Date: 15/05/2023

Relevance: GS-2: Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes.

Key Phrases: Welfare Schemes, National Family Health Survey, Ministry of Women and child development, Welfare State, Anganwadi programme (ICDS), Ministry of Home Affairs, POSHAN Abhiyaan.

Context:

• The Union Budget of 2023 was criticized by experts over a decline in allocations for welfare schemes in real terms, at a time of post-COVID-19 recovery when welfare spending should have been a priority.

Key Highlights:

• Over the past three years, over 50% of existing central government sponsored schemes have been discontinued, subsumed, revamped or rationalized into other schemes.
• The analysis based on Budget papers shows that the trend of declining central government spending on critical social schemes is not new, having begun in 2014 with NDA Govt.
  • Since then, central allocations for welfare schemes and sectors that ensure basic rights have declined as a proportion of GDP.

Discontinued, subsumed or revamped Welfare Scheme:

• Schemes under Ministry of Women and Child Development:
  • There are just three schemes now out of 19 schemes, i.e., Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0. Mission Shakti itself replaced 14 schemes which included the ‘Beti Bachao, Beti Padhao’ scheme.
  • Saksham Anganwadi and Poshan 2.0 aims to address child malnutrition and hunger.
    • From 2021-22, the Anganwadi programme (ICDS) was merged with POSHAN Abhiyaan and a nutrition scheme for adolescent girls.
    • Even with more components, its allocation went down from 0.13% of GDP in 2014-15 to 0.07% in 2023-24 — almost half of what it was.
• According to National Family Health Survey (NFHS)-5 data, the percentage of anaemic, underweight and stunted children in India is 67%, 32% and 36%, respectively, which is among the worst in the world.
  • Yet, funds meant to address malnutrition are being slashed with abandon.
• Schemes under Ministry of Agriculture and Farmers’ Welfare:
  • There are now three out of 20 (Krishonnati Yojana, Integrated Scheme on Agricultural Cooperatives and the Rashtriya Krishi Vikas Yojana).
• Schemes under Ministry of Animal Husbandry and Dairy:
  • Now just two schemes remain out of 12.
    • The Ministry has ended three schemes which include National Dairy Plan II, Dairying through Cooperatives etc.

Reduction in the Allocation for the Schemes:

• Mid-day meal (MDM) Scheme:
  • It is a nutrition scheme, covering almost 12 crore children.
    • Evidence shows that the scheme has led to an improvement in class attendance, learning as well as nutritional outcomes and reduced stunting in children.
    • However, the Budget allocation for MDM decreased by 50% as a share of GDP, from 0.08% in 2014-15 to 0.04% in 2023-2024.
    • In 2021 the Ministry of Finance rejected a breakfast at school plan citing funds constraints, a plan that has shown promising results in Tamil Nadu within a year.
• MGNREGA and NFSA:
  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and NFSA (Food Subsidy) have declined as a share of GDP since 2014.
  • MGNREGA guarantees 100 days of employment to every rural household whereas the NFSA provides subsidized grains to over 80 crore people.
  • MGNREGA expenditure as a share of GDP went from 0.26% in 2014-15 to 0.20% in 2023-24.
    • For NFSA it went to 0.65% this year from 0.94% in 2014-15.
    • The Economic Survey 2022-23 has highlighted that demand for the scheme was higher than pre-pandemic levels as rural distress continues.
    • Anecdotal cases show that actual funding disbursal for MGNREGA has often been delayed, leading to a decline in confidence in the scheme.
  • As experts point out, MGNREGA and the Public Distribution System were key to averting disaster during the pandemic.
    • Both schemes saw record demand in 2020-21; MGNREGA saw 8.55 crore households avail employment, while Public Distribution System (PDS) grain offtake was 93 million tonnes, leading to an expenditure of 2.73% and 0.56% of GDP on NFSA and MGNREGA, respectively.
    • However, since 2020-21, NFSA and MGNREGA allocations have declined rapidly as a share of GDP.
• National Social Assistance Programme (NSAP):
  • The National Social Assistance Programme (NSAP) is a scheme that provides pensions to the elderly, widows, and disabled individuals below the poverty line and monetary assistance to families that have lost a breadwinner.
  • As a share of GDP, its allocations went down from 0.06% in 2014-15 to 0.03% in 2023-24.
    • The share steadily declined over this period except for 2020-21 when it was 0.21% with COVID relief in cash included in the NSAP.
• PM Matru Vandana Yojana (PMMVY):
  • It provides maternity benefits as a conditional cash transfer of ₹5,000 to women in the unorganized sector.
  • To cover all women and births as per the National Food Security Act (NFSA) mandate, the scheme needs around ₹14,000 crore, but the PMMVY Budget is yet to cross ₹3,000 crore.

Reasons behind the Actions:

• There are challenges such as funding cuts, disbursement and utilization of funds.
  • As of June 2022, ₹1.2 lakh crore of funds meant for central government sponsored schemes are with banks which earn interest income for the Centre.
• Non Utilisation of allocated funds is also another reason:
  • For instance, the Nirbhaya fund (2013) with its focus on funding projects to improve the public safety of women in public spaces and encourage their participation in economic and social activities is an interesting case.
    • ₹1,000 crore was allocated to the fund annually (2013-16), and remained largely unspent.
    • As of FY2122, approximately ₹6,214 crore was allocated to the Nirbhaya fund since its launch, but only ₹4,138 crore was disbursed.

Way Forward:

• As the economist, Jean Drèze, highlighted recently, real wages of casual workers grew at less than 1% per year from 2014-15 to 2021-22 according to Reserve Bank of India data.
  • Prof. Drèze argues that this worrying trend calls for a reorientation of economic policies, with a sharper focus on drivers of wage growth.
• Our public services require more doctors, teachers, engineers and fewer data entry clerks.
  • We need to build capacity for an efficient civil service to meet today’s challenges, for example, providing a corruption free welfare system, running a modern economy and providing better public goods.

Conclusion:

• Rather than downsizing government schemes and cutting their funding, the aim should be towards ensuring better public service delivery.

Source: The Hindu

Mains Question:

Q. What are the major reasons for continuous decline in spending on various welfare schemes? How can the government rationalize its spending on welfare schemes? (150 Words).