Introduction: The Demographic Crisis
The Economic Survey of India 2023-24 cautions of a contradictory demographic crisis, showing the urgent need for governmental measures to address the care needs of India’s elderly population. The India Ageing Report 2023 warns of similar risks. According to the research, senior persons suffer from chronic illnesses and physical disabilities, particularly in rural areas.
Conforming to estimates, by 2050, 20.8% of the population will be elderly, highlighting the need for long-term intervention. The largest problem for the government is meeting the welfare needs of crores of economically challenged people. In the 18th Lok Sabha’s maiden budget, the finance minister’s single mention of the word ‘welfare’ served as a clear warning that the Union Budget 2024-25 will be devoid of any significant policy commitments or allocations to address these issues.
Demographic Crisis: Insufficient Support for Informal Sector Workers
Budget 2024-25 prioritizes the demands of the organized sector and salaried classes while completely ignoring the economic and social security needs of millions of informal and unorganized sector workers. The Union government tends to prefer satisfying political supporters with massive expenditures and overspending on the social sector.
This budget includes Rs 15,000 crore for the construction of Andhra Pradesh’s capital, Amravati, and Rs 20000 crore for the construction of the Bodhgaya temple corridor and highways in Bihar, which exceeds the budget allocated to welfare schemes such as the National Social Assistance Programme (NSAP), PM POSHAN, Smarthya, and others.
There were (minimal) expectations that the new government’s first budget would include funds to solve these issues. However, declining and stagnating spending on social security demonstrates that these issues continue to be of low relevance to the administration.
In line with the India Ageing report, about six crore senior people in India are currently living in poverty, with approximately 18.7% of the elderly living without any income. Even though, the NSAP, a key centrally sponsored initiative that provides non-contributory income support of Rs 200 to the aged and Rs 300 to widows and those with disabilities, has received only Rs 16 crore in additional funds.
The budget for this vital social security plan has been reduced to just 0.2% of the total budget outlay. The program’s allocation has remained constant at Rs 9,500 crore since 2016-17, as pension levels and beneficiary lists have not been changed.
MGNREGS: A Case of Underfunding
When adjusted for inflation, the allocations have declined in actual terms. With diminishing Union funds, the fiscal burden of maintaining sustainable pension payments has passed to the states. As a result, most states are now contributing 5 to 10 times more through their budgets. At a time when the country is facing an unemployment crisis, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has received only Rs 86,000 crore.
Although the actual spending for FY 2022-23 was Rs 90,805 crore, the budget for FY 2023-24 was just Rs 60,000 crore. This was eventually lowered to Rs 86,000 crore for FY 2023-24, matching the budget estimate for FY 2024-25.
Demographic Crisis: EPFO and Unorganized Sector Workers
This can be like adding a few extra pennies to a well and claiming it solves the drought issue. The People’s Action for Employment Guarantee (PAEG) estimates that Rs 2.72 lakh crore is needed to meet the total demand, featuring the budget’s substantial gap. PAEG estimated that Rs 2.72 lakh crore will be required to meet the demand for 100 days of work for 5.68 crore families in 2022-23. With six crore households working in 2023-24, the MGNREGS budget is woefully inadequate to satisfy demand. There are currently around 13 crore active workers enrolled in the initiative.
The Economic Survey of India notes that the MGNREGS is run as a supply-based plan, with jobs frequently unavailable when requested. In addition, when employment is supplied, the site does not register the desire for work. As a result, the actual demand for work surpasses what is displayed on the Management Information System (MIS) portal, which fails to reflect the true scope of rural hardship.
The Budget for 2024-25 announced many measures launched by the Employees’ Provident Fund Organisation (EPFO) to assist salaried employees and companies. One important step is that the government will repay employers up to Rs 3,000 per month for two years for EPFO contributions to their employees. However, pension and economic security initiatives for India’s 49.33 crore unorganized sector workers have received less attention.
Demographic Crisis: Contributory Pension Schemes Under Scrutiny
Contributory pension schemes are not faring much better either. The Atal Pension Yojana (APY) is the Narendra Modi government’s major contributory pension system for unorganized sector workers. In FY 2022-23, the actual spending on APY was Rs 725 crore. During this time, the number of subscribers grew from four crore at the start of FY 2022-23 to 5.2 crore at the end of the fiscal year. Even with an increase in members to approximately 6.17 crore as of January 2024, the government’s contribution to the scheme has remained consistent at Rs 512 crore during FY 2023-24.
Another contributory pension system under the Modi government, the Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM), experienced a hefty Rs 173 crore cut. The scheme’s budget dropped from Rs 350 crore in 2023-24 to Rs 177 crore in 2024-25. The plan was launched in 2019 to enroll two crore workers annually. After its implementation, just 45 lakh workers have been enrolled.
Even with unorganized sector workers’ aspirations, they remain excluded from contributory schemes like as the EPFO and the Employees’ State Insurance Corporation (ESIC), which are expressly established for the organized sector and provide comprehensive social security benefits. These schemes for the informal sector, like those covered in the Pradhan Mantri Jan Arogya Yojana, do not give complete social security. Rather, these plans are joined with current welfare programs, marking down their attention to the unique wants of unorganized sector workers.
E-Shram Portal and Its Integration
The budget address also mentioned the development and integration of welfare schemes on the e-shram portal, which was established in August 2021 as a single platform for registering unorganized sector workers and linking them to various social security schemes. Yet, just 29.48 crores of the 49.33 crore unorganized sector workers are registered on the platform.
Demographic Crisis: Contradiction Between Announced Goals and Budget Allocations
Before the budget, the finance minister declared that the primary goal of the budget would be to improve the “ease of living” for all citizens. The budget address began by stating the government’s desire to focus on four main pillars: annadata (farmers), mahilayen (women), gareeb (poor), and yuva (youth).
The inability to commit sufficient funds to social security and welfare programs undermines these declared priorities, resulting in significant budgetary gaps in schemes assisting critical portions of the population. Despite the opportunity to break with prior patterns, the Modi 3.0 government’s first budget is sadly predictable.
Conclusion: A Call for Better Implementation and Allocation
As India’s economic hopes grow, the government’s budgetary allocations and poor implementation of welfare initiatives show an awful image of supervision and neglect. The large reduction in key programming proves a continuous disregard for the most vulnerable citizens, keeping the benefits of economic expansion just out of reach of those who need them the most.