Opposition parties and civil society organizations have sharply criticized India's federal budget for cutting funding to vital social security programs that feed and

Opposition parties and civil society organizations have sharply criticized India's federal budget for cutting funding to vital social security programs that feed and employ the poor as the nation fights rising inequality.

In advance of the general elections scheduled for next year, finance minister Nirmala Sitharaman delivered the final complete budget of prime minister Narendra Modi's second term on Wednesday. The overall budget was set at Rs 45 trillion (£454 billion).

The administration hopes to stimulate economic development with this expenditure, which is 7.5% higher than in the current fiscal year, and so lower the fiscal deficit to 5.9% of GDP from this year's 6.4%.

A large reduction in funding for the nation's biggest federal food security program, which feeds 800 million people, will help the deficit reduction strategy. Not just that social security program is seeing a significant budget cut. The Rural Jobs Guarantee Program, which offers over 150 million Indians a minimum of 100 days of employment, would also see a reduction in funding.

The budget for the targeted public distribution system-provided food subsidy will be cut by 32% as a result of the government's proposal to lower spending from an expected Rs 2.87 trillion this year to Rs 1.97 trillion in the upcoming fiscal year, which begins on 1 April.

The Mahatma Gandhi National Rural Employment Guarantee Act's (MGNREGA) funding was reduced by 30%. The finance minister suggests cutting financing to the lowest level in more than five years, from Rs 8.95 trillion to Rs 6 trillion.

While the Bharatiya Janata Party (BJP), which is in power under Modi, praised the budget as a significant step toward all-inclusive prosperity, activists and opposition politicians claimed it fell short of addressing the needs of the underprivileged and the nation's rising unemployment rate.

In terms of equal growth, the budget is "horrible," according to social activist Nikhil Dey. Although India's growth has been superior to that of the majority of other nations, he says to The Independent, "we have also greatly expanded the number of the poor."

“We have the largest number of poor in the world and the largest number of poor were added to our ranks,” he says about the impacts of Covid. “The policy measures that helped the segment at the bottom during the Covid-19 pandemic are MGNREGA and food subsidies.”

According to the activist group People's Action for Employment Guarantee (PAEG), the program played a critical role in compensating for income losses during the pandemic, which averaged up to 80% in some regions despite already being underfunded.

However, there were still a lot of gaps, according to the group, and survey results showed that up to 39% of households that were eligible for the program did not receive even one day of work under the program, underscoring the need for increased budget allocation.

According to Congress spokesperson Pawan Khera, the rural employment initiative is under "pressure from all sides." "According to [MGNREGA], 100 days of labor are guaranteed; yet, individuals are only receiving an average of 42 days of employment under the Modi administration. And even if they get that work, states are not being paid the pending wages on time.

“This is not a budget for the poor, it is a document to make rich people, richer.”

The global alarm has been raised over India's growing inequality, as Oxfam noted in its report from last month. The richest 1% of Indians held more than 40.5% of the nation's total wealth in 2021, according to the study, while the poorest citizens were "unable to purchase even essentials to life."

According to the study, the poor and middle classes paid more in taxes than the wealthy, with the bottom 50% of income paying 64% of the total goods and services tax while the top 10% paid only 4%.

In support of progressive tax policies like a wealth tax, the group claimed that a 2% wealth tax on the nation's billionaires would cover the population's nutritional needs for the next three years.

The finance minister praised the government's food distribution program during Wednesday's budget despite severe financial reductions. With a program to provide free food grains to more than 80 crores (800 million) people for 28 months during the Covid-19 pandemic, Sitharaman claimed, "We guaranteed that no one went to bed hungry."

According to Sitharaman, a program called Pradhan Mantri Garib Kalyan Anna Yojana that offers free food grains to the poorest households will begin operation on 1 January for Rs 2 billion, "continuing our commitment to provide food and nutritional security."

Activists countered that this plan was actually already in place as a pandemic-era measure to double the amount of food aid provided to low-income families. The program, according to economist Jean Dreze, benefited lower-income families who were already entitled to 5 kg of food under the 2013 National Food Security Act, but it was actually discontinued in December and has not been restarted.

“As a result, from January onwards, they were receiving only 5kg ration under the separate national food security program, instead of a total of 10kg that they were receiving for the past 28 months,” he says.

And what's most upsetting, according to Dey, is that the government continues to act as though the Pradhan Mantri Gareeb Kalyan Yojana is still in effect. "But the reality is that they stopped selling it this year when the price of wheat on the market had risen to Rs 40 a kg. Therefore, you are endangering people's basic needs, including their ability to access food.

"It is obvious that they are deceiving everyone else. When they realize that their rations would be reduced from 10 kg to 5 kg, those who will receive less food cannot be duped. Others, however, will believe that the government is helping the poor.

The BJP has been contacted by The Independent for comment on this apparent disparity as well as the other points brought up by activists and opposition parties, but as of the time of publication, no response has been received.

The non-revision of pension plans is a further policy that has alarmed civil society organizations. Since India's inflation rate has been averaging 6% over the previous ten years, retirees have suffered a sizable real-terms loss during that time. According to Dey, since 2006, the central government's monthly payment to old-age pensions has remained constant at Rs 200. What could one possibly do with that?

India budget facing backlash over deep cuts to flagship social security programs

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