Union Budget: Water sector and climate change have not received the priority they deserve

River-1452680034_835x547

In an incisive analysis of the Union Budget 2020, the South Asia Network on Dams, Rivers and People (SANDRP) has called the water-environment sectors a disappointment:

The Water & Environment sector, including the Agriculture, Environment & Forests, Urban Development, Ganga and & Other Rivers, Water Resources Ministry, Rural Employment Program and Rural Drinking Water Mission, seems to have seen disappointment from the allocations in Union Budget 2020-21 presented by the Union Finance Minister Smt Nirmala Seetharaman to the Parliament on Feb 1, 2020, most independent observers have concluded. The Budget has proposed some welcome measures in solar power and rural infrastructure sector. But on the whole, considering the situation in Water Sector & Climate Change impacts already upon us, and considering the various statements from the government, these sectors have not received the priority they deserve.

WATER SECTOR

A report on India Water Portal[i] concluded, “Budget fails to allocate enough to turn the rhetoric of tap water to each household into reality.” In 2020-21 budget, Rs 39,029 crore are proposed for the water sector spread across the Ministry of Jal Shakti, Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Development and Ministry of Housing and Urban Affairs, around 6% more than last year’s budget. During 2019-2020, against the proposed Rs 36,883 crore, the revised budget allocation had decreased to Rs 31,110 crore, a 16% decrease.

The new ‘Jal Shakti’ Ministry (MoJS), under which there are Department of Water Resources, River Development and Ganga Rejuvenation (DoWR for short) and Department of Drinking Water & Sanitation (DDWS), has been allotted a budget of Rs 30,478 crore, 8% more than last year’s budget. In the DoWR, as usual, the key share has been allocated to the major and medium irrigation projects. Out of the total allocation of Rs 8,960 crore for the DoWR, Rs 5124 crore has been provided to the PMKSY. The Dept of Water Resources allocations includes – Har Khet Ko Pani (1,050 crore), Flood Management and Border Areas Programme (750 crore), Atal Bhujal Yojana (200 crore), servicing of loans from NABARD under PMKSY (2675 crore) and special package for Vidarbha and Marathawada (400 crore). All of Rs 2675 is for debt servicing the loan to NWDA, National Water Development Agency, the agency under DoWR in charge of doing studies about River Linking Proposals.

PMKSY: Outlay for 2020-21 Rs 11127 Cr. BE[ii] 2019-20 was Rs 9682 Cr, reduced in RE 2019-20 to Rs 7896 Cr. Allocation for PMKSY comes from three different demands: Demand 1 for Ministry of Agriculture and Farmers Welfare, Demand 61 for Ministry of Jal Shakti and Demand 86 for Ministry of Rural Development (Dept of Land Resources) for Watershed Development work.

The PMSKY allocation, as per the “Outputs and Outcomes Budget” OOB) for Demand 61 for DoWR, includes Creation of additional groundwater abstraction structure: 4779 in Assam (to irrigate 19116 ha and benefit 19643 farmers), 473 in Arunachal Pradesh (to irrigate 1785 ha and benefit 3350 farmers), 2512 in Gujarat (to irrigate 3768 ha and benefit 3655 farmers) and 231 in Tripura (to irrigate 339 ha and benefit 851 farmers). This is particularly shocking in case of Gujarat, one wonders where in Gujarat they still have areas using less than 70% of the groundwater potential (the condition noted in the footnote of the OOB. Incidentally, most of the targets for outcomes noted in the OOB of Demand 61 carry the tage “Targets not amenable”, so they are meaningless. More pertinently, the Budget document should have carried the reporting of the OOB for the current and previous year to report achievement against the projections, but these are not there with the budget documents, nor can it be found on the website of the MoJS, so how can anyone ascertain the actual performance?

The OOB for Demand 61 that also includes the National Ganga Plan and Ghat Works of Namami Gange notes in footnote that even the inspection of the Gross Polluting industries is still incomplete, which shows there is such a big hole in claim of the Uttar Pradesh Chief Minister and Union Home Minister that Ganga has been cleaned. New STPs and industrial effluents treatment plants are still being planned and implemented.

JJM: Rs 11500 Cr. BE 2019-20 and RE 2019-20 Rs 10001 Cr. The OOB for this says that Target is to achieve additional 1.15 crore functional household Tap Connections by March 2021, so the budget is Rs 1000 on an average per household tap connections. Its not clear if each house will get one connection or multiple connections.

For the Department of Drinking Water and Sanitation, there is no significant change in the total allocation of Rs 21,518 crore INR as compared to last year’s Rs 20,061 crore. The Jal Jeevan Mission (JJM) and National Rural Drinking Water Mission has been allocated Rs 11,500 crore. This does not live up to the pre-budget expectations.

