Social sector allocations lower only on paper, no beneficiaries left out, says CEA

Chief Economic Advisor V Anantha Nageswaran has said that the allocation for Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) Scheme in the 2023-24 Budget has come down (to ₹60,000 crore from ₹68,000 crore the previous year) only on paper, as in reality, every eligible beneficiary will continue to enjoy its benefits. “The database has been cleaned up, ineligible beneficiaries have been eliminated. No deserving beneficiary will go without PM Kisan payment. On paper, it has come down, but the reason for that is updated data,” he says.

Speaking at the 17th 5-Institute Budget Seminar 2023 in the National Council of Applied Economic Research (NCAER) on February 6, Nageswaran said while the allocations for various centrally-sponsored projects may have gone down in the last few years, the money going into the hands of the beneficiaries has doubled because the systems have been streamlined, leakages have been plugged, outputs are improving, and the process of identifying beneficiaries has been successfully and efficiently implemented.

On the allocation towards health for 2023-24, Nageswaran said that in 2021-22, about ₹35,000 crore was set aside only towards Covid-19 vaccination expenses. Excluding the one-time allocation towards vaccines, allocation towards health expenditure that year was only ₹48,000 crore. “So from ₹48,000 crore in 2021-22, it has gone up to ₹86,000 crore in 2023-24. It is important to remember two things. We are working to make sure that outcomes are improved all the time, and leakages are plugged, and that is what direct benefit transfer has achieved over the years. Allocations do take into account evolving economic circumstances and we need to continue to focus on outcomes as well,” he said.

Nageswaran also defended the government’s decision to cut the allocation towards the Mahatma Gandhi National Rural Employment Guarantee (MGNREG) Programme from ₹73,000 crore in 2022-23 budget estimates to ₹60,000 crore for FY24. He explained the government’s rationale for expecting less demand for jobs under the job guarantee scheme as other projects that will create jobs for the same target groups have seen higher allocation. “You look at the allocation to PM Awas Yojana (Rural), it is 172% higher than the budget estimate for 2022-23. The same goes for Jal Jeevan Mission as well. You can’t build affordable homes or continue with the Jal Jeevan Mission without having rural workers participate in that initiative. The assumption is that much of the labour (which otherwise would have demanded jobs under MGNREG) will be absorbed in these programmes and therefore the demand for rural wage guarantee will come down. And the second assumption is that as the economy continues to steady itself, then some of the rural labour will be absorbed into urban construction projects etc., leading to lower demand for wage guarantee programme,” Nageswaran said.

The post-budget seminar was brought together by five economic think tanks – NCAER, the Centre for Policy Research (CPR), the Indian Council for Research on International Economic Relations (ICRIER), the India Development Foundation (IDF), and the National Institute of Public Finance and Policy (NIPFP). The speakers at the 17th edition of the Budget seminar included Poonam Gupta from NCAER, Deepak Mishra from ICRIER, Nishant Chadha from IDF, R. Kavita Rao from NIPFP, and Yamini Aiyar from CPR.