EDITORIAL ANALYSIS : Social security and the story of two Budgets

Source: The Hindu

• Prelims: Indian Economy(GDP, GVA, fiscal policy, budget, economic survey, budget, Employment etc )
• Mains GS Paper III: Fiscal policy, Monetary policy, GDP, Issues related to planning etc.

ARTICLE HIGHLIGHTS

• In budget 2023-24, the Finance Minister asserted that ‘since 2014, the central government has ensured a better quality of life, and a life of dignity’ for all its citizens.

INSIGHTS ON THE ISSUE

Context

Budget:

• The government’s blueprint on:
  • expenditure
  • taxes it plans to levy
  • other transactions which affect the economy and lives of citizens.
• Article 112 of the Indian Constitution: Union Budget of a year is referred to as the Annual Financial Statement (AFS).
• The Budget Division of the Department of Economic Affairs in the Finance Ministry is the nodal body responsible for preparing the Budget.
• Components of the Budget:
  • expenditure
  • receipts
  • deficit indicators.
• Depending on the manner in which they are defined, there can be many classifications and indicators of expenditure, receipts and deficits.

Issues in Budget figures:

• Severe cuts in various social security and welfare schemes such as food security and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• Elderly and other social security pensioners: social security pensions under the centrally sponsored National Social Assistance Programme (NSAP),
  • It has remained frozen at a low sum of ₹200 for the elderly and ₹300 per month for widows and persons with disabilities.
• Only those who appear on the obsolete and discredited Below Poverty Line (BPL) lists prepared as in Census 2001 are given pensions.
• The budget for the NSAP has remained constant, at approximately ₹9,000 crore, and is steadily reducing in real terms.
  • This year, the NSAP saw a reduction of ₹16 crore.

Case of Rajasthan budget:

• Minimum Income Guarantee and Pension law to be enacted in the State, providing 125 days of work through the rural or urban employment guarantee.
• Minimum social security pension of ₹1,000 per month, with an automatic increase of 15% per annum.

NSAP:

• It is a centrally sponsored social security scheme that provides non-contributory income security to the elderly, widows, and persons with disabilities from “BPL families”.
• Three mains schemes under this programme:
  • Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
  • Indira Gandhi National Widow Pension Scheme (IGNWPS)
  • Indira Gandhi National Disability Pension Scheme (IGNDPS),
  • The central government’s contribution has remained the same over the last 15 years.
• The percentage share allotted to NSAP of the total expenditure budget has steadily declined from 58(zero point five eight)% in FY 2014-15(BE) to 0.21(zero point two one)% in the current budget (FY 2023-24).
• State governments are encouraged to match the amount as the central contribution under the NSAP’s guidelines.

Issues with the scheme:

• Failure to index social sector expenditure to inflation has led to the even greater marginalization of vulnerable people.
• Central assistance to States/Union Territories under NSAP is determined based on the BPL population of the State.
• For calculating the estimated number of beneficiaries The central government relies on the population figures of Census 2001.
• Stringent criteria of providing disability pensions only to those with a disability level of 80% or more.

Changes done by Rajasthan:

• The Rajasthan government changed its eligibility criteria making economically vulnerable women above 55, and men above 58 eligible for old-age pension.
• It permitted widows with adult children to receive a widow pension
• Disability: Included anyone with more than 40% disability to receive a disability pension.
• The number of social security pensioners in the State grew from 14 lakh to 58 lakh.

Initiatives for elderly population:

Way Forward

• Other States and the Government of India should follow the example of Rajasthan and take the necessary steps to change their existing schemes into an Act
  • Provides more credible entitlements, strengthens accountability, and offers the same legal protection as other welfare laws.
• The Central government must recognise that pension is a right for work done by unorganized sector workers, who are contributing seminally to the GDP and economy all their lives.
• This rights-based approach is not based on charity, but on the recognition of the right to ensure minimum conditions for workers to live their retired lives with dignity.
• For the vulnerable working people, rights-based entitlements provide a measure of dignified living which should be the objective of any democracy, regardless of the immediate electoral implications.

QUESTION FOR PRACTICE

Q. Explain intergenerational and intragenerational issues of equity from the perspective of inclusive growth and sustainable growth.(UPSC 2020) (200 WORDS, 10 MARKS)