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The Budget for 2023-24 has attempted to address the aspirations of different segments of society. It is a good effort in a difficult situation. But how far do the Budget provisions go to meet the two fundamental goals of growth and stability.
The two must go together for sustained growth over the medium term, which will be the answer to many of India’s socioeconomic problems.
Growth is affected by the size of government expenditure and its revenue and capital components. Government expenditure is budgeted to grow at 7.5% while nominal GDP growth is estimated to fall from 15.4% in 2022-23 to 10.5% in 2023-24.
Thus, the total expenditure relative to GDP is shown to fall from 15.3% in 2022-23 (RE) to 14.9% in 2023-24 (BE). The composition of government expenditure, however, would be growth positive.
Increase in the Centre’s capital expenditure is budgeted at 37% while that in revenue expenditure is only 1.2%. According to estimates by the Reserve Bank of India (2019, 2020), the multiplier associated with central government capital expenditure is 2.45, while that for revenue expenditure is 0.45. Investment expenditure by central public sector undertakings (PSUs) is budgeted to fall by 0.2% points.
However, State capital expenditures may increase as a result of central grants to the States meant for capital asset creation amounting to 1.2% of GDP, augmentation of States’ fiscal deficit to GDP ratio to 3.5%, and the facility of 50 years of interest-free loans for creating capital assets in 2023-24.
It is difficult to ascertain the extent to which States might utilise these facilities. Growth may also be stimulated indirectly due to an increase in private disposable incomes following tax slab adjustments applicable to the new income tax regime. Real growth in 2023-24 may be a little above 6%.
According to the Fiscal Responsibility and Budget Management (FRBM) Act, as amended in 2018, the Centre is mandated to take appropriate steps to limit its fiscal deficit to 3% of GDP by March 31, 2021 although this is an operational target.
The mandated target pertains to the Centre’s debt-GDP ratio which is to be brought down to 40%. If there is a deviation from the fiscal deficit-GDP ratio of 3%, the Centre is required to state the reasons. In the medium-term fiscal policy cum Fiscal Policy Strategy Statement (MTFP), the Centre has attributed the deviation of the budgeted 5.9% fiscal deficit-GDP ratio to external economic conditions. For this reason, the Centre has also not provided the medium-term GDP growth forecasts.
Opinion
Neglecting the health sector has consequences (Page no. 7)
(GS Paper 2, Health)
The stagnant allocations in the Budget for health, education and nutrition reminded me of the film The Last Czars. Emperor Nicholas asks his communist captors why he has been imprisoned despite loving Russia and being loyal to it.
The captor replies, “You loved Russia, but not the people.” In today’s world of governance, are Budgets a reasonable way of assessing this quality in our leaders for those who elected them?
Budgets are boring documents if we look at them only in terms of financial allocations to sectors. Yet, they are eagerly awaited because they validate the true intent and vision of the government — who or what it “loves” more.
And such a judgment is based on the extent to which the Budget helps in furthering the equitable access of all citizens to basic public goods.
Soon after World War II left the U.K. devastated, the National Health Service was launched as a means to revive society. Envisioning a welfare state, the social economist William Beveridge sought to address the “five giant evils: want, disease, ignorance, squalor and idleness.”
If India’s vision is driven by such an articulation, then investments need to be prioritised first towards basic services such as nutrition, health, employment, education, environmental sanitation and hygiene, rather than airports, highways and speed trains.
It may be argued that the government has been fair in this year’s Budget by providing free foodgrains to 80 crore poor people; developing 500 backward blocks; broadening access to housing, clean water, and toilets; providing employment through the rural employment guarantee scheme; and providing opportunities for skill development.
But these can only have partial gains; they do not necessarily address the issue of widening inequality. Besides, for sustainable, long-term growth of the country, expanding universal access to high quality education, healthcare and nutrition (not just foodgrains but proteins and other supplementary foods that are currently unaffordable) is imperative.
No country can go far if a significant proportion of its population is illiterate, unhealthy or malnourished. All the countries that are developed today invested well in education, health and nutrition.
Studies in the U.S. show that after the Reagan era, innovation and scientific capability took a hit when public investment in education was reduced to push privatisation.
