The Modi Government and Rural Poor

The Modi Government and Rural Poor

Veeraiah Konduri

The Constitution of India guarantees socioeconomic security to the people of India. Directive Principles of State Policy elaborately prescribed the objectives of social security and prescribed measures for same. Since then, these directives guides the overall policies that are being implemented by the successive governments.

Article 38 of the Constitution mandates the governments, " (1) The State shall strive to promote

the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. (2) The State shall, in particular, strive to minimize the inequalities in income, and endeavor to eliminate inequalities in status, facilities and opportunities not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations." with an objective " to secure a social order for the promotion of welfare of the people." Similarly, Article 47 of the Constitution says that it is the duty of State to raise the level of nutrition, standards of living of its people and improve public health. Specifically, Article 45 of the Constitution establishes the guiding principle of Integrated Child Development Scheme when it says, "Provision for early childhood care and education to children below the age of six years. "Given the need for employment, the  Directive Principles have made a special mention of this. Article 41 focuses on Right to work as an important principle which should govern the policies of the States. Article 41 says, "The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want."

The governments since 1991 paid scanty attention towards the necessity of socio-economic security as envisaged by the Constitution. The Modi led BJP’s defiance of Gandhi whose ideals shaped the Directive Principles and Ambedkar who drafted these ideals into rights, is well known. The BJP government, in its first full budget started destroying the socio-economic security guaranteed by the Constitution of India.

The NDA Government presented its first full budget for 2015-16 financial year. The interim budget presented in June 2014 can be considered as joint venture between UPA-II and NDA. This budget is prepared solely after NDA had its fullest command over the finances of the country during last year. Reflecting its command over the economy, the budget presentation began by saying that under dynamic Modi leadership they could give new direction to the nation’s economy. The Central Statistical Organisation’s revised estimates are being shown as a proof for strong revival of economy. Also he announced that we are only the country that even surpassed China in growth rate and poised achieve 10 percent growth rate within no time. This the government wants to achieve this growth at the cost of its people. It is evident from the reduced allocations for almost all the social security schemes and programs. India, approaching it Amrit Mahotsav of independence in 2022 still predominantly lives in villages. Agriculture is back bone for the rural economy which is catering the bare minimum needs for morethan two thirds of its population. The policy makers with neoliberal mind set neglected the constitutional mandate of providing social security to its people. We are talking about the social security not merely in terms of welfare schemes such as pensions and PDS. The social security in our understanding includes food security, employment security and social security in traditional sense. Let us consider the budget implications and future policy directions in this budget on all these three counts.

The slogan of minimum government and maximum governance attracted several new segments including some sections of first time voters who had bitter experience with the government authorities on various occasions. But we need to remind that the rural India as a whole having bitter experiences with the authorities since independence. The roots of these bitter experiences are in the policy prescriptions of the government but not in the individual functioning styles of few officials. The same reflected even after the BJP government came to power. The focus of policy direction has been shifted from rural India to urban, that too cosmopolitan landscape to be more precise. Thus the present budget provides minimum attention both at the level of policy and in terms of budget to several several social security schemes. These schemes are intended to deliver minimum relief to the rural poor. The attention towards welfare schemes and subsidies meant for Integrated Child Development Scheme (ICDS), Public Distribution System(PDS), fertilizer subsidy, subsidized gas cylinders, national social assistance program, Indira Avas Yojana (IAY) , sanitation, rural drinking water, rural roads and other several other programs and schemes are being considered as non priority areas. It is unfortunate that at a time when nearly about 16 lakhs children under 5 years age group are dying due to malnutrition, the central government cut down the budget for Integrated Child Development Scheme (ICDS) to half from its last year allocations.

