#dnaEdit: Costly cuts

Women and child development minister Maneka Gandhi’s opposition to the cuts in budgetary allocation to her ministry citing the adverse impact this could have on social welfare schemes is a timely warning to the NDA government. The 2015-16 Union budget’s emphasis on empowering the states by devolving a larger share of central taxes to the states has been accompanied by the Centre transferring a significant share of the financial burden on many centrally sponsored schemes to the states. Maneka’s worries stem from the reduction in allocation to her department’s flagship programme, the Integrated Child Development Scheme(ICDS), which caters to the nutritional needs of over 9 crore women and children. Her ministry was allotted Rs10,286.73 crore this year as compared to Rs21,000 crore in 2014-15, a decrease of 51 per cent. Maneka has criticised this massive shortfall of nearly Rs10,800 crore and also sought additional funds of Rs13,000 crore to take forward the ministry’s programmes. In her letter, she has worried that “focus will be lost on critical programmes related to malnutrition of children and pregnant/lactating mothers” and warned that the “political fallout of such a situation can be grave”.

The central government will now transfer 42 per cent of central taxes collected in the states’ kitty as against 32 per cent earlier. The Centre for Budget and Governance Accountability has estimated that states will receive about Rs1.68 lakh crore more in taxes as a result, while the reduction in central support for the schemes is only Rs1.08 lakh crore. However, some poorer states have complained that the increased devolution is disproportionate to their dependence on central schemes. Bihar Chief Minister Nitish Kumar and Odisha CM Naveen Patnaik have vociferously opposed the retreat of the Centre from welfare schemes that it had originally conceived. Nitish and Patnaik pegged the respective financial burdens incurred by their states at Rs10,000 crore and Rs2,000 crore, which the increased devolution would not cover. Besides ICDS, other important social welfare schemes have also been redesigned for greater state share in spending. The Sarva Shiksha Abhiyan was allocated Rs22,000 crore for 2015-16, nearly Rs6,000 crore less than last year; the Mid Day Meal scheme received only Rs9,236.4 crore, a cut of around Rs4,000 crore; and the National Rural Health Mission faced a 17 per cent budgetary cut.

This transfer of financial responsibility to the states has obviously been driven by the onus of reducing the Centre’s fiscal deficit and painting a picture of improving financial health to investors. States, while driven by these same motives, are also perpetually fighting a battle to meet burgeoning non-plan expenditure like payment of salaries and loan repayments. Moreover, the states’ social spending priorities could vary from the Centre’s and impact the funding on these schemes. In this scenario, Maneka’s fears of loss of “focus” on important schemes cannot be dismissed lightly. Nearly, one-third of Indian children are underweight and the country has the highest rates of neonatal and maternal mortality. However, UN studies have shown that the percentage of underweight children has fallen from 43 to 30 per cent and neonatal mortality has declined by 49 per cent between 1990 and 2013. This period has coincided with the intensification of the ICDS and other central schemes. Any decrease in funding poses the danger of these significant gains being reversed. Maneka must be credited for showing the courage to speak up for her ministry at a time when the dominant view is that the Prime Minister brooks no dissent in matters of governance.