Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Social Sector and Budget 2015-16 - Outside View by S.S. TARAPORE

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Social Sector and Budget 2015-16
Nov 3, 2014

Work on the Union Budget for 2015-16 has started in earnest. Powerful sectional interests will assert their claims for concessions with the promise that they would deliver on growth. In all this no one would advocate the cause of the poorest relative i.e. the social sector. Within the social sector there would be a pecking order, with centres for higher education getting priority over primary education, state-of-the-art hospitals getting priority over primary health centres, beautification of gardens with fountains in capital cities gaining priority over pockets totally bereft of drinking water and grand design schemes gaining priority over rudimentary sanitation.

Prime Minister's clarion call

Prime Minister Narendra Modi has issued a clarion call that sanitation, drinking water, primary education and health issues should be over-riding priorities which hopefully should be reflected in the Union Budget for 2015-16.

Can common person understand Budget?

It is well known that when there are macroeconomic pressures to reduce the gross fiscal deficit, the social sector is the softest target. There is no lobby to ensure that Primary Health Centres have simple medicines to alleviate pain, that there are village schools with teachers, that drinking water is available within reasonable access, that rudimentary sanitation is provided in remote villages. Again there is a great divide between allocation and actual disbursements. Furthermore, the articulate segments denigrate increased allocation to the social sectors as populist. Nothing can be further from the truth.

Fiscal pundits chuckle at the confusion in the mind of the common person trying to understand the budget from the viewpoint of the social sector. Let us look at the document 'Budget at a Glance for 2014-15'. There is bifurcation of expenditure into 'non-plan' and 'plan outlays'. It is hoped that the Union Budget for 2015-16 will get rid of this charade.

The central outlays for Drinking Water and Sanitation have been reduced from Rs 12,000 crore in 2013-14 to Rs 231 crore in 2014-15. Allocation to the Ministry of Health and Family Welfare is reduced from Rs 25,990 crore to Rs 8,426 crore. The allocation for Human Resource Development is reduced from Rs 61,862 crore to Rs 17,672 crore. The allocation for Women and Child Development is reduced from Rs 18,000 crore to Rs 989 crore.

To understand these drastic reductions, the common person has to turn to the state plan outlays. The allocation for the Ministry of Drinking Water and Sanitation has been increased from nil in 2012-13 to Rs 15,026 crore in 2014-15. Likewise, for the Ministry of Health and Family Welfare, the increase is from Nil to Rs 25,459 crore. For Women and Child Development, the increase is from Nil to Rs 19,818 crore. These fiscal gymnastics are incomprehensible to the common person. One hopes that in the Union Budget for 2015-16, the Budget at a Glance would be presented in a manner which would be easy for the Common Person to understand. The central issue is that these sensitive sectors should be provided larger allocations in 2015-16 and that they should not be made the sacrificial lambs in the name of correction of the fiscal deficit.

Dimension of sanitation problem

Ninety years ago, Mahatma Gandhi made a telling statement when he said "Sanitation is more important than Independence". Today, of the 11 billion people in the world practicing open defecation, 60 per cent are Indians, thereby creating a major health problem (Vijay Raghavan, Secretary Department of Biotechnology, Sanitation is Independence, Hindu Business Line, March 13, 2014). About 60 per cent of rural households in India do not have access to a latrine.

In the 1920s when Kathrine Mayo wrote her book Mother India to describe the depths of misery, the Indian nationalist movement was up in arms led by Lala Lajpat Rai's response in Unhappy India wherein the miseries of India were attributed to the British Raj. It is sad that in the year 2014 we have a telling book by Ms. Bhasha Singh 'Unseen: The Truth about India's Manual Scavengers'. The Central Government passed the Prohibition of Employment as Manual Scavengers and their Rehabilitation Bill in 2012. Bhasha Singh argues that all that this has been done is to make manual scavenging illegal. Today we do not have to react as we did in the 1920s to Katherine Mayo's book. It is the bounden duty of every citizen of India to consider Prime Minister Modi's call as a sacred duty. The Ministry of Finance should step up allocations to the social sector without worrying about the adverse reaction of the elite segments of society. After all Prime Minister Modi has said "Government has no business to be in business."

Accordingly, the Budget should simply not make any allocations to the business sector merely because it is in the public sector. The social sector should be the overriding priority in the Union Budget 2015-16.

Tragedy of pulses

The food grains stocks as of October 1, 2014 were 48 million tones-twice the buffer requirement. It is sad that the per capita consumption of pulses has fallen for years. The latest crop has been very poor and there will be escalation in prices. Pulses are the major source of protein for the masses and for many years more and more people are giving up consumption of pulses. We have to be serious. Do we want to have a nation of protein deficient children? Pulses should be distributed free by the government; the cost of doing so could be recouped by a very marginal reduction in the cereals subsidy. Extreme problems need extreme solutions. It is unconscionable that we do not wipe out the shame of the tragedy of pulses.

Please Note: This article was first published in The Freepress Journal on November 03, 2014. Syndicated.

This column, Common Voice is authored by Savak Sohrab Tarapore. Mr. Tarapore, is an economist and he runs his own Multi-Language Syndicated Column. Mr. Tarapore's other column, which appears in The Hindu Business Line, is titled Maverick View.


The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "Social Sector and Budget 2015-16". Click here!


More Views on News

Two Meetings That Nailed the Idea of Owning Brilliant Smallcaps Without Buying Them (The 5 Minute Wrapup)

Mar 22, 2018

Certain blue chips hold the potential of delivering returns comparable to small-cap stocks. With these stocks, you can get the best of both worlds.

What They Forgot to Tell You About Sensex at One Lakh (Profit Hunter)

Nov 29, 2017

Stocks that could beat Sensex returns in the long term.

How I Got My Wife To Invest In Mutual Funds... (Outside View)

Jul 20, 2018

PersonalFN brings to you a real-life case of how husband and wife engaged in a sensible money-talk post-marriage to build a solid mutual fund portfolio.

Our Newest "Fixer-Upper" (Vivek Kaul's Diary)

Jul 20, 2018

Bill Bonner talks in detail about US president been accused of treason, biggest debt default in China, the problem of growing inflation and the trade war.

The 'Profitable' Ola and Uber You Can lnvest In Right Now (Profit Hunter)

Jul 20, 2018

Here's is a business in small cap space that is asset-light and yet profitable - A serious contender for the list of future blue chips.

More Views on News

Most Popular

How to Avoid a 90% Loss Suffered by This Super Investor(The 5 Minute Wrapup)

Jul 12, 2018

Blindly following super investors is a dangerous game to play. Here's how you can avoid such mistakes.

The Answer to Your Wealth Worries: Small Caps (Especially Now)(Profit Hunter)

Jul 10, 2018

If you're worried about the markets - you are on the wrong track. This is opportunity - put your wealth-building hat on, instead - Richa shows you how...

The Multiple Problems with the Minimum Support Price (MSP) System(Vivek Kaul's Diary)

Jul 11, 2018

The price signals that MSP sends out, creates its own set of problems.

ICICI Pru Mutual Fund Tarakki Karega! - The Unethical Way?(Outside View)

Jul 11, 2018

PersonalFN explains how ICICI Prudential Mutual Fund flouted the norms of related party transactions while subscribing to the IPO of ICICI Securities.

PPF v/s Mutual Funds: Which Is Better?(Outside View)

Jul 10, 2018

PersonalFN highlights the key points of distinction between PPF and mutual funds.


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Jul 20, 2018 (Close)