 2.0:
- The allocation for the revamped Saksham Anganwadi and Poshan 2.0 scheme that aims to address child malnutrition and hunger went down to almost half of what it was in 2014.
- Lack of funds to address Malnutrition:
- According to National Family Health Survey (NFHS)-5 data, the percentage of anaemic, underweight and stunted children in India is 67%, 32% and 36%, respectively. Yet the funds allocated to address theis were inadequate.
- Mid-Day Meal scheme:
- It is an important nutrition scheme that covers over 12 crore children.
- Evidence shows that the scheme has led to an improvement in class attendance, learning as well as nutritional outcomes and reduced stunting in children.
- However, the Budget allocation for MDM decreased by 50% as a share of GDP.
- PM Matru Vandana Yojana (PMMVY):
- It is a scheme that provides maternity benefits as a conditional cash transfer of ₹5,000 to women in the unorganised sector.
- There was also a significant decline in the funds needed for the scheme.
- MGNREGA and NFSA scheme:
- MGNREGA guarantees 100 days of employment to every rural household whereas the NFSA provides subsidised grains to over 80 crore people.
- MGNREGA and the Public Distribution System were key to averting disaster during the pandemic; however, there was a sharp decline in allocations as a share of GDP.
- Expenditure on school education:
- As a share of GDP, central expenditure on school education (primary and secondary) has steadily decline. This is a concern because there was a surge in primary dropout rates after the catastrophic effects of the pandemic.
- Increase in Health-care expenditure:
- According to the latest State of the World’s Children report by UNICEF, India has the lowest vaccination rates in South Asia.
- India’s out-of-pocket expenditure on health remains much higher than the global average, pushing millions into poverty each year.
- The share of central health expenditure in GDP went up from 0.25% in 2014-15 to 0.30% this year. This is a significant step ahead to address the above concerns.
A stagnant HDI rank:
- Globally, the share of social expenditure must grow proportionately as a country’s GDP grows.
- Though there was an increase in allocations for social security programmes during the pandemic to 4.5%, has now decreased to just 1.5%.
- According to the World Social Protection Report by the International Labour Organization, only 24.8% of Indians are covered by at least one social security scheme against the Asia-Pacific average of 44%.
- Its result can be clearly seen in India’s stagnant Human Development Index rank at 132 and rising malnutrition levels.
The above data provides an opportunity for the upcoming Budget to resolve the confusions regarding the additional funds that will be allocated for different sectors and to specifically address the concerns within each sector.
-Source: The Hindu
Delhi government-L-G power tussle
The Supreme court of India has underlined the primacy of the NCT’s elected representatives in its governance. This is a significant judgement that upheld the principle of federalism.
GS-II: Functions and Responsibilities of the Union and the States, Issues and Challenges Pertaining to the Federal Structure
Dimensions of the Article:
- Union Territories
- Special Provisions with respect to Delhi (Article 239AA)
- SC Judgement reaffirms the principles of representative Government and federalism
- Unique constitutional status to National Capital territory of Delhi?
- Control over Union Territories
- Details of some Union Territories
- In the Republic of India, a lieutenant governor is the constitutional head of five of the eight union territories.
- The lieutenant governor is appointed by the President of India for a term of five years, and holds office at the President’s pleasure.
- Since the union territories of Delhi, Jammu and Kashmir and Puducherry have a measure of self-government with an elected legislature and council of ministers, the role of the lieutenant governor there is mostly a ceremonial one, akin to that of a state’s governor.
- In Andaman and Nicobar Islands and Ladakh however, the lieutenant governor holds more power, being both the head of state and head of government.
- The other three union territories—Chandigarh; Dadra and Nagar Haveli and Daman and Diu; and Lakshadweep—are governed by an administrator.
- Unlike the lieutenant governors of other territories, they are usually drawn from the Indian Administrative Service or Indian Police Service.
- Since 1985 the Governor of Punjab has also been the ex-officio Administrator of Chandigarh.
- A Union territory is a type of administrative division in the Republic of India.
- Unlike the states of India, which have their own governments, union territories are federal territories governed directly by the central Government of India.
Special Provisions with respect to Delhi (Article 239AA)
- Article 239AA was inserted by 69th Amendment Act, 1991, which provides special provisions for the Union Territory of Delhi, and since this amendment came into effect, the UT of Delhi is called the National Capital Territory of Delhi.
