Modinomics = Corporatonomics Part V: Other Social Sectors: Lies, Deceit, Budget Cuts

In the previous issues of Janata, we have analysed Modinomics and shown that the Modi Government, if it wants, can raise enough resources to increase its expenditures on the social sectors. Instead, it is giving away huge subsidies to the tune of several lakh crore rupees to the corporate houses. In this article, the last of this series, we discuss Modi’s budget allocations for nutrition, pensions and women-oriented schemes.

  1. Allocations for Nutrition

Hunger and Malnutrition ‘Emergency’

India may be one of the world’s fastest growing economies, but its hunger levels are amongst the worst in the world. The Global Hunger Index (GHI), a multidimensional statistical tool designed to comprehensively measure and track hunger globally and by country and region, ranked India at a very low 103 out of 119 countries for which the GHI was calculated in 2018.[i]

India is also at the epicentre of a global stunting crisis, due to child malnutrition. According to recently released data from the National Family Health Survey–4 (2015–16), 38.4% of children under the age of five are stunted (low height for age, indicating chronic malnutrition), and 35.7% are underweight (low weight for age, indicating both chronic and acute malnutrition).[ii]

Unless one has gone chronically and repeatedly hungry to bed, it is hard to imagine what that can do to one’s body and mind. But even we keep aside such (what some may call) ‘sentimentalism’, malnutrition and hunger also have enormous economic costs. How can hundreds of millions of Indians become productive members of society unless they are given the conditions needed to develop their inherent capacities, and obviously, the most basic of these is food?

Clearly, for a country facing such a massive hunger and malnutrition crisis, this should be THE MOST IMPORTANT crisis facing its policy planners, and they need to urgently address it.

Food Subsidy

The most important programme in the country to tackle this hunger and malnutrition crisis facing the country is the food subsidy programme, wherein the government provides essential food and non-food items to the poor at subsidised rates through the public distribution system (PDS). This food subsidy programme is mandated under the National Food Security Act (NFSA), passed by the Parliament in 2013.

As we have discussed elsewhere,[iii] the NFSA is a very inadequate Act. We have argued in several articles printed in Janata Weekly[iv] that the best way to overcome these shortcomings of the NFSA and also effectively address the hunger / malnutrition crisis is to universalise the PDS (the PDS presently provides subsidised foodgrains only to 67% of the total population), and also include distribution of other food essentials in it. (Discussing this issue in greater detail is beyond the scope of this essay.)

The BJP, when it was in the opposition and during its election campaign of 2014, had promised to modify the NFSA and bring in ‘universal food security’, and BJP leaders had gone on record demanding the expansion of the Act to include other food essentials in it.[v] But after coming to power, the BJP Government has gone completely silent on all these issues. Forget expanding the PDS, in the five budgets presented by Jaitley (2014–15 A to 2018–19 RE), the food subsidy as a percentage of budget outlay and as a percentage of GDP has actually declined  (see Table 1).


How much would Universalisation and Expansion of PDS Cost?

In an article published in an earlier issue of Janata, we have shown that the total increase in food subsidy required for universalising the PDS and providing all citizens 35 kg of wheat /rice and 5 kg of millets per household per month will cost the exchequer an additional Rs 85,000 crore at the most (calculation made for 2017–18). Additionally, if the government decides to distribute 2 kg of pulses and 1 kg of edible oil to all families through the PDS at subsidised prices, that would cost the exchequer at the most Rs 40,000 crore. This means that universalising and expanding the PDS would only lead to a total increase in the food subsidy bill of Rs 1.25 lakh crore.[vi] That was calculated for two years ago. Assuming inflation of 8% per annum, this amount today would be Rs 1.45 lakh crore. As we have shown in our previous articles, the government can easily raise enough resources to finance this increase.

Yet More Cuts in Food Subsidy Planned . . .

Not only has the Modi Government made a complete U-turn on its promise to universalise food security, and kept the food subsidy at very inadequate levels, it is now planning further cuts in food subsidy. The government’s plan is to gradually eliminate the PDS, identify the poor through Aadhaar, and provide direct cash transfers to the poor into their bank accounts. Defending the plan, the government’s Chief Economic Advisor Arvind Subramanian stated that this will enable the government to stop leakages as well as exclude the better-off from the PDS, and the government can then invest the savings into infrastructure (that is, transfer it to the private sector through the PPP route); simultaneously, prices can be “liberated”.[vii]

This is typical ‘free market jargon’—that worships the free market, and demands that market must be allowed to determine prices. But preventing the market from determining prices was precisely one of the reasons why the PDS had been introduced in the country in the first place: speculators would often cause foodgrain prices to zoom, creating havoc for the poor, which ultimately forced the government to introduce the PDS. The PDS not only guaranteed foodgrains to the people at fixed and subsidised prices, it also acted as a check on speculation in foodgrain prices. For crops for which there is no procurement, and whose prices are determined by the ‘free market’, there often takes place a sharp fluctuation in prices, like what happened with tur (arhar) dal in 2015.