SBM (Swachh Bharat Mission) (Rural): Rs 9994 Cr, same as BE 2019-20.

SBM (Urban): Rs 2300 Cr, BE 2019-20 Rs. 2650 Cr.

National Ganga Plan and Ghat works: Rs 800 Cr. BE 2019-20 was Rs 750 Cr, RE 2019-20 was Rs 353 Cr.

NRCP: The National Rivers Conservation Program allocation has been hugely reduced to Rs 840 Cr from BE 2019-20 allocation of Rs 1220 Cr and RE 2019-20 allocation of Rs 1200 Cr. All of that money has been allocated for use in Ganga Basin, which means there is no money here for the rest of the rivers.

Allocation for Atal Bhujal Yojana is a new addition after its approval from the cabinet in Dec 2019.

AGRICULTURE

The agriculture agenda of the Finance Minister in the budget had 16 points and started with controversial non-starters like implementation of Model Contract Farming Act, Land Leasing Act and Agriculture Markets reforms act. This seems more like corporate driven agenda. States like Kerala have been quick to announce that it will not allow contract or corporate farming. Centre’s 2016 model land leasing act do not have too many takers either.

Many of the 16-point proposals in the Budget on agriculture are statements of good intent and do not really offer anything new[iii]. Ashok Gulati rightly asked[iv] in this context: “It looks like a long laundry list of wishes and intentions, which are good, but will they deliver? How much money and effort is being put to each one of these sixteen measures?” On promoting use of organic fertilizer use, Gulati underlines the need to provide level playing field and concludes: “the FM has shied away from biting this bullet.” Down to Earth also notes[v]: “But, despite the statements and support for promotion of natural farming and reduction of chemicals, the allocation for organic farming was miniscule and negligible… The task force on organic and non-chemical farming constituted by the Union Ministry of Agriculture and Farmers’ Welfare in 2016 recommended an annual budgetary allocation of at least Rs 12,500 crore for promoting organic farming in India.” Compare that with the allocations in 2020-21 Budget and with the allocation for Chemical Fertilisers around Rs 70-80 000 Crores.

budget

Ramesh Chand (member, NITI Ayog) is expectedly happy[vi] about reforms proposed (Contract Farming, Land Leasing and APMC) and names one “progressive” state for each of these reforms, but even these have yet to implement them. It’s clear there is very little enthusiasm among the states to adopt these reforms which most would see against the interests of farmers.

The “Business Standard” Edit aptly titled “Long on Ideas” noted[vii] that most of the 16 initiatives proposed in the Budget to reform agriculture depend on PPP (Public Private Partnership) feasibility, but noted, “The PPP is also a by and large failed model of development.” It says the Budget has noted large number of imperatives including support for allied activities like fisheries, animal husbandry, bee-keeping, etc, “But the Budget has failed to conceive sound stragies to meet these imperatives.

AR Vasavi[viii] makes an apt comment on Seeds initiative: “Citing the need to conserve seeds and recognise the role of rural women, the FM suggested a scheme called Dhanyalakshmi in which women’s self-help groups will be able to get loans and support to set up seed storage centres. Such a suggestion is perhaps meant to hide the fact that the government has been active about subordinating the nation’s farmers to international seed regimes, including the corporate control of seeds via GMOs.” And also on water conservation in 100 water stressed districts: “Attempts to address the severe water crisis in the nation is linked to promoting new water conservation schemes in 100 water-stressed districts of the nation but no substantial allocations or plans have been made to have an integrated water use and conservation policy.”

Critics have noted[ix] that % allocation the budget for the Schedule Castes and Schedule Tribes is below their proportion on the population. Similarly the fisherfolks are also disappointed[x] with the allocations in the budget for the newly formed Department of Fisheries: “there is little to celebrate in the Budget 2020 from the point of view of traditional and small-scale fish workers who are engaged in capture and extensive culture fisheries in both inland and marine sectors”.

MGNREGP: Outlay for 2020-21 at Rs 61500 Cr[xi], below the RE 2019-20 of Rs 71002 Cr and also below BE 2018-19 of Rs 61815 Cr. This is a major let down, everyone agrees.

CLIMATE CHANGE

The phrase “Climate Change” appears in the speech of the Finance Minister’s budget speech on Feb 1, 2020[xii] (it did not even figure there in budget speech on July 5, 2019) only in the context of CDRI (Coalition for Disaster Resilient Infrastructure), the international initiative that India initiated in 2019, besides in the name of the Ministry of Environment and Forests.

