Written by Tejal Johri
Budget for FY22 presented; Union Finance Minister announces a portal for data on migrant workers; a pre-budget survey highlights the sectors where Indian citizens feel social protection policies can be strengthened; Economic Survey 2021 proposes hiking central issue prices of foodgrains
Union Finance Minister Nirmala Sitharaman presented the Budget for FY22 in the Parliament on February 1, 2021 and it is being hailed as pro-growth and a step in the right direction by experts. The main focus of the Budget is on health and well-being, physical, financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance. As the FM revealed that the fiscal deficit has trebled over the last year, the Centre’s approach has moved right-of-Centre with regards to the economy as public sector banks and insurance companies would be sold off, instead of ramping up subsidy allocations as was expected. Agriculture, rural employment and education have witnessed deep cuts in spending. Notably, the funds for NREGA labourers have been slashed and allocations for ICDS, midday meals and maternity entitlements reduced. Commenting on the allocation cuts, the Right to Food Campaign said that the Centre has abdicated responsibility in ensuring social protection.
To provide relief to the unorganised labour force, Finance Minister Nirmala Sitharaman has proposed launching a portal that will gather and store important information on gig, building, and construction workers, among others. In her words, it will “help formulate health, housing, skill, insurance, credit, and food schemes for migrant workers”.
A pre-budget survey of 1,451 respondents across 24 States in India by Fight Inequality Alliance India -- a group of NGOs, rights' groups and campaigners has found that 95% of people surveyed want minimum wages and insurances for anganwadi and ASHA workers, 88% want an urban employment guarantee scheme (up to 96% for urban Muslims), 87% wish universalisation of PDS and 97% desire universal minimum social security. 87% respondents also desire free COVID vaccination for all. Meanwhile, the PDS Chamber of Commerce and Industry has recommended the government to come up with well-designed social protection policies for the vulnerable sections in India.
The Ministry of Finance’s Economic Survey 2021 has proposed hiking the central issue price of wheat, rice and coarse grains in order to reduce the food subsidy bill. The central issue price has not been revised since the National Food Security Act (NFSA) came into place in 2013, even though the economic cost has been updated several times over the years.
Food subsidy bill approaches Rs. 6 lakh cores; Delhi and Andhra Pradesh to start doorstep delivery of PDS ration; Telangana replaces biometric authentication with mobile-OTP system; Tamil Nadu and J&K face biometric issues; Karnataka to distribute jowar, red gram, green gram and ragi under PDS; West Bengal increases license renewal period of ration shop dealers; UP and Himachal simultaneously focus on computerization in PDS; Maharashtra to detect and cancel illegal rationcards in a special drive
The food subsidy bill for FY 2021 nears Rs. 6 lakh crores, which is a 2.5 fold jump from the initial budget estimates. Most of the expenditure has been attributed to the Central government’s free food distribution during April-November 2020 in the wake of the pandemic. In addition, dry ration was also distributed to migrant workers.
A rapid response survey involving 1,267 respondents as conducted by the Delhi Commission for Protection of Child Rights (DCPCR) in January on distribution of dry ration from anganwadis found that 85% of beneficiaries have received their Take Home Ration(THR) entitlements. Meanwhile, the Delhi Rozi Roti Adhikhar Abhiyaan (DRRAA) has written to the Chief Minister Arvind Kejriwal expressing concerns over the soon-to-be-launched doorstep delivery of ration scheme in Delhi, highlighting that without proper protocols and monitoring mechanisms, there is a risk of less transparency and more corruption. This comes at a time when Delhi Chief Minister Arvind Kejriwal has announced that the AAP government will initiate the doorstep delivery scheme from March 2021.
The Andhra Pradesh government announced the start of doorstep delivery of PDS rice from February 1. Earlier, the State Election Commission (SEC) had asked the State government not to go ahead with doorstep delivery, resulting in the State government filing a petition with the court. AP High Court has since asked the State government to explain the importance of doorstep delivery to the SEC. Recently, doorstep delivery has started in urban areas of Krishna district.
