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Sensible, not sensational

February 28, 2005

The United Progressive Alliance's Budget for 2005-06 is sensible, not sensational. It is forward-looking and realistic, not overly ambitious.

It reveals a determination to steer the country towards a more inclusive and equitable process of growth recognising that eliminating poverty is a prerequisite for accelerating human progress.

Many segments of population, not just India's corporate sector and taxpayers, have reason to smile. Women and children, the socially disadvantaged, the disabled, the poor, rural residents and others living in states and regions that have suffered from historical neglect stand to gain.

In many respects, the Budget has fulfilled the political expectations from the UPA's government. The government had promised to deliver on promises made in the National Common Minimum Programme.

The Left, in particular, has been actively -- and rightly so -- demanding that issues of unemployment, employment guarantee, health and education not be sidelined in the usual din surrounding foreign direct investments, liberalisation and export promotion.

Added to this have been the social and moral pressures created by the recommendations of the National Advisory Council that has focused on employment guarantee, health, elementary education, mid-day meals and expanding the reach and coverage of the Integrated Child Development Services.

The Budget has made a sincere attempt to give fair recognition to these causes. At the same time, increasing the reach of micro-credit, expanding employment opportunities, revamping industrial training, and initiating steps to revamp higher education are steps in the right direction.

The Budget's fiscal allocations indicate a genuine effort to correct many of the old inequalities and imbalances that remain the underlying cause of human insecurity and poverty.

In fulfilling the mission of ensuring the `greatest good to the greatest numbers' the government has tried to focus on the poorest and most neglected in society by concentrating on unemployment, limited access to health care, poor quality of education, inappropriate levels of skills and limited market reach.

Allocations to elementary education, health, ICDS, mid-day meals and for employment guarantee have been increased -- and in many cases, quite substantially. In the case of the ICDS, for instance, government has promised to open an additional 188,168 anganwadi centres in order to ensure universal coverage for all children.

There has been a near doubling of allocations for the mid-day meal programme increasingly recognised for its many positive benefits. Similarly, allocations to the provisioning of safe drinking water and sanitation have also gone up.

These increased allocations, when viewed as a package, reflect a refreshing thinking within government on the nature of human poverty. Unless there is simultaneous action along multiple fronts, the necessary complementarities and synergies between and across different poverty interventions cannot be established.

The thrust on job creation and strengthening the country's manufacturing base and competitiveness are welcome. Tax and other reforms aimed at mobilising additional resources appear sensible from a public finance viewpoint, though the equity implications of some of the measures will need to be assessed more carefully.

Of particular concern is the impact that this Budget will have on the lives of handloom weavers who could face increased threats of displacement and unemployment. Developing 'clusters', offering life and health insurance schemes and housing are no substitute for more comprehensive policy measures to promote security and offer protection to the lives of such people.

Finally, financial allocations are only one part of the story. Ensuring effective spending and appropriate outcomes are equally important. In this regard, three promises are most welcome.

First is the promise of introducing gender Budgeting. To this could be added Budgeting for children as well as a way of monitoring spending and assessing impact on the lives of people.

Second, there is a suggestion for ensuring effective devolution of financial resources to Panchayats -- an essential step towards promoting greater accountability and public action.

And thirdly, there is a promise of revamping the evaluation function -- to make it relevant and meaningful to make programmatic and policy corrections.

The UPA government has also indicated its willingness to engage more actively with civil society organisations in dialogue on policy reforms and on assessing development outcomes.

The sooner the UPA government delivers on these three promises, the more successful it will be in ensuring development outcomes that contribute to tangible improvements in the lives of people.

The author is Adviser UNICEF and Member, National Advisory Council.

Budget 2005-06: Complete Coverage

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