Every finance minister (FM) will boast that his/her government has the poor at the centre of its policies and programmes. That is fair because there is a significant proportion of the population of India that is poor. Estimates may vary, but taking into account only a few indicators — per capita income, unemployment, food consumption, housing and sanitation — the proportion that can be classified as poor will be between 25-40 per cent in different states.
The pandemic years (2020-22), the persisting inflation (CPI inflation 6.52 per cent) and unemployment (Urban 8.1 per cent, Rural 7.6 per cent) have only made the situation worse. The start of 2023 has been ominous. Big companies are laying off employees in the thousands. High unemployment rates are creeping into the educated middle class, too.
Who are the Poor?
Growing inequality in India has exposed many truths. According to the Oxfam report, the wealthiest 5 per cent in India own more than 60 per cent of the country’s total wealth while the bottom 50 per cent own just 3 per cent of the wealth. In their Inequality Report 2022, Chancel, Piketty and others estimated that the bottom 50 per cent got only 13 per cent of the national income. The top 5 to 10 per cent (7 to 14 crore people) flaunt their wealth, spend and consume, which gives the ‘shine’ to the market. (The annual production in India of Lamborghinis is sold out for 2023 and the company is accepting only orders for delivery in 2024. The lowest priced model in India costs Rs 3.15 crore, ex-showroom.) They are the ultra-rich. The bottom 50 per cent includes the poor.
According to CMIE, the Total Labour Force in India is 43 crore. Of them, the proportion that is currently employed or looking for employment is 42.23 per cent, which is one of the lowest in the world. 7.8 per cent of all households (roughly (2.1 crore households) have no employed person. 30 per cent of employed (roughly 13 crore) are daily wage labour. The median monthly household consumption expenditure is Rs 11,000. These households are the poor.
The government’s National Family Health Survey-5 revealed that of women in the age group 15-49, a majority (57 per cent) were anaemic. Only 11.3 per cent of children aged 6-23 months received an adequate diet. The proportions of children who were underweight (32.1 per cent), stunted (35.5), wasted (19,3) and severely wasted (7.7) were alarmingly high. These sections do not get enough food. They are the poor.
Budget punishes Poor
Now, ask the authors of Budget 2023-24 what they have done for the poor, what they have done for the bottom 50 per cent of the population, what they have done for the unemployed and what they have done for those who do not get enough food. The answers are in the numbers in the Budget documents. Sample some:
Under key heads that would have created jobs for the poor as well as brought them relief, the allocated funds were not spent during the course of 2022-23:
Allocations at the start of the year are irrelevant if what is spent by the end of the year is significantly less than what was allocated. The poor have been short-changed.
Going forward to 2023-24, there is no evidence of a change of approach:
Hit in the Belly
It is only if the allocated amount is spent that jobs will be created or welfare benefits will accrue. Besides, any allocation which is seemingly more than the allocation in the previous year has to be adjusted for inflation and, in many cases, it will be found that the allocation is actually less. Every programme which directly benefits the poor has been given less money and, adjusted for inflation, it will be even less. Add to the above, there is no cut in GST (64 per cent of the total collections come from the bottom 50 per cent). There is no reduction in the tax on, or the price of, petrol, diesel and LPG. It is as if the FM is blissfully unaware of post-pandemic rise in poverty, inequality, unemployment, lay-offs, malnutrition, anaemia and child-stunting and child-wasting.
Is there any surprise that in the 90-minute speech, the FM mentioned the word ‘poor’ just twice? There is a Tamil proverb that describes the budget best: it hit the poor in the belly.
