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Budget 2023: Here's How Key Government Schemes Have Fared

BQ Prime reviews some of the key central government schemes ahead of Budget 2023.

<div class="paragraphs"><p>The Indian Parliament building in New Delhi, India</p><p></p><p>(Source: Reuters) </p></div>
The Indian Parliament building in New Delhi, India

(Source: Reuters)

From rural welfare to water and housing, experts say key schemes saw better activity in the ongoing financial year as India emerged from the shadow of the pandemic. But they flagged insufficient funds for the rural jobs guarantee programme.

Focus on key schemes is expected to continue in the upcoming budget that Union Finance Minister Nirmala Sitharaman will present on Feb. 1.

BQ Prime takes a look at some of the key central government schemes, excluding subsidies, to ascertain how they fared in FY23.

Rural Employment Guarantee Scheme

The government’s minimum wage guarantee programme is plagued by insufficient funding, low wages, and lack of timely payments, undermining the true potential of the scheme, according to experts BQ Prime spoke with.

The scheme played a pivotal role during the pandemic to support the rural economy, and the demand for work under MGNREGA continues to hold up even as Covid wants, according to Gaura Sen, an economist at IDFC First Bank.

In FY23, demand for employment continues to remain higher than pre-pandemic levels, reflecting the slower recovery in the rural economy, she said.

While the government budgeted for a Rs 73,000 crore outlay, the full amount has still not been released, leading to a backlog of payments at the grassroots level.

Apurva Gupta, who works with the NREGA Sangharsh Morcha campaign, said given past dues, the budgeted sum of Rs 73,000 crore is grossly insufficient.

"If we look at yearly trends, we notice that usually in the first six months, 80–90% of the MNREGA budget is exhausted," Gupta said. "If we notice the demand and payment trends, we see pending wages keep increasing marginally in the latter half of the year, resulting in a slowdown of work on the ground."

Even after accounting for the supplementary demand for grants, the central government will likely see a negative net balance where expenditure overshoots the allocation, she said. "If we assume that all the active labour will demand 100 days of work as guaranteed under the scheme, the estimates will only increase further."

The fiscal math must begin to factor in the underlying need, Gupta said. "The biggest challenge is that the scheme is not perceived as a 'demand-driven' scheme, and delayed or partial payments undermine its true potential. The budget allocation controls timely payments and wages throughout the year. So if the allocation is low, then it affects the entire structure."

Unaccounted for in the expenditure is also the withheld amount for the state of West Bengal. The release of funds withheld against West Bengal sparked a heated debate in the winter session of parliament, with the central government citing "lack of rule compliance" as its reasoning.

Lok Sabha responses tabled on Dec. 13, 2022 said pending wage dues to various states come up to Rs 4,448 crore, of which Rs 2,745 crore is owed to West Bengal.

The ground-level impact of these figures translates to affecting about 1.64 crore active workers in West Bengal alone, Gupta said.

Jal Jeevan Mission

The Jal Jeevan Mission was launched in August 2019 with the aim to provide safe, regular, and adequate drinking water to rural households through tap connections by 2024.

In terms of financial outlay for physical progress, the government has done very well, Bhabesh Hazarika, an economist with the National Institute of Public Finance and Policy, said. The government, he said, has managed to cover over 50% of the rural households in a span of two to three years.

The challenge ahead is to ensure that the tap connections remain functional and provide adequate supply of safe water.

Urgent remedial action is needed to ensure the water is free of turbidity, bacteriological contamination, and harmful mineral content, which were found in samples, according to a 2022 report by HTA-Kantar Public based on a study commissioned by the government. The study assessed the functionality of tap connections for households and village-level public institutions.

"These efforts need to be highlighted as part of on-the-ground communication, for people to know that tap water is safe for drinking... proper and regular review at the district/ panchayat level would strengthen the system," the report added.

Hazarika said his ground-level research also showed trends where 30–40% of the taps were not functional pan-India.

Apart from this, he said, the government's efforts towards awareness must engage the existing local civil societies so that behavioral changes regarding the consumption of safe water are cultivated.

He hopes the scheme will be completed in FY24 and expects the allocation in the upcoming budget to increase due to the political demands of upcoming state and general elections.

Pradhan Mantri Kisan Samman Nidhi Yojana

The PM Kisan Yojana is a fully central sector scheme that began in December 2018 to provide income support of Rs 6,000 annually via direct benefit transfer in three instalments to eligible landholding farmer families. Professionals, taxpayers, retired or active officials, politicians, ministries, and institutional landholders aren’t eligible.

Initially pegged at 12.5 crore, eligible beneficiaries as of August 2022 stood at 11.37 crore farmer families.

