After uproar, India ups budget for some social welfare sectors

A passenger sleeps along with her children at a railway station on a hot summer day in Allahabad, May 26, 2015.-REUTERS/JITENDRA PRAKASH/FILES

Fri Jul 31, 2015

The government on Friday sought parliamentary approval to raise federal spending on social welfare, months after opposition lawmakers and Prime Minister Narendra Modi's own officials slammed his cuts in spending.

Modi's finance ministry plans to raise the budget for women and child welfare, as well as sanitation programmes, by around 40 percent, a government document tabled in parliament showed.

Modi in February redirected funds from social programmes towards infrastructure, asking states to fill the gap. He hoped this would fasten the pace of economic growth, but critics said it could endanger the country's most vulnerable. (reut.rs/1HrmVfy)

The changes, once approved, will come as a relief for Modi's women and child welfare minister, Maneka Gandhi, who had protested after her ministry's budget was more than halved to $1.62 billion. The new proposal put her budget at $2.24 billion.

The bulk of additional funds will go to a child welfare scheme that provides free food to 85 million children. Gandhi had warned the finance minister of political fallout if the focus on malnutrition was reduced.(reut.rs/1Kh3aYK)

The government also proposed to increase the budget for the drinking water and sanitation sector by 43 percent to $1.39 billion.

Health officials had also complained about a shortage of funds in the sector. The main health department will see its budget rise by 2 percent, while the budget to fight HIV/AIDS will see a nominal increase of $1,500. The HIV prevention programme has been suffering funding shortages in several states.

While unveiling the new policy shakeup in February, the government said lower federal welfare spending would be compensated for by giving state governments a larger allocation of tax revenues. But many poorer states complained, saying they were facing net losses under the new policy.

Modi's government had denied social budgets were being squeezed, saying India was going through a reset of the fiscal architecture by providing states more money.

Naresh Saxena, an adviser to the United Nations Children's Fund (UNICEF), welcomed the move but called for more focus on social sectors.

"It is a sign that the central government has to take on the majority of the burden for helping the most disadvantaged groups," Saxena said. "Still, social spending is too low."

(Reporting by Aditya Kalra and Andrew MacAskill; Editing by Nick Macfie)