(Dr. Shashi Tharoor is a two-time MP from Thiruvananthapuram, the Chairman of the Parliamentary Standing Committee on External Affairs, the former Union Minister of State for External Affairs and Human Resource Development and the former UN Under-Secretary-General. He has written 15 books, including, most recently, India Shastra: Reflections On the Nation in Our Time.)
As parliamentarians spend part of their recess looking at the small print of the Budget before the session resumes this month, the awful realization is sinking in that the Government has perpetrated a stunning fraud on the Indian people.
The highlight of the Prime Minister's and Finance Minister's speeches on the budget was their emphasis on how their government had decided to transfer a much larger share of resources to the states - 42 per cent of central taxes instead of 32 per cent - in accordance with the Finance Commission's recommendations. The implication was that the states would get much more money, and much more freedom on how to spend it, than ever before.
How is it, then, that the states are actually ending up with slightly less money overall, not more?
Simple: budget figures reveal that the Modi Government is actually not going to fund many of the Central Government schemes it has gaudily announced, or fund them at vastly reduced levels. So though more tax money goes to the states, less overall revenues do - leaving them without about the same money they already have, but expecting them to do things the Centre used to do before. The share of the States in the overall resources of the Centre has actually marginally decreased from 63 per cent to 62 per cent.
Comparing the budget estimates of 2015-16 with those of Mr Jaitley's own first budget in 2014-15 shows a dramatic drop in Central funding of about Rs 66,000 crore. The total additional tax money the states will get from the Finance Commission's recommendations clocks in at just under Rs 64,000 crore. That seems almost a wash, except that with inflation and cost escalation in projects, the States are likely to have to spend more than the Centre is now withholding, just to do the things that are already being done.
The Centre is reducing its allocations to the State plan and winding up some Centrally Sponsored Schemes like the Backward Regions Grant Fund and smaller schemes in the areas of agriculture, panchayats, rural development, irrigation, sanitation, drinking water, health and education.
The Panchayats have been the worst-affected, with their allocations reduced to Rs 94.75 crore in FY 2015-16 from the previous year's Rs 3,400.69 crore. The Rajiv Gandhi Panchayat Sashaktikaran Abhiyaan has not received any allocations at all. The Centre has also reduced allocations for state plans for the Integrated Child Development Service by 50 per cent: there now isn't money to run the anganwadis, and as Maneka Gandhi, the Women and Child Development Minister confessed in Parliament, it may barely be enough to pay the salaries of existing anganwadi workers, forget milk or eggs for the kids.
That hasn't stopped the Modi Government grandly announcing one Central scheme after the other - but, as I pointed out in my book "India Shastra", all without a credible budget, an implementing plan of action or a visible execution capacity. Mr Modi grabs the headlines; the state governments get saddled with the bills.
The Modi Government's new formula is to declare new schemes but not to fund them. All MPs have been urged to adopt a village under the Adarsh Gram Yojana - but if you ask where the extra money is for these 'adarsh grams', you are told to use existing schemes. If the existing schemes have not made these villages "adarsh", will a PM declaration alone be enough?
The poster child for this technique is, of course, the Swachh Bharat Abhiyan. This is increasingly looking like a series of photo-ops, with grandees picking up brooms for the camera and never touching them again until the next camera is scheduled to come by. Toilets are being constructed, but are they being used, and are they being cleaned? Is there water and electricity in them? Surveys suggest the real figures are dismal. I am shocked to discover that the Central allocation to the Swacch Bharat Mission in the coming financial year will be Rs 3,500 crore, which is less than the minimal current budgetary allocation of Rs 4,260 crore and much less than the originally promised Rs 134,000 crore over five years. With this amount of money, the Government will not be able to fulfil its promise of building a toilet for every household lacking one in the next five years.
Why should we surprised? In Gujarat, as Chief Minister, Modiji could only achieve a one percentage point reduction in rural open defecation per year in the state between 2001 and 2011. At that rate, with these policies and this kind of budget, India will take more than 50 years to eliminate open defecation.
