Home Insights Union Budget 2022 and the Well-being Challenge – IMPRI Impact and Policy...

Union Budget 2022 and the Well-being Challenge – IMPRI Impact and Policy Research Institute

8
0
Union Budget 2022 and the Well-being Challenge - IMPRI Impact and Policy Research Institute

Sandeep Chachra & Joseph Mathai

Even the most optimistic observer of the Indian economy would find it difficult to show how the Indian economy is helping the well-being of the large majority of the population. Battling a pre-COVID slowdown, battered by two waves of COVID-19, and still struggling with a plateauing third wave, it would have been an uphill task for any Government of the day to present a budget that would present strong proposals for recovery for the masses of India and booster hope.

Union Budget 2022-23

 The majority of the media has hailed it as a “booster budget” because a 35.4% increase in capital expenditure was done with the aim of “speedy and sustained economic revival and consolidation through its multiplier effect”.  A critical review of the budget however shows too great a dependency on the trickle-down impact of this investment on employment and incomes for the poor.  For instance, the promised increase of six million jobs to be created by this additional investment amounts to less than 17,000 jobs per day. In a context where job loss and joblessness is endemic, this would be of little consequence.

 Private consumption is a good indicator of the income and well-being of populations. The Economic Survey and earlier data from the Centre for Monitoring Indian Economy (CMIE) show that private consumption in the year 2021, though better than the 2020 numbers, is much below the 2019 figure.  Even in the current year, private consumption, which constitutes roughly 60% of the total GDP, has recovered only to 2017 levels  – levels during the time of economic slowdown.  Of course, existing and growing income inequalities also mean that majorities of the working poor are much worse off.

Considering the state of the economy the budget should have laid out in some detail how a major push would be made to increase employment and peoples’ incomes. As a first step, investment into the employment-intensive MSME sector should have been a major component of this budget. However, apart from the extension and expansion of credit lines, no major fiscal stimulus has been offered to this sector.

An emphatic focus on the promotion of collective enterprise through co-operatives, producer companies, especially women enterprises could go a long way in creating sustained livelihood for informal workers and the rural poor.

MGNREGA has proved to be a tried and tested way of creating work. Recent data has demonstrated that the scheme has been successful in even providing work for returning migrants.

Disregarding the call for enhancing the MGNREGA guarantee from 100 to 200 workdays, and extension of an employment guarantee scheme to urban areas, the 2022 Union Budget shows a reduction in financial outlays.  The 2022 Union Budget has allocated Rs 73,000 crores to MGNREGA, which is a decrease over both 2021-22 revised estimates of Rs 98,000 crores, and 2020-21 actual expenditures of Rs 1,17,000 crores.

On the farmers front, while the push for organic agriculture is a welcome one, even though limited in the first phase to the Ganga corridor, substantive budget allocations have been found wanting. Beyond the needed steps on reduction of taxes on cooperatives, and incentives for start-ups, what was needed were substantive allocations to rural regeneration.

This would be much-needed recognition that the stressed agriculture sector. which turned out to be such a saviour for the economy during the lockdown-caused reverse migration, needs much higher attention and levels of investment.

Of course, a full resolution of the agrarian crisis, which needs systemic change including land reforms falls beyond the purview of the Union Budget, but expected steps such as an income assurance, particularly for small and marginal farmers, and a cover of decent social security could have been taken, but were not. In fact, quite to the contrary, the outlays for guaranteeing minimum support prices for all crops have been also reduced from Rs 2.42 lakh crores in the 2021 Union Budget, to 2.37 lakh crores this year.

MGNREGA has proved to be a tried and tested way of creating work. Recent data has demonstrated that the scheme has been successful in even providing work for returning migrants.

Disregarding the call for enhancing the MGNREGA guarantee from 100 to 200 workdays, and extension of an employment guarantee scheme to urban areas, the 2022 Union Budget shows a reduction in financial outlays. 

The 2022 Union Budget has allocated Rs 73,000 crores to MGNREGA, which is a decrease over both 2021-22 revised estimates of Rs 98,000 crores, and 2020-21 actual expenditures of Rs 1,17,000 crores.

On the farmers front, while the push for organic agriculture is a welcome one, even though limited in the first phase to the Ganga corridor, substantive budget allocations have been found wanting. Beyond the needed steps on reduction of taxes on cooperatives, and incentives for start-ups, what was needed were substantive allocations to rural regeneration.

This would be much-needed recognition that the stressed agriculture sector, which turned out to be such a saviour for the economy during the lockdown-caused reverse migration, needs much higher attention and levels of investment.

Of course, a full resolution of the agrarian crisis, which needs systemic change including land reforms falls beyond the purview of the Union Budget, but expected steps such as an income assurance, particularly for small and marginal farmers, and a cover of decent social security could have been taken, but were not.

In fact, quite to the contrary, the outlays for guaranteeing minimum support prices for all crops have been also reduced from Rs 2.42 lakh crores in the 2021 Union Budget, to 2.37 lakh crores this year.

First Published in The Tribune titled Union Budget 2022 and the Well-being Challenge on 2 February 2022

Read another piece by Sandeep Chachra titled Managing Isolation in Rural U.P. Challenging; People in Denial About COVID Symptoms – Sandeep Abasaheb Chavan in IMPRI Insights

Read another piece by Sandeep Chachra titled National Employment Policy Should Focus on a Balance Between Reforms in Agricultural Sector and Enshrining of Right to Work in IMPRI Insights

Read another piece by Sandeep Chachra titled We owe an APOLOGY to Migrant Informal Workers in IMPRI Insights

YouTube: Watch Sandeep Chachra at IMPRI #PopulationandDevelopment – Population, Health and Union Budget 2022-23

About the Authors

Sandeep Chachra, Executive Director, ActionAid India

Joseph Mathai

Joseph Mathai, Senior Mananger, Communications, ActionAid India

Previous articleVideo: Cities and Union Budget 2022-23 – IMPRI Impact and Policy Research Institute
Next articleTax on the Ultra-Rich for Equitable Distribution of Wealth – IMPRI Impact and Policy Research Institute
IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

LEAVE A REPLY

Please enter your comment!
Please enter your name here