Once the PDS is dismantled, speculators will again be able to rule the roost. If and when wheat and rice prices zoom, the government would then have to increase its cash transfers to the poor. But it is doubtful if the government would do that, as it is seeking to reduce its food subsidy bill. It is going to spell absolute disaster for the millions of impoverished people in the country.

Other Nutrition Schemes

The previous governments had put in place several “nutrition” schemes oriented towards pregnant women and children. While the funding for them was inadequate, at least they attempted to address the problem. Most of them are included under the umbrella of Integrated Child Development Services (ICDS), and include Anganwadi services and the Maternity Benefit Programme (MBP), apart from some other smaller schemes. Another important scheme that is also nutrition-oriented, but comes under the Human Resource Development Ministry, is the Mid-Day Meal Scheme for school children.

Let us take a look at the allocations for the most important of these schemes under five years of Modi rule:

  1. i) Anganwadi services

The most important of these nutrition schemes is Anganwadi services.  It is a programme aimed at providing health, education and supplementary nutrition to mothers and children below 6 years of age. Though there is an increase in the budget of this year over last year’s revised estimate by 10.9%, this pales into insignificance when we look at the budget cuts made in the previous years, because of which the expenditure in 2018–19 RE is less than the allocation for 2014–15 even in nominal terms; in real terms, it signifies a cut of a whopping 34%.

This huge reduction has been made, despite a damning Niti Ayog Report of 2015 showing that around 41% of the Anganwadis have inadequate space, 71% are not visited by doctors, 31% have no nutritional supplementation for malnourished children and 52% have bad hygienic conditions.[viii] With the government reducing the allocation, the conditions are only going to get worse. It is indicative of our ruling regime’s complete insensitivity towards the 5 crore children in the country who are malnourished and the more than two crore pregnant women and lactating mothers. It also means that the Anganwadi workers who are being paid a pittance will continue to work at their very low wages.

  1. ii) Pradhan Mantri Matru Vandana Yojana

This maternity benefit programme, earlier known as the Indira Gandhi Matritva Sahyog Yojana, was first introduced as a pilot scheme in 53 districts across the country in 2010. It then gave a modest allowance of Rs 4,000 to pregnant and lactating mothers. Subsequently, the NFSA passed just before the 2014 elections mandated the extension of this programme to all over the country, and an increase in the allowance to Rs 6,000.

However, after winning the elections, the BJP delayed the implementation of this provision for 3 years, despite the huge maternal health crisis gripping the country: India’s maternal mortality rate is the highest in the world; according to the World Health Statistics (2016), nearly 5 women die every hour in India due to pregnancy and delivery related complications.

Finally, after much public pressure, Prime Minister Modi finally announced the implementation of these entitlements to all over the country in his address to the nation on December 31, 2016. But as is his wont, he repackaged the programme and proudly presented it as a new scheme, the Pradhan Mantri Matru Vandana Yojana. FM Jaitley followed it up with a similar announcement in his 2017 budget speech. But like the other big-bang BJP announcements, Modi-Jaitley are not serious about implementing it. Jaitley has never allocated enough funds for a genuine implementation of this scheme. It is estimated that it would require an allocation by the Centre of Rs 9,700 crore per year (assuming Centre–State cost sharing to be 60:40);[ix] but Jaitley in all his budgets so far has allocated less than one-third of that, and spent less than one-fourth! In 2017, he allocated Rs 2,700 crore, spent only Rs 2,048 crore (2017–18 A); and in 2018–19, allocated Rs 2,400 crore but spent only Rs 1,200 (RE)—implying that an overwhelming number of pregnant women are being denied their maternity entitlements under one excuse or the other.

iii) Mid-Day Meal Scheme

This is another very important scheme to combat the huge malnutrition levels among children in the country; another equally important purpose is to improve school enrolment and child attendance in schools. But the government is not willing to allocate a decent amount for providing one nutritious meal a day to its children, despite the fact that more than one-third of the country’s children under five—about 47 million souls—suffer from stunting. In its very first year, the Modi Government reduced the money spent on this scheme from an already low allocation of Rs 13,215 crore to Rs 10,523 crore, and in the 2018–19 RE, the money spent on this scheme is less than that even in nominal terms (Rs 9,949 crore); in real terms, this implies a reduction by nearly half!