When I accepted the PM's kind invitation to be one of his original brand ambassadors for Swachh Bharat, I warned that photo-ops might raise public awareness, but would not solve the problem without serious Central Government investment in sanitation infrastructure. None came. My letter to the PM asking for central assistance for a major sanitation scheme in my constituency has not even been acknowledged, This budget allocation is far worse than I feared: it is a betrayal of the hopes raised by all those photo-ops. It merely provides Modiji an excuse to wash his hands of the sanitation issue altogether.
So even though the states will now receive an increased share in union taxes, they will actually have to bear a greater financial burden of implementing central schemes. The onus of social development has been shifted to the states without an equitable increase in their finances. (In any case, many states have already passed their budgets and allocated funds as per the old regime. Allocating extra funds and responsibilities may actually jeopardise the existing schemes.)
So now we understand what "co-operative federalism" really means: the Centre talks big and pays small, while the States do the work and get the blame.
And as for the Central schemes Modiji grandly announces but under-funds, the list is legion. The Government promises to create slum-free cities, but gives no money for this goal. Mr. Jaitley has allocated a total of Rs 14,200 crore for creating 'pucca' houses for both the rural and urban poor together, while the previous budget had allocated Rs 16000 crore just for rural housing. So while the Prime Minister has been promising pucca houses for all by 2022, the Finance Minister has failed to finance even the houses promised for 2015.
The list goes on. The Government has slashed the budgetary allocation for the department of agriculture by 25 per cent from the previous year's Budget Estimate. (According to the Economic survey, Indian agriculture has grown by only 1.1 per cent this year.) The plan outlays for secondary and elementary education have been reduced by 25 per cent. Whereas the cost of establishing an IIT has been estimated at Rs 2200 crore over a period of 7 years, or Rs 300 crore per IIT per year, the Modi Government has allotted a total of Rs 1000 crore to establish five IITs! Inadequate funding has compromised the quality of education in all newly established IITs and IIMs, while the Government keeps announcing more such institutions without strengthening the existing infrastructure.
The Modi Government claims to be empowering women. It bans a BBC documentary on the rape crisis in our country, while slashing funding for the national rape crisis centres it announced last year from Rs 244.48 crore to a mere Rs 18 crore. (That, Jaitleyji, is a far more unkind cut than any made in the BBC's editing rooms.)
In fact, the Government's umbrella scheme for the protection and development of women has seen a savage budgetary cut of 75 per cent. The overall plan outlays for women and child development have been drastically reduced by 51 per cent or Rs 10,000 crore.
The health sector continues to be neglected. The plan outlays for the national health budget have been reduced by almost 20per cent. India is spending only about one per cent of its GDP on public health, in comparison to China's three per cent - and 8.3 per cent in the United States of America. The budgetary allocations are not enough to meet vital health needs, but the Government declares it will establish 10 new AIIMS-like institutions and upgrade government hospitals in various states, while also providing for four additional AIIMS for unidentified states in the near future. How will these be financed? The Budget offers a laughably insufficient allocation of Rs 2000 crore, which would only create incomplete projects with limited facilities.
Perhaps, in keeping with its atavism, the Government has found an ancient text on "Vedic economics" which demonstrates how meditation will help you fulfil your goals without funding them. Thus the Government announces absurdly-inflated targets for non-renewable energy production without even the tax-free bonds, specific allocations or tax incentives that could motivate people to switch from conventional energy.
The entire Budget exercise, with big bold dreams and mismatched funds, is only reflective of the Government's over-ambitious agenda and unrealistic targets that it has no intention to finance. As with everything else about this Government, hype is all: substance is irrelevant. The Emperor has no clothes, and not merely because he auctioned his pinstriped suit. The Modi Government's real mantra is clear: grab the headlines and move on. Let the Indian people fend for themselves.
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