Even Nicaragua, despite its economy being in shambles, invested in health and education. The tragedy is the failure of our political leadership, since Independence, in understanding the centrality of universal education and health to growth.
Explainer
The saga of a ‘spy’ balloon in U.S. airspace (Page no. 8)
(GS Paper 3, Science and Technology)
Last week, the U.S. shot down a Chinese ‘spy’ balloon, days after the surveillance device was first spotted over American airspace, bringing the dramatic saga to a climax and dealing yet another blow to the already strained diplomatic relation between the two sides.
Reports of a massive white orb, believed to be the size of three school buses, floating high above the U.S. State of Montana captured global attention earlier this month.
Ending speculations, American defence and military officials confirmed that the reconnaissance balloon had travelled from China, entered the air defence zone north of the Aleutian Islands on January 28, subsequently moved over land across Alaska and into Canadian airspace and crossed back into the U.S. over Idaho.
President Joe Biden was briefed on the matter and the military considered shooting down the balloon which Pentagon believed was a Chinese surveillance tool carrying sensors and equipment to collect information about military and other strategic sites like Montana, which is home to one of the nation’s three nuclear missile silo fields.
Though the Pentagon acknowledged that the balloon was unarmed, it decided against aerial action at the time due to risks for those on the ground owing to its massive size and altitude.
As a precautionary measure, the U.S. Federal Aviation Administration paused aerial activity at three airports. As the news of the ‘spy’ balloon traversing American skies caused a sensation, the Chinese Foreign Ministry acknowledged that the balloon was from China after initial reluctance, but rejected claims of spying.
It insisted that the balloon was an errant civilian airship used mainly for meteorological research that went off course due to winds. “The Chinese side regrets the unintended entry of the airship into US airspace due to force majeure.
The Chinese side will continue communicating with the US side and properly handle this unexpected situation caused by force majeure,” the statement said. Beijing also expressed “regret” over the incident and insisted that it respects the sovereignty of other countries.
Long before the shoot down, U.S. officials took steps to protect against the balloon’s collection of sensitive information, mitigating its intelligence value to the Chinese.
Ahead of the mission, NASA assessed the debris field based on the trajectory of the balloon, weather and estimated payload of sensors.
What has the Union Budget allocated to minorities? (Page no. 8)
(GS Paper 2, Social Justice /Economy)
The Union Budget for 2023-24 came with a reduction of 38% in funds for the Ministry of Minority Affairs. The fund crunch is likely to impact spheres of madrasas besides general school education, higher research and local development in areas of minority concentration.
The worst affected scheme under the all-encompassing fund crunch is the Education Scheme for Madrasas which suffered a whopping 93% cut in allocation, down to ₹10 crore from the ₹160 crore in the previous financial year.
The allocation of ₹160 crore was itself a comedown from ₹174 crore in the previous fiscal year. The total allocation for minorities’ educational uplift was slashed to ₹1,689 crore from ₹2,515 crore last year with schemes for research as well as pre-matric scholarships experiencing a fund withdrawal or downsizing.
The allocation for research schemes for minorities, including Muslims, Christians, Sikhs, Jains, Buddhists and Parsis was reduced by a little more than 50%, down from ₹41 crore last year to ₹20 crore this year.
On the same lines, the government hugely cut the funds for pre-matric scholarships for minorities, down from ₹1,425 crore last year to ₹433 crore in the upcoming financial year.
Completing the picture for fund-strapped schemes was the Pradhan Mantri Jan Vikas Karyakram (PMJYK). The allocation for PMJYK came down from ₹1,650 crore to ₹600 crore this year.
The scheme aims to provide socio-economic infrastructure and elementary amenities in minority concentrated areas. It was said to be a key part of the government’s Sabka Saath, Sabka Vikas initiative.
The latest Budgetary setback comes on the heels of the scrapping the Maulana Azad National Fellowships for higher education.
The Nai Udaan Scheme meant to help minority students prepare for the Union Public Service Commission examinations was grounded. It was argued that the scheme overlaps with other similar affirmative plans of the government.
The decision to cut funds for socio-economic and educational uplift of minorities has cast a shadow far and wide. For instance, the Scheme for Leadership Development of Minority Women which received ₹2.5 crore last year is now down to ₹10 lakh as per the new Budget.
