‘Not a budget for the poor’

Backlash over deep cuts to social security in India’s budget

- NAMITA SINGH

India’s federal budget has attracted sharp criticism from opposition parties and civil society groups over spending cuts to key social security programmes feeding and employing the poor, as the country battles rising inequality.

Finance minister Nirmala Sitharaman on Wednesday presented the last full budget of prime minister Narendra Modi’s second term ahead of general elections next year, setting total spending at Rs 45 trillion 454bn).

With this expenditure 7.5 per cent higher than in the current financial year, the government aims to boost economic growth and thereby reduce the fiscal deficit to 5.9 per cent of GDP, compared to 6.4 per cent for this year.

The deficit plan will be aided by a significant drop in the funds allocated to the flagship federal food security policy that feeds 800 million people in the country.

That is not the only social security programme seeing a sharp budget slash. Spending will also be cut in the rural jobs guarantee programme, which provides a minimum of 100 days of employment to more than 150 million Indians.

The food subsidy, provided through a targeted public distribution system, will see its budget slashed by 32 per cent as the government proposes reducing spending from an estimated Rs 2.87 trillion this year to Rs 1.97 trillion in the new fiscal year starting on 1 April.

The budget for the Mahatma Gandhi National Rural Employment Guarantee Act MGNREGA) has been cut by 30 per cent. The finance minister proposes reducing funding from Rs 8.95 trillion to Rs 6 trillion the lowest in more than five years.

While Modi’s ruling Bharatiya Janata Party BJP) hailed the budget as an important step towards all-inclusive growth, activists and opposition politicians said it failed to address the needs of the poor and rising unemployment in the country.