In order to prevent the spread of the virus in the pandemic, the Telangana government has decided to replace biometric authentication via ePoS machines with an OTP system on the mobile numbers linked to the Aadhaar cards of beneficiaries. PDS beneficiaries have been informed to update their mobile numbers at eSEVA or MEESEVA centres before the policy is rolled out on 1st February. Telangana is the first state to implement this rule and the Telangana State Food Commission has directed the Food and Civil Supplies Department to ensure that no cardholder is bereft of their entitlements, after receiving complaints from civil society organisations.
This comes at a time when the district authorities of Tamil Nadu are planning to seek relaxation from biometrics to be able to smoothly distribute essential commodities under PDS. In addition, J&K faces severe biometric issues unique to the region, since security forces have installed jammers which prevent the internet from working and where cold temperatures and power cuts create charging problems in ePoS machines.
The Karnataka government has decided to distribute jowar, red gram, green gram and ragi under PDS from April in order to improve nutritional consumption of beneficiaries under PDS. There are also plans to introduce jaggery produced in the region Mandya at a subsidized cost in the PDS, for which a response is pending from the Chief Minister. Meanwhile, the Tamil Nadu government is considering distributing palm products like palm jaggery and palm sugar and the Uttar Pradesh government is planning for fortified rice to be distributed under PDS.
In order to acknowledge the frontline work done by ration shop owners during the pandemic, the West Bengal government has announced increasing the license renewal period of ration shop dealers to from one year to three years and reducing working capital needed from Rs. 5 lakh to Rs. 2 lakh, with an additional assistance of Rs. 2 lakh if the ration shop dealer dies on duty.
The Uttar Pradesh government has recently digitized data of all beneficiaries in the PDS and set up the online ration card management system to automate the food distribution process. Transaction data from Fair Price Shops is also currently being digitized in both rural and urban areas. Parallelly, the Himachal Pradesh government is also planning end-to-end computerisation and automation of the food distribution system under PDS. Maharashtra government is one step ahead, as the Food and Civil Supplies Department is using their already digitized data to initiate a special drive from February to detect illegal rationcard holders and to cancel the cards.
One Nation One Rationcard Scheme to be scrutinized by a parliamentary panel; 32 States and Union Territories now under ONORC as Andaman & Nicobar join the scheme;Tamil Nadu becomes the 11th State to fulfill ONORC reforms and become eligible for additional borrowings
ONORC scheme will be scrutinized by a parliamentary panel as Opposition leaders get ready to raise gaps in implementation and the efficiency of PDS. This comes at a time when the Centre is being urged not to rush on the implementation, given still many Fair Price Shops remain without ePoS devices.
Andaman & Nicobar Islands kickstarted the ONORC scheme from November 30th, with a plan to introduce the scheme in all FPS by December 15th 2020. Currently 32 States and Union Territories are under ONORC, with a reach of 69 crore beneficiaries.
Tamil Nadu becomes the 11th State to complete ONORC reforms and becomes eligible for additional financial resources of Rs. 4,813 crores through Open Market Borrowings. The State government received permission for additional borrowings by the Department of Expenditure, Government of India.
Centre’s focus moves to digital delivery in India; Rethink Aadhaar campaign highlights the increasing frequency of scams with Aadhaar-linked DBT; Centre introduces production-linked incentive DBT scheme; Karnataka to disburge age-old pensions through DBT; Madhya Pradesh first State to disburse power subsidy through DBT; West Bengal announces DBT transfer to children for online learning; Assam initiates the ‘Orundoi’ scheme
Building on the momentum from JAM and DBT, the Centre’s focus has now shifted to digital delivery in order to encourage financial inclusion in India. Centre has also introduced a production-linked incentive (PIL) DBT scheme where manufacturers who create and then sell/export goods up to Rs. 100 crore will get Rs. 5 crore from the government as a reward. Meanwhile, the Rethink Aadhaar campaign has published a report that highlights how easy scams have been with Aadhaar-linked DBT. The main concern is that people are unaware of when and how their personal details are used to divert payments. The problem is exacerbated by the fact that the Aadhaar number is arbitrarily linked to the last bank account of a person, making it difficult to verify whose account it is. This comes at a time when about 5.5 lakh ineligible beneficiaries have been found in Tamil Nadu’s PM Kisan Scheme, resulting in a loss of Rs. 110 crores. The accused used publicly available Aadhaar information to register for the schemes. Surprisingly though, the Opposition Party has also asked for more cash transfers in the social protection schemes of India.