Bornali Bhandari, a professor at the National Council of Applied Economic Research, told BQ Prime that evaluating the scheme would require assessing the evolution of farmers’ economic conditions from when this was announced and how they use these funds.

"We need to see what the objective is. Is the objective to provide a social protection mechanism and aid cash flow? In that case, a cash incentive might not help against price rises," she said.

According to the Economic Survey 2021–22 last year, the average monthly income per agricultural household has gone up from Rs 6,426 in 2013 to Rs 10,218 in 2019, and this figure is only likely to have further increased. It also becomes important to remember that this scheme is merely one of many supporting farmers.

Bhandari said the government could also look at more agricultural infrastructure like cold storage chains, which will ensure that farmers are able to manage crops better and get fair prices for their produce.

Beyond material impact, Bhandari said, the scheme has birthed a national and state database of farmers who receive benefits directly from the government.

"This is a verified database that will always come in handy in terms of delivering future subsidies. And it can also be used as an alternate data mechanism that can be leveraged in times of crisis or climate change uncertainty," she said.

Pradhan Mantri Awas Yojana

The Pradhan Manti Awas Yojana or the 'housing for all' scheme is a flagship programme that aims to provide all weather pucca houses to eligible beneficiaries in both urban and rural areas.

The PMAY project, which was supposed to be finished by 2022, was halted during the pandemic. First, the PMAY Gramin was extended till March 2024, and eventually, the PMAY Urban received its extension to finish its target by December 2024, as it sanctioned 40 lakh new houses in the last two years.

Pradhan Mantri Awas Yojana - Urban (PMAY-U)

Debarpita Roy, a fellow at the Centre for Social and Economic Progress, said the independent houses component of the PMAY-U, where households have prior access to land, has performed well.

According to Roy, about 45% of the sanctioned houses under PMAY-U are yet to be completed, and a third of the committed central assistance is yet to be released.

PMAY-U is being implemented through four verticals: Beneficiary-Led Construction, Affordable Housing in Partnership, In-situ Slum Redevelopment, and Credit-Linked Subsidy Scheme. While the government provides financial assistance, state governments implement the scheme, including the selection of beneficiaries. As of August 2022, credit-linked subsidy has not been extended.

Roy said in the last year progress has been markedly slow for the affordable housing in partnership and slum redevelopment verticals, which are other segments in the scheme.

Pradhan Mantri Awaas Yojana – Gramin (PMAY-G)

The rural/gramin wing of the PMAY scheme tackles a much bigger target and has shown good progress, according to Hazarika.

The scheme saw an additional outlay of Rs 28,422 crore in the supplementary demand for grants in December. Hazarika adds that the allocation is likely to increase in the coming fiscal as the government approaches its target date.

Along the way, he said, the scheme has evolved to sanction beneficiaries beyond the Socio-Economic and Caste Census of 2011 and has accommodated beneficiaries who were previously left behind.

While the focus so far has been on providing pucca houses, Hazarika notes a need for a new component of assistance for the repair and replacement of dilapidated homes.

The cost of construction in rural projects are shared between the central and state government in the ratio 60:40 in plain areas, and 90:10 for north-eastern and Himalayan states. 

National Health Mission

The National Health Mission is also divided into rural and urban sub-sections. However, the scheme serves as an umbrella term that encompasses the majority of government health initiatives. Since public health and hospitals are treated as state subjects, the central government extends financial and technical support to states that further strengthen their healthcare systems through the initiative.

Subodh Kandamuthan, professor and director at the Kakarla Subbarao Centre for Health Care Management at the Administrative Staff College of India, Hyderabad, told BQ Prime that the pandemic highlighted the importance of the national health mission and preventive primary care.

The NHM's work became more visible as Accredited Social Health Activist and Auxiliary Nursing Midwifery health workers spearheaded the country's vaccination drive in rural areas, he said. The pandemic also altered behavioural patterns, with people opting to use telemedicine and visit health facilities for treatment only when necessary, he said.

"The impact of the scheme also includes how transparent the NHM has become. There is a common review mechanism, and everything is well documented. The public health infrastructure and the recent health and wellness centres are getting standardised throughout the country, and PHCs are also getting accredited based on quality," Kandamuthan said.

State budgets over time indicate the state health budget has shifted from primary care (preventive) to tertiary care (surgical and advanced procedures), he said.

"NHM budget should increase, and the focus should be on preventive primary care," Kandamuthan said. "We see that primary care allocation in a few states has gone down from 50% to 30% over the years, while the overall budget hasn’t increased a lot. If primary care is not strengthened, vulnerabilities in the healthcare system will continue."

He hopes that the focus areas of the NHM, like technology, including telemedicine and behavioural change communication, will continue.

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