The government claims that due to 14th Finance Commission recommendations, large amounts of funds have been transferred to states, now the responsibility of implementing these schemes are left to the state governments. It is to be noted that even after such a high pitch campaign of center transferring more funds to state governments, the actual transfers have been reduced from 6.2 % of GDP to 5.9 % of GDP between 2014-15 and 2015-16. This in fact compounds the problems of state governments by imposing new burdens on them. The union government cancelled 8 schemes and reduced budgetary support for another 24 schemes. Implementation of remaining schemes becomes state government’s responsibility.

In the mean time the funds earmarked for such schemes will be transferred to state gvernment’s kitty where they will be having discretion in utilizing these funds. All these schemes were formulated after a well laid out thought process and expert consultation to bridge the gaps in development. But the government that does not care much for such gaps in development which will fuel inequality distancing itself from this responsibility of ensuring social security. Moreover after transferring these schemes and their funds to the shoulders of state governments, the central government is not going to share the cost of revenue expenditure such as staff salaries. For any social security scheme, the expenditure will be considered as plan expenditure at the conceptualization stage and for few years till the systems are in place for its proper implementation. Once the scheme is in place for some years, then majority of the expenditure on that particular scheme becomes revenue expenditure, a kind of recurring expenditure. As on now, meeting this expenditure is the responsibility of central government. Not sharing this recurring expenditure by center means, the burden of implementing or discontinuing the said scheme purely lies on the stat e governments. Now let us consider the three key pillars of social security and their allotments in the budget. The first pillar is job security for the rural poor. The government’s attitude towards this major flagship program had been kept on changing since its inception.

During the tenure of UPA – 2, the MNREGA’s potential impact became evident on the rural economy and also at the same time the ruling class that commands rural India started annoyed with the fact that the MNREGA became a powerful tool in granting self respect to agricultural workers. It also facilitated the agricultural workers to demand for their legal wages and the rich farmers are forced to increase a portion of wages for agricultural workers. Not only that. Before the introduction of MNREGA, the rural poor are forced to migrate to urban centers in search of work at sub-minimum wages just to save their children from half empty stomachs. Thus the urban economic actors used to get the uninterrupted supply of man power at cheapest rates. Because of this low cost of labour power only, the present government under Modi inviting foreign companies to come to India not only to exploit the rich natural resources but also to exploit numerically strong labour power at fraction of wages. This is the rational behind the Make in India slogan.

But this situation had undergone a change with the implementation of MNREGA. As the MNREGA guarantees the employment with in their home village, rural workers reluctant to work for paltry payments in far off locations. Thus those sectors which are banking on the cheapest labour power are now facing constraints on their profits. Thus the ruling class alliance, both in rural India and urban India came together to scuttle the job guarantee program. This is evident from official data itself. The Act generated employment for 5,25,30,453 households in 2009 where as the same came down to 3,94,76552 which means during the last five years, the number beneficiary households came down by a whopping 1, 30, 53, 901 ! Average days of employment generated for each household under the Act came down drastically from 53.99 in 2009-10 to 37.74 days in 2014-15. Similarly the percentage of SC beneficiaries came down from 30.48 % in 2009-10 to 22.52 % in 2014-15. More interestingly the Outcome budget submitted by the Ministry of Rural Development to Parliament indicates that of the total allocations, Rs. 18,333.95 crores left unspent in 2010-11 financial year where as the unspent amount from MNREGA allocations stood at Rs. 14,545.47 crores by 2012-13 financial year. Even in 2014-15 financial year Rs. 4406.31 crores left unspent. The number of person days generated came down from 230.41 crores in 2012-13 to 164.11 crore days in 2014-15. The number of villages with nill expenditure under MNREGA program also went up from 25,155 to 31939 during the same period. This is how the ruling class started scuttling and diluting the premier employment security providing program MNREGA.