The HamariDharohar Scheme for conservation of minorities’ culture and heritage which got ₹2 crore earlier, is now down to only ₹10 lakh. The worst sufferer was the Skill Development Initiative among minorities.
It received ₹235 crore in 2022-23 but is now down to merely ₹10 lakh. The funds for Nai Manzil, an integrated educational and livelihood scheme, were brought to just ₹10 lakh from the earlier ₹46 crore.
Text & context
CAR T-cell therapy: the next step towards a holistic treatment of cancer (Page no. 9)
(GS Paper 3, Science and Technology)
The three major forms of treatment for any cancer are surgery (removing the cancer), radiotherapy (delivering ionising radiation to the tumour), and systemic therapy (administering medicines that act on the tumour).
Surgery and radiotherapy have been refined significantly over time whereas advances in systemic therapy have been unparalleled. A new development on this front, currently holding the attention of many researchers worldwide, is the CAR T-cell therapy.
Systemic therapy’s earliest form was chemotherapy; when administered, it preferentially acts on cancer cells because of the latter’s rapid, unregulated growth and poor healing mechanisms.
Chemotherapeutic drugs have modest response rates and significant side-effects as they affect numerous cell types in the body. The next stage in its evolution was targeted agents, also known as immunotherapy.
Here the drugs bind to specific targets on the cancer or on the immune cells that help the tumour grow or spread. This method often has fewer side-effects as the impact on non-tumour cells is limited. However, it is effective only against tumours that express these targets.
Chimeric antigen receptor (CAR) T-cell therapies represent a quantum leap in the sophistication of cancer treatment. Unlike chemotherapy or immunotherapy, which require mass-produced injectable or oral medication, CAR T-cell therapies use a patient’s own cells. They are modified in the laboratory to activate T-cells, a component of immune cells, to attack tumours.
These modified cells are then infused back into the patient’s bloodstream after conditioning them to multiply more effectively.
The cells are even more specific than targeted agents and directly activate the patient’s immune system against cancer, making the treatment more clinically effective. This is why they’re called ‘living drugs’.
In CAR T-cell therapy, the patient’s blood is drawn to harvest T-cells which are immune cells that play a major role in destroying tumour cells.
Researchers modify these cells in the laboratory so that they express specific proteins on their surface, known as chimeric antigen receptors (CAR). They have an affinity for proteins on the surface of tumour cells.
This modification in the cellular structure allows CAR T-cells to effectively bind to the tumour and destroy it.The final step in the tumour’s destruction involves its clearance by the patient’s immune system.
News
LWE-related violence down by 76% in 2022 from cases in 2010, says Shah (Page no. 11)
(GS Paper 3, Internal Security)
Union Home Minister Amit Shah on Tuesday said that violence related to Left-wing Extremism (LWE) had come down by 76% in 2022 as compared to 2010, owing to the Centre’s three-pronged strategy — a resolute approach to curb extremist violence, better coordination with the affected States and development through public participation.
Mr. Shah, while chairing the meeting of the Parliamentary Consultative Committee on LWE, said that for the first time in four decades, the number of deaths of civilians and security forces was under 100 last year.
The Home Minister said the number of civilian and security personnel killed in LWE incidents declined to 98 in 2022 from 1,005 in 2010. The number of districts affected dropped from 90 to 45.
Sharing details of the measures taken by the Ministry of Home Affairs (MHA), he said since 2019, the armed forces had established 175 new camps to plug the security vacuum in the LWE-infested zones.
Mr. Shah said that as a result of the efforts, success had been achieved against the LWE outfits in difficult areas such as Buddha Pahad (Jharkhand) and Chakarbandha (Bihar).
The Border Security Force’s air wing has been strengthened with the induction of new pilots and engineers and the Home Ministry has taken initiatives to choke the funding to banned outfits.
Stating that the Centre had made efforts to improve coordination with the governments in the affected States without any party or ideology-related bias, the Minister said funds were provided to the State police forces for modernisation and assistance related to construction of fortified police stations.
Construction of 17,462 km of roadways had been sanctioned to improve road connectivity, of which work on about 11,811 km had been completed.