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Ch. Prashanth Reddy

For many planners, poverty is an "abstract kind of thing''. Some are born in villages and still go back now and then, but others have become really cosmopolitan and fly more often to the West than stay in villages.

HYDERABAD, Feb 26

Is there any elitist bias in Budget making in India?

Of course, there is if we go by the contention of Dr S. Mahendra Dev and Dr Jos Mooij, Director and Visiting Fellow respectively at the Centre for Economic and Social Studies (CESS) here.

The two economists say that an analysis of the 12 Budget speeches between 1990 and 2001 shows that the poor are very important in the justification of the Budgets. However, despite all the lipservice, "there is an evident elitist bias in social sector policy making''.

They say the Budgetary contents reveal that not much priority is given in India to social sector expenditure. The levels of expenditure on social services and rural development in the 1990s are low, as compared to 1980s and also as compared to other developing countries and even as compared to international standards developed by the United Nations Development Programme.

India spends around 6 to 8 per cent of its Gross Domestic Product (GDP) on the social sector. From 1990-91 to 1998-99, the share in GDP ranged between 6.78 to 6.94 per cent. In 1999-2000, a higher level 7.55 per cent was reached but this could be partly due to an increase in salaries as a result of recommendations of the Fifth Pay Commission.

The duo feel that many policy makers and economic advisors to the Government seem to regard the Plan in general and social sector spending in particular as residual. In times of a fiscal crisis it is in the social sector that the first Budget cuts are made.

"This elitist bias'', they say, is not surprising. For many planners, poverty is an "abstract kind of thing''. Some are born in villages and still go back now and then, but others have become really cosmopolitan and fly more often to the West than stay in the Indian non-urban environment.

Generally, they contended, the Indian policy elite comes from the upper class and caste groups, and even when this is not the case, they stand apart from the majority of the Indian population because they are well educated in good public or private schools and universities, sometimes even abroad.

Besides, many have a background in economics, and are therefore used to model and conceptualise the world in particular ways. "It is very likely that these experiences (and also lack of experiences) give them a particular (and partly shared) worldview, which probably differs quite a lot from how a poor agricultural labourer in Rajasthan and Orissa views the world''.

Nevertheless, the CESS economists say that this bias in policy making, although not preferable, is inevitable. Only well educated people with lot of resources are able to climb up to the level of advisor to the Planning Commission or Secretary in the Ministry of Finance. "It would not surprise us, however, if this bias in policy making is becoming even more pronounced in these days of globalisation''.

For instance, they pointed out that there was a large group of people for whom globalisation had so far only posed threats. The handloom weavers and small farmers were threatened by WTO while the labourers working in industries were threatened by cheap imports. On the other hand, there was a large urban middle class benefiting from opening up of the markets, enjoying western consumption pattern and regularly travelling abroad. The social divide between the two groups was becoming wider than narrower.

The two emphasise that there is an urgent need for stepping up social sector expenditure. At the same time, they feel that, given the current budget making process, it is very unlikely that is going to happen in the near future. A substantial increase in allocation for the social sector is only likely to happen when something changes in the budget making process.

In this regard, they say, movements towards decentralised planning and increasing awareness among the public about budgets are to be welcomed. Such movements can play a very important role in involving wider group of people in the budget making process and, thereby, in changing the policy bias and the content of the allocation decisions, they added.

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