Let us consider the food security aspect during the last five years. It is clear that the National Food Security Act (NFSA) is yet to deliver its intended benefits to the eligible poor despite it was adopted by the Parliament two years back. The Act is officially under implementation only in 11 states that too without proper infrastructure for successful delivery of services. Though the last two years’ annual budgets are having provision for fund to implement NFSA, on the ground already existing targeted public distribution system also getting a raw deal from the governments. According to the Department related Parliamentary Standing Committee on Food and Consumer Affairs, and Public Distribution system, the total coverage under targeted public distribution system is limited to mere 65 % of beneficiaries where as the officially recognized number of BPL families are fare more than that. To implement the NFSA needs budgetary allocation of Rs. 1,31,086 crore where as the allocations for the financial year 2014-15 stands at Rs. 100505 crore, which is almost 25 % less than the requirement. The fund shortage for food security during 2012-13 stood at Rs. 32,743 crores. The Standing Committee itself found that shortage of funds for food subsidy rose from Rs. 32,743 crore in 2012- 13 to Rs. 53,458 crore in 2013-14 and may go upto Rs. 60,730 crore in current year.  It is in this situation, the BJP government at the center appointed a high level committee under the chairmanship of former union minister for food and public distribution, Mr. Shanta Kumar who recommended for dismantling of the Food Corporation of India altogether, which is the back bone for country’s food security. The high level committee also recommended not to implement the National Food Security Act at its present form as it involves huge sums of subsidy. The WTO demands to de-regulate the agricultural produces market in third world countries. Accordingly the government preparing ground for meeting such commitments given to community of international financial capital. Financial constraint is not the real reason behind such recommendation. While on one hand, precious public money is being doled out to the corporate sector by way of tax concessions, it became a fashion for every one to criticize the social security schemes. With this kind of understanding towards the country’s food security, the government is trying its best to push the country to pre 1960’s era where in the nation experienced hunger deaths and roots of rural distress. This only will lead to dismantle the food security the country achieved at the cost of sweat and blood of farmers and agricultural workers of this country.

Finally let us consider third aspect of social security. This includes several schemes that are of income substitution and expenditure substitution in nature. The two key pillars above mentioned are completely different from the third set of schemes. Above mentioned two pillars are ensuring right to work and right to food irrespective of the caste, creed, gender, region and religion, APL/BPL differentiation. Also these two social and economic security measures are backed by law and the governments can not tweak at their will. Unlike these two, the income substituting and expenditure substituting schemes such as National Rural Livelihood Mission, formerly known as Sampoorn Gram Swarojgar Yojana, Indira Avas Yojana, Pradhan Mantri Gram Sadak Yojnana, National Old Age Pension schemes, Disability pension schemes and other such schemes. These are all being implemented at the will of governments’ of the day. The budgetary allocations are not being fully utilized. As we have shown in this bulletin, Rs. 9954 crores left unspent for the financial year 2010-11 for just three schemes, SGSY, IAY and PMGSY where as this amount went up to Rs. 12824 crores for the year 2012-13 and stands around Rs. 9516 crores left unutilized. Within this budget the allocations for old age pensions have been reduced by one thousand crores. Not only that. The government proposed to change IAY is being changed into repayment based model from subsidy/ grant based model. Thus the government is tweaking with all these income and expenditure substitution schemes which will impose larger burdens on the rural poor and agricultural workers. More over the government asking the  corporate sector to share its social responsibility by spending peanuts from their profits. Already 124 villages have been adopted by Tata Trust in Krishna districts of Andhra Pradesh. In such villages, the role of Panchayati Raj institutions becomes irrelevant.This is the dangerous trend that is creeping into the policy making and participatory democracy. Already the central government is shifting its constitutional responsibility to the discretionary authority of states. It is withdrawing itself from legally backed social security programs whose implementation solely lies on the shoulder of central government. Thus the government wants to dismantle the existing structures to mitigate the inequality. The programs such as MNREGA are primarily oriented towards addressing the structural inequalities and marginalization. All this is going for a toss under NDA government. Thus the BJP government laying foundations for triple insecurities – employment insecurity, food insecurity and social insecurity. This is in this context we need to build the movement for social security. The aims of this movement shall be to strengthen the legally backed rights for their fullest possible implementation and the expand the base of income/expenditure substitution based schemes with more funds.