Allocation for National Adaptation Fund under MoEF goes down[xiii] below actual expenditure in 2018-19 (109 Cr) and BE 2019-20 (100 Cr) to Rs 80 Cr in BE 2020-21.

While the Finance Minister’s statement about phasing out old coal plants is a welcome signal that day of coal are over in changing climate, the allocation of Rs 700 Crores for the Exploration of Coal and Lignite seems to give a contrary signal. There are many other contrary signals[xiv] when we look at the budget allocations for Coal and Power ministries.

SOLAR ENERGY

While the budget has a number of welcome proposals for Solar Power, the reduction in allocation for this sector to Rs 2150 Cr from BE 2019-20 Rs 2480 Cr contradicts this sentiment.

The government announced removal of 20 per cent import duty on solar cells and panels in the Budget, with immediate effect. According to the Budget documents, the customs duty on solar cells and solar cells assembled in modules or made up into panels was reduced from 20 per cent to zero per cent[xv].

Solar pumps have emerged as a key tool for the government to achieve its ambition of doubling farmers’ income by 2022. Rajasthan is one of the few states to have taken a lead in popularizing solar pumps at a mass scale in rural areas and the Budget announcement is likely to add further impetus.[xvi] “Now, I propose to expand the scheme to provide 20 lakh farmers for setting up stand-alone solar pumps; further we shall also help another 15 lakh farmers solarise their grid-connected pump sets,” she said in her speech.

The Kusum scheme is implanted by the energy department in Rajasthan and has set a tariff of Rs 3.14 per unit at which the department will buy power from farmers or investors. But the solar industry in the state said the government needs to increase the rates to attract farmers or investors to the scheme. The Ministry of New and Renewable Energy, which is implementing the scheme nationally, also provides 40 paise as subsidy which means the cost of power to discoms comes to Rs 2.66 per unit.

India aims to boost solar power generation by encouraging the installation of panels along rail tracks and on barren land, the finance minister said.[xvii] “A scheme to enable farmers to set up solar power generation capacity on their barren/fallow lands and to sell it to the grid would be operationalized,” Nirmala Sitharaman said in her budget speech. She said a proposal is under consideration to set up large solar power capacity alongside rail tracks and raised the outlay for the renewable energy ministry by 48% for 2020/21.

IN CONCLUSION

Finance Minister Smt Nirmala Seetharaman’s record breaking long Budget speech is long on ideas and statements, but when it comes to details and actual allocations, we see large number of disappointments, let downs and contradictions. This is second disappointment close on the heals of the Economic Survey that missed noting crucial ground realities in Water Sector[xviii].

END NOTES:

[i] https://www.indiawaterportal.org/articles/whats-there-water-budget-kitty

[ii] BE: Budget Estimates; RE: Revised Estimates

[iii] https://www.thehindubusinessline.com/opinion/budget-a-mixed-bag-for-farmers/article30727955.ece#

[iv] https://indianexpress.com/article/opinion/columns/agriculture-farming-sector-income-budget-2020-6246681/

[v] https://www.downtoearth.org.in/blog/agriculture/union-budget-2020-21-big-talk-on-natural-farming-but-no-support-69131

[vi] https://www.thehindubusinessline.com/opinion/mega-plan-for-farm-revival-laid-out-in-the-budget/article30715606.ece

[vii] https://www.business-standard.com/article/opinion/long-on-ideas-120020600030_1.html

[viii] https://indianexpress.com/article/opinion/columns/budget-economic-survey-2020-nirmala-sitharaman-6247925/

[ix] https://www.cenfa.org/national-financial-institutions/dalitadivasibudget/

[x] https://www.cenfa.org/indian-economy/when-the-wealth-creators-are-invisibilised/

[xi] https://www.indiabudget.gov.in/doc/Budget_at_Glance/bag7.pdf

[xii] https://www.indiabudget.gov.in/budgetspeech.php

[xiii] https://www.indiabudget.gov.in/doc/eb/sbe25.pdf

[xiv] See for example: https://www.cenfa.org/press-releases/a-case-of-missing-the-wood-for-the-trees-analysis-of-budget-2020/

[xv] https://energy.economictimes.indiatimes.com/news/renewable/budget-2020-govt-removes-20-per-cent-customs-duty-on-solar-cells-panels/73862640

[xvi] https://energy.economictimes.indiatimes.com/news/renewable/budget-2020-solar-power-pumps-to-light-up-farmers-fortunes-in-rajasthan/73860773

[xvii] https://energy.economictimes.indiatimes.com/news/renewable/india-bets-on-barren-land-rail-tracks-to-raise-solar-power-capacity/73862634

[xviii] https://sandrp.in/2020/02/01/economic-survey-2020-where-is-the-ground-reality/

Source: https://sandrp.in/


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s