- The administrator of the NCT as appointed by the President and is known as the Lieutenant-Governor.
- Through Article 239AA, a legislative assembly for NCT of Delhi was created, and the power to decide the number of the seats and reservation of the seats was vested in the Parliament.
- With this, Delhi became a State and the Constitutional provisions with regard to Elections (Article 324-327 and 329) became applicable in NCT.
SC Judgement reaffirms the principles of representative Government and federalism:
- A five-judge Constitution Bench headed by Chief Justice DY Chandrachud ruled that the bureaucrats in charge of the NCT’s administration have to report to Delhi’s council of ministers, except in matters related to policing, public order and land.
- The Centre had argued that it — and its representative, the lieutenant governor — needed “the power to make transfers and posting of officers in Delhi on account of it being the national capital” and the “face of nation”.
- The court rightly pointed out that-‘If a democratically elected government is not given the power to control the officers, the principle of accountability will be redundant. If the officers stop reporting to the ministers or do not abide by their directions, the principle of collective responsibility is affected.’
- SC judgement in 2018:
- In 2018, a five-judge Constitution bench had unanimously ruled that the “Delhi L-G was bound by the aid and advice of the elected government, and both needed to work harmoniously with each other.
- That verdict played a role in enabling Delhi’s AAP government to translate its welfarist commitments into policies.
Unique constitutional status to National Capital territory of Delhi?
- The top court observed that though the National Capital territory of Delhi (NCTD) could not be accorded the status of a state under the Constitution, the concept of federalism would still be applicable to it.
- Though Delhi is not a full-fledged state, its legislative assembly is constitutionally entrusted with the power to legislate upon the subjects in the State List and Concurrent List of the Constitution.
- It is not a State under the First Schedule to the Constitution, yet it is conferred with power to legislate upon subjects in Lists II and III to give effect to the aspirations of the people of NCTD.
- While NCTD remains a Union Territory, the unique constitutional status conferred upon it makes it a federal entity for the purpose of understanding the relationship between the Union and NCTD.
- The majority in the 2018 Constitution Bench judgment held that while NCTD could not be accorded the status of a State, the concept of federalism would still be applicable to NCTD.
More about Union Territories in India
- As of 2020 there are eight union territories.
- When the Constitution of India was adopted in 1949, there was only one Part D state: Andaman and Nicobar Islands.Three more, the Delhi, Chandigarh and Lakshadweep were formed by separating each territory from pre-existing states.
- Another two (Dadra and Nagar Haveli and Daman and Diu and Puducherry) were formed from acquired territories that formerly belonged to colonial powers (Portuguese India and French India).
Control over Union Territories
- The Parliament of India can pass a law to amend the constitution and provide a Legislature with elected Members and a Chief Minister for a union territory, as it has done for Delhi and Puducherry.
- In general, the President of India appoints an administrator or lieutenant governor for each UT.
- Due to existence of union territories, many critics have resolved India into a semi-federal nation, as the central and state governments each have their own domains and territories of legislation.
- Union territories of India have special rights and status due to their constitutional formation and development.
- The status of “union territory” may be assigned to an Indian sub-jurisdiction for reasons such as safeguarding the rights of indigenous cultures, averting political turmoil related to matters of governance, and so on.
- These union territories could be changed to states in the future for more efficient administrative control.
Details of some Union Territories
- Delhi, Puducherry and Jammu and Kashmir operate differently from the other six. They were given partial statehood and Delhi was redefined as the National Capital Territory of Delhi (NCT) and incorporated into a larger area known as the National Capital Region (NCR).
- Delhi, Puducherry and Jammu and Kashmir have an elected legislative assembly and an executive council of ministers with partially state-like function.
- In August 2019, the Parliament of India passed Jammu and Kashmir Reorganisation Act, 2019. The act contains provisions to reconstitute the state of Jammu and Kashmir into two union territories, one to be eponymously called Jammu and Kashmir, and the other Ladakh on 31 October 2019.
- In November 2019, the Government of India introduced legislation to merge the union territories of Daman and Diu and Dadra and Nagar Haveli into a single union territory to be known as Dadra and Nagar Haveli and Daman and Diu.
Hence the Union of India must exercise its powers within the boundaries created by the Constitution and uphold the principles of democracy and federalism, which are essential features and form part of the basic structure.
-Source: The Indian Express, The Print