  1. Pension Scheme for Informal Sector Workers

Presently, the main programme for providing social security to the poor (including the disabled and widows) and especially those working in the unorganised sector is the National Social Assistance Programme (NSAP), allocation for which is budgeted under the Department for Rural Development. During its five years in power, the Modi Government’s allocation for this programme was a lowly Rs 9,000–10,000 crore. The total number of poor people in the country, even according to the government’s convoluted statistics, is around 36 crore. That works out to a social assistance of Rs 250 per person per year—a princely sum indeed! Not only that, the allocation for this programme actually declined during five years of Modi rule (2014–15 BE to 2018–19 RE) by a whopping 43% in real terms (see Table 3).

The most important scheme under this program is the Indira Gandhi Old Age Pension Scheme, under which the Central Government provides a ridiculously low pension of Rs 200 per month to old people above the age of 60. This pension amount of Rs 200 has remained unchanged since 2007—applying a deflation rate of 8% per annum means that its real value has fallen to less than Rs 90 today! Even this low amount is given to only those citizens below the poverty line; as is well known, a very large number of the poor do not have BPL cards, and so are deprived of this tiny amount too! This explains why the total budgeted expenditure for this scheme in the 2018–19 budget was only Rs 6,564 crore; the government managed to save on even this low amount, and so the 2018–19 RE shows a disbursement of only Rs 5,972 crore (Table 3)!

And so, activists and working people and unions have been agitating for a decent old age pension for the poor and the informal sector workers for years. Apparently ceding their demand, the finance minister in his Budget 2019 speech announced a new pension scheme for informal sector workers that he pompously labelled as the Pradhan Mantri Shram Yogi Mandhaan (PMSYM), under which the estimated 42 crore informal sector workers in the country would be given a monthly pension of Rs 3,000. The announcement created a big splash in the media (as desired!).

A closer look reveals that the new scheme is a cruel joke on the informal sector workers. It is even a bigger hoax than the Ayushman Bharat insurance scheme. Nevertheless, the Modi Bhakt media went to town touting it as the largest pension scheme in the world!

Under the PMSYM scheme, informal sector workers are not going to automatically get a pension of Rs 3,000 per month upon attaining the age of 60. They will get this pension only after they have paid a monthly premium for several years, the amount of which will depend upon the duration for which they pay this premium. For instance, a worker who starts paying at the age of 29 would have to pay Rs 100 per month for 31 years and a worker who starts paying at the age of 18 would have to pay Rs 55 for 42 years. The government would make a matching contribution. Only then would the worker, on reaching the age of 60 years, get a pension of Rs 3,000 per month.[x]

The PMSYM scheme actually only reveals how cut off are PM Modi and his cabinet ministers from the real life conditions of our country’s informal sector workers (even though PM Modi may claim to be a chaiwallah earlier). The wages of the unorganised workers are so low, their jobs are so uncertain, their life conditions are so precarious, that asking them to first pay a defined, even though small, part of their hard earned income every month and that too for 20/30/40 years shows extreme insensitivity to their plight.

There is another reason also for the PMSYM being a farce. Expecting unorganised sector workers to deposit any part, even a small part, of their hard earned income in a scheme from which benefits will flow after 20 to 30 years is completely unrealistic. Governments have in the past broken so many promises, denied so many promised benefits, to ordinary people on vague excuses that expecting workers to believe the government promise that it would pay them a pension if they deposit some amount for 20/30/40 years is silly, to say the least.

And that too, for a pension amount which is a pittance! For a worker aged 30 today, he/she will be getting a pension of Rs 3,000 after 30 years. Even if we take 5% inflation, the real value of this would be a mere Rs 700 after 30 years!

But the biggest problem with this pension scheme is that by the time they reach the age of 60 years, when the workers will start receiving their pension, a majority of the informal sector workers would not be alive to avail of its benefit! While an age of 60 years is good for giving post-retirement benefits to the middle classes, it is completely unrealistic for the hard working informal sector workers. And life expectancy for informal workers doing the hardest jobs, like construction workers and quarry workers, would probably be less than 55 years.[xi] This only goes to show how divorced are Modi–Jaitley–Goyal from the real conditions of the working poor in India.

Clearly, the PMSYM is only another election jumla; worse, it is a complete fraud.  