Many State governments have also recently introduced new cash transfers in their social protection schemes. The Karnataka government has decided to disburse age-old pensions through DBT, with people above 60 automatically being cleared for pensions given their Aadhaar and income certificate information. Madhya Pradesh became the first State to disburse power subsidy through DBT and fulfilling this reform condition allows the State to make additional borrowings from the Centre. The West Bengal government has announced a DBT of Rs. 10,000 for each child enrolled in class XII to help them buy tablets or smartphones for online learning. Meanwhile, the Andhra Pradesh government has offered students from class IX to XII laptops in lieu of DBT. Assam has started the ‘Orundoi’ scheme to 17 lakh beneficiary households at the moment where Rs. 830 will be transferred every month to a female in the household. The coverage is expected to increase to 22 lakh families with time.
Niti Aayog’s report highlights the gaps in implementation of Poshan Abhiyan; Mission Poshan 2.0 launched and supplementary nutritional schemes merged; Budget cuts in ICDS shock public health experts
Niti Aayog’s monitoring and evaluation unit has come out with a report that highlights the challenges that the delivery mechanisms of National Health Mission (NHM) and Integrated Child Development Services (ICDS) have, especially the fact that delivery is not reaching as many women and children in high burden States as desired and the overall reach is wanting even in model regions. The report indicates that the main interventions through ICDS like Take-Home Ration (THR) and growth-monitoring need quality improvements and stresses on the need to move to a Poshan plus strategy to tackle malnutrition more effectively.
Meanwhile, The Ministry of Women and Child Development(WCD) has received a 16 percent increase in its budget allocation this year, amounting to Rs. 24,435 crores. The Union Finance Minister has however announced that supplementary nutritional schemes will be merged with Poshan Abhiyan as part of Mission Poshan 2.0. Poshan 2.0 now combines ICDS, Anganwadi services, Poshan Abhiyan, Scheme For Adolescent Girls and National Creche Scheme and the Budget for the main nutritional program ICDS has been cut by over Rs. 5,000 crore. This has come as a shock for public health experts given the National Family Health Survey done in 2019-20 revealed an increase in children under five suffering from malnutrition.
Fertilizer subsidy may cross Rs. 1 trillion next fiscal; Centre may introduce DBT for fertilizer subsidies; Union FM commits to the MSP system and announces support to APMC; Bihar farmers who burnt crop residue to be denied DBT benefits
As the fertilizer subsidy may cross Rs. 1 trillion in the next fiscal after clearing the backlog of producers, The Department of Fertilisers and the Ministry of Agriculture are working out the details for the ambitious DBT in fertilizer subsidy scheme, which is likely to be announced in the Budget of FY22 and is expected to reach 140 million farmers in the country.
The Budget has focused on existing infrastructure gaps in agriculture as well as credit and investments. Assuring the continuation of the MSP regime, the Union FM has announced the use of a Rs. 1 lakh cores infrastructure fund for the development of state-controlled mandis. The major cut in the ministry’s budget is being attributed to lower spending in the PM-Kisan scheme. Reportedly, farmers will still continue to get Rs. 6,000 per annum under the scheme.
Around 900 farmers in Bihar who have disregarded the government’s order to not burn crop residue will not be given DBT for subsidies or incentives for farm equipment as a form of punishment. This makes Bihar the first State to penalize farmers for burning crop residue.