It is time for Union Budget to go local. See how Sikkim, Bihar and Kerala did it


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It is Budget time yet again. The experts flock to the media and meetings. They discuss what to spend on, but rarely debate how to do it. Women’s collectives and RK Laxman’s lurking ‘common man’ are absent from many such deliberations. The challenges of the last mile given India’s diversity and the community connection needed even for infrastructure development are often not the subject matter of such discourses.

It is time that ‘People’s Budget’ moved into people’s hands. What we need is a bottoms-up Budget reflecting people’s needs. Sabki Yojana Sabka Vikas—the annual people’s planning campaign under the Ministry of Panchayati Raj, that was started in 2017— and the Gram Panchayat Development Plan (GPDP) and ranking of village councils under the Mission Antyodaya are specific outcomes that should actually determine the Union Budget’s focus. A similar exercise at the basti level in every urban ward is urgently needed to capture the real-life challenges of the deprived people. Many states have been keen on this. A high employment rate and a large number of micro, small and medium production systems will emerge in the country if the Budget changes its approach toward community connection.

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Sikkim, Bihar, Kerala models

Budget discussions do not focus where they should. A sizeable sum is spent on direct benefit transfer (DBT) schemes where local governments have a constitutional role and responsibility. No one deliberates how Sikkim managed to bring down stunting, wasting and child malnutrition significantly between 2015-16 and 2019-21. No one talks about the use of MGNREGS in Sikkim for spring-shed development that enabled Gujarat-like tap water for nearly every household. No one talks about the state’s dairy sheds and the extensive use of cow dung and urine in promoting organic farming, cardamom plantations, and high-value crops like flowers, fruits and fodder. Women-led development, decision-making by community collectives, and a commitment to provide basic healthcare and education explain the success of Sikkim.

If Sikkim is small enough for ease of operations, then how did Bihar emerge as one of the leading states in providing safe drinking water through taps? The Bihar government fought court cases to ensure local ownership and participation of ward-level elected leaders (lower than Gram Panchayat leaders) in providing piped drinking water. Women’s collectives, the Jeevika programme and 50 per cent women elected in panchayats do make a difference in the deepening of local democracy. There have been challenges in the quality and regularity of tap water but local solutions are being found by giving maintenance responsibility to local people.

Kerala has one of the most accountable systems of local governance with many of its services accessible online. The Kudumbashree women’s collective holds elected panchayat leaders accountable. Tourism in Kerala is such a luxury as you do not come across mounds of waste plastic because cleanliness and good hygiene have become a way of life there. Beggars and shanties are not seen on the streets as most people have a home and a source of livelihood. You do not encounter the lowly paid workers demanding the extra tip for everything as everyone is paid a minimum wage to maintain the dignity of labour. Drivers have sleeping areas in hotels and rest houses and they do not have to curl up on their car seats.

The success of pro-poor public welfare schemes and the removal of asset deficits of the deprived people all over the countryhas been made possible through decentralisation, technology and community connection. Bank accounts for women, immunisation programmes, gas and electricity connections, rural housing, sanitation, and LED bulbs have been possible in big measures due to a community-led mission where every vertical empire contributes to horizontal delivery in 63,974 purposively selected villages as part of the Gram Swaraj Abhiyan in 2018. Economist Jean Drèze acknowledges gains in his November 2022 article in The Indian Express that “amenity improvements in the second period (2015-16 to 2019-21) are more a reflection of public policy and subsidies rather than rising incomes. The impact of public policy in this domain deserves appreciation.”

The Union Budget should attempt a similar consensus across governments (central, state and local), political parties and citizens to face up to the challenges of human capital, employment, and livelihoods that continue to pose threats to our economic dream. The East Asian miracle offers a human capital lesson. At home, the poverty decline in Kerala, Tamil Nadu, Himachal Pradesh, Sikkim, and Mizoram has to do with gender equality and human capital.

Focus at the local level

It is a very special 75 years moment in democratic India’s history that calls for a Developed India by 2047 for All. Education, health, nutrition, livelihood and skills are the pathway to the development of every citizen to the fullest human potential. Basic infrastructure and community connections in these sectors have improved over the last decade and a half. The challenge is to give it that thrust at the local level with technology as a means. India’s century can only emerge out of this consensus for social development and economic progress, cutting across states, regions, religions, castes and creeds. The Budget is its starting point.

We need to launch a panchayat and urban local body-led mission, in partnership with community collectives for development interventions. Better human capital alone will lead to private investments going to hitherto under-invested regions of the country. Good governance, infrastructure and human capital determine investment decisions and its time those opportunities become the sole focus of the Budget-making exercise. Businesses will have to be built on the foundations of human capital and women-led development process.

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Budget with a difference

The message is clear. Budget announcements must outline the ‘how’ of decentralisation, rather than be only statements of intent and allocation. Decentralised community action within the constitutionally laid down framework is the way forward. Local governments must be mandatorily assigned the responsibility for the 29 sectors in the 11th Schedule for rural areas and 18 sectors in the 12th Schedule for Urban areas. Stop expenditure in these sectors without the local government and community’s approval. Allow local governments to change Budget lines up to 30 per cent to begin with, based on the needs and priorities of the communities. Let us move from distrust to trust with real time monitoring, Adhaar linked direct benefit transfers,  financial and social audit, and technology as a means.

It is time for a Budget with a difference. How we spend is far more critical than how much we allocate. Value for money will come through local ownership of projects across sectors. The infrastructure and logistics thrust is good but let it also pass muster with local communities to enable integration, convergence, and coordinated action.

Our cost of infrastructure will come down if we invest in better community connections and technical institutional partnerships on new technologies and options. Systematised Detailed Project Reports need to be prepared and Budget lines need to be broken down into specific tangible activities.

It is only through a need focused, local government led, transparent thrust on human capital and livelihood diversification that Budgets will deliver outcomes for sustained human and economic progress.

Amarjeet Sinha is a retired civil servant. Views are personal.

(Edited by Ratan Priya)

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