Can’t our country afford to pay our informal sector workers, whose life conditions are so bad that they rank at the bottom of the ladder not just in India but at the global level, a decent pension in their old age, entirely on a non-contributory basis, so that they can spend their twilight years in dignity?

Indeed, the government, if it so desires, can easily do so. If it decides to provide all the old people in the country a (non-contributory) monthly pension of Rs 3,000 per month—and we are here talking of a universal pension scheme, not just for those living below the farcical official poverty line—it would cost the government Rs 4.3 lakh crore (there are an estimated 12 crore people in the country above the age of 60, so 12 crore x 3000 x12 = 432,000 crore). From the estimates made in our previous articles published in Janata about the potential for increasing government revenues, the government can easily afford to pay this if it so desires.

  1. Allocations for Women

These allocations are outlined in the Gender Budget Statement (GBS). It compiles information submitted by the various ministries and departments on how much of their budgetary resources are targeted for benefiting women.

In a country where a crime against a woman is committed every 96 seconds, an insensitive Modi Government has reduced the gender budget in real terms as compared to last year. In fact, over the five budgets presented by Jaitley so far, the allocation for 2018–19 is more than the estimated allocation for 2014–15 by only 4.93% (CAGR), implying a cut in real terms. This reduction is also reflected in the gender budget allocation as a percentage of total budget outlay and also as a percentage of GDP (see Table 5).

A closer look at the GBS makes it clear that a large part of the allocations shown under it have actually nothing to do with the exclusive welfare of women. Let us discuss this with reference to 2018–19 RE.

The GBS is in two parts. Part A details schemes in which 100% provision is for women; total budget for this is Rs 26,544 crore. But of this, Rs 19,900 crore or 75% of the total budget under Part A is accounted for by only one scheme, Pradhan Mantri Avas Yojana. Even if women are given joint ownership of houses built under this scheme, how is this a scheme that is meant to benefit women exclusively? 

Part B of the GBS includes spending for those schemes where allocation for women constitutes at least 30% of the provision. All important ministries claim that 30–40% of their allocations are for women, and these are routinely included in Part B of the Gender Budget. Thus, for instance, the Department of Health and Family Welfare has claimed an allocation of Rs 23,421 crore for the Gender Budget, which is 43% of its total allocation of 54,303 crore; the Department of School Education and Literacy claims gender oriented allocation to be Rs 14,574 crore out of its total allocation of Rs 50,114 crore, or 29%; and so on. No attempt is made to ensure that this much allocation is targeted to benefit women, neither do these ministries attempt to make an estimate  of how many women have benefited from these women-oriented allocations. Part B (Rs 92,583 crore) constitutes 79% of the total Gender Budget.

This basically means that most of the Gender Budget, probably more than three-fourths, has really nothing to do with benefiting women exclusively. Yet another Modi–Jaitley ‘jumla’.

The Genuinely Women Oriented Schemes

Let us now take a look at some of the schemes under Part A which are genuinely and exclusively meant to benefit women.

The scheme that has got a large allocation and has received the most publicity in recent times is the Ujjwala scheme to provide free cooking gas connections to poor women (2018–19 RE shows an expenditure of Rs 3,200 crore on this). The government claims that more than 7 crore free connections have been provided to poor women under this scheme by International Women’s Day, March 8, this year (2019).

This scheme is also turning out to be another ‘jumla’. Under this scheme, while poor women don’t have to make any initial payment at the time of taking the gas connection, the gas stove and first cylinder given to them are not given free, but as a loan, to be recovered from them from the subsidy they receive at the time of each refill. Which means they have to pay the market rate for all subsequent cylinders, till the loan (around Rs 1,500) is recovered. But most poor can’t afford the price of the subsidised refill too, forget paying its market price. Therefore, according to newsreports, a very low number of Ujjwala beneficiaries are coming back for refills. Which is why data show that while the number of LPG connections across India increased by 16.26% in 2016–17, the use of gas cylinders increased by only 9.83%—lower than the rate recorded in 2014–15, when the scheme did not exist.[xii]

Most other genuinely and exclusively women-oriented schemes in Part A come under the Ministry of Women and Child Development. The total allocation for them was a miniscule Rs 4,271 crore. Yet, the 2018–19 RE show that the government managed to save on this too, spending only 60% of the budget allocation (Rs 2,574 crore).

To give an example: the government announced in 2017–18 that it was extending the ‘Scheme for Adolescent Girls’, also called SABLA, from 205 districts in 2016–17 to cover the entire country over the next two years (by 2018–19). But at the same time, it has reduced the allocation for this scheme from Rs 450 crore in 2017–18 A to Rs 250 crore in 2018–19 RE.

