Inequality in India:
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According to the World Inequality Report 2022, the top 10 percent of Indians had about 96 times more income on average than the bottom 50 percent.
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Oxfam International claimed that in 2021, India’s top 1 per cent owned about 77 per cent of the country’s wealth.
Constitutional mandate to reduce inequality:
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Directive Principles of State Policy: The policymaking “duty” of all governments is to follow Part IV of the Constitution – the Directive Principles of State Policy.
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Articles 38 and 39 :
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Article 38(1) states: “The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.”
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Article 39(c) states: The State shall, in particular, direct its policy towards securing – (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
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Constitutional provisions related to budget:
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Under Article 112 of the Constitution, the Annual Financial Statement (AFS) of estimated receipts and expenditure of the Government of India has to be laid before Parliament in respect of every financial year.
How Budget allocation worsened inequality in India?
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Declined health Budget: The health Budget has declined by a substantial 10% over the last year. This reduces the access to quality and affordable health services and increases out of pocket expenditure which can push people into poverty. This has serious concerns amidst the COVID-19 pandemic.
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Cut in Education budget: There has been a 6% cut in the education Budget over the last couple of years. The reduced expenditure in the education sector could reduce the opportunities for quality and affordable public education systems. Given that education has been a tool for poverty alleviation, the Budget cuts in the educational sector would amount to the institutionalization of endemic multidimensional poverty.
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Declined Social security expenditure: Social security expenditure has declined from 1.5% in 2020-21 to 0.6% of the Union Budget in 2022.This would deprive the people of the most basic services and entitlements.
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Reduced MGNREGA Supplements: The government supplements have reduced causing extensive distress in functioning of MGNREGA, thus undermining the legal guarantee of work on demand.
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Exclusion of beneficiaries: The households under the National Food Security Act (NFSA) are based on a percentage determined from the 2011 Census. The reduced allocation to the scheme could lead to the exclusion of eligible beneficiaries.
Way Forward:
The Budget is a policy that matters to all. There is a need for society to stand up and make sure that we are true to our constitutional commitment of building a more just and equal society as envisaged under the DPSPs. That is our most fundamental duty.