Most schemes show such tiny expenditures on them that it is obvious that the government is not serious about implementing them, and they have been announced for propaganda purposes only. Thus, according to the 2018–19 RE, only Rs 29 crore has been spent on ‘Women’s helpline’; Rs 52 crore on working women’s hostels; Rashtriya Mahila Kosh, that is supposed to provide micro-loans to women for livelihoods, micro-enterprises, etc. has been given a princely Rs 0.01 crore (or, Rs 1 lakh); the Central Social Welfare Board, that is supposed to run several important programmes for the welfare and development of women and children, especially in rural areas, has been given a measly Rs 71.5 crore; while the National Commission for Women, a statutory body that investigates complaints related to deprivation of women’s rights, has been allocated Rs 24 crore.

The Modi–Jaitley Government has even run down the Nirbhaya Fund. Following the brutal gang rape of a young girl in Delhi in December 2012 that shook the conscience of the nation, the then Finance Minister P. Chidambaram had announced this fund in his 2013 Union Budget to support initiatives by the government and NGOs that support the safety of women in India, with a corpus of Rs 1,000 crore. Subsequently, Jaitley too in his budgets allocated funds for this non-lapsable corpus fund. According to a recent newsreport, government data say that the total amount that had accumulated in this fund in 2018–19 was Rs 3,600 crore, of which the BJP Government had released only Rs 1513 crore, or 42%, till December 2018.[xiii]

Finally, let us take a look at the Modi Government’s most hyped scheme for the girl child, Beti Bachao Beti Padhao. The declared aim of the scheme is to end discrimination against the girl child and educate her. The total amounts allocated and spent under the scheme under the five Jaitley budgets are given in Table 6.

The 2018–19 BE shows an allocation of Rs 280 crore this scheme. As of December 31, 2018, the government had spent Rs 226 crore of the allocated amount, according to Minister of State for Women and Child Development Virendra Kumar in a written reply given in the Lok Sabha on January 1, 2019. But he admitted that of this amount, Rs 155.7 crore, or 69%, had been spent on advertisements, and only Rs 70.6 crore (31%) had been disbursed to the districts and the States! The same reply also showed that during the first four years of the scheme, of the total amount allocated for this scheme in the budget allocations (Rs 487 crore), the government spent only 60% of it (Rs 295.5 crore). Even of this low amount spent, more than 70% was on advertisements.[xiv]

Do we need any more proof that the BJP-RSS does not really believe in gender equality?

            “Global Hunger Index 2018: India Ranks 103rd out of 119 Countries”, October 12, 2018,

[ii]    “As Per the National Family Health Survey (NFHS)–4 (2015–16), 35.7 per cent Children Below Five Years are Underweight”, April 12, 2017,

[iii]    See our booklet: Is the Government Really Poor, Lokayat publication, 2018,

[iv]    See: Neeraj Jain, “Modi Government and the Nation’s Food Security”, Janata Weekly, July 30, 2017,; Neeraj Jain, “For a Universalised Public Distribution System”, Janata Weekly, August 27, 2017,

[v]    Sanjeeb Mukherjee, “Outlay Shows States May Go Slow on Food Security Plan”, July 12, 2014,; “Right to Food Campaign on Budget 14”, July 12, 2014,

[vi]    Neeraj Jain, “For a Universalised Public Distribution System”, op. cit.

[vii]    Quoted in: “Constructing Theoretical Justifications to Suppress People’s Social Claims”, Aspects of India’s Economy, No. 62, January 2016,

[viii]    Sourindra Mohan Ghosh, Imrana Qadeer, “An Inadequate and Misdirected Health Budget”, February 8, 2017,

[ix]    Dipa Sinha, “Budget 2017 Disappoints, Maternity Benefit Programme Underfunded, Excludes Those Who Need It the Most”, February 3, 2017,

[x]    B. Sivaraman, “Interim Budget’s Pension Scheme is a Big Hoax”, February 7, 2019,

[xi]    Sudhir Katiyar, “Budget 2019: Pension Scheme for Unorganised Workers Is Yet Another Illusion”, February 2, 2019,

[xii]    Nayantara Narayanan, “The Modi Years: Are More Indians Using Cooking Gas Because of the Ujjwala Scheme?”, January 26, 2019,

[xiii]    “Only 42% of Nirbhaya Fund Released for Projects Since 2015

”, April 17, 2019,

[xiv]          “56% Of ‘Beti Bachao, Beti Padhao’ Funds Spent On Advertisements: Minister”, January 22, 2019, https://www.outloo

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