The Budget lacks the ‘power’ to transform services
- India’s Union Budget 2022-23 demonstrates a clear intent to prioritise investments in clean energy and sustainable development, in line with the country’s promises made at COP26 in Glasgow last year.
- The Budget is also an opportunity to turn the spotlight on policy conversations — since it sets the tone for reflecting on policies, schemes, and how they are implemented on the ground.
- Electricity and development sectors need a more integrated approach to achieve the vision set forth in instruments such as the Union Budget that guide policy implementation at other administrative levels.
Brief about Budget 2022-23 announcements for health and education
- The health sector witnessed a 16% increase in estimated Budget allocations from last year, medical and public health spending was reduced by 45% for 2022-23.
- The education sector also witnessed an 11.86% increase in allocations. Interestingly, despite the push for digital education, which now includes the e-Vidya programme (to boost online learning), last year’s revised allocation saw a reduction of 35%.
- Greater allocation of funds is welcome, even if marginally, but health and education policy documents at the national and State levels indicate, the aim of providing better health care gets stymied, in the absence of electricity and when power provisioning is not linked to desired outcomes.
Role of reliable energy in fulfilling budgetary expectations
- It is widely recognised that the availability of reliable electricity supply can improve the delivery of health and education services; 74% of the targets of the Sustainable Development Goals are interlinked with universal access to reliable energy.
- Despite this, 44% of schools and 25% of India’s health sub-centres and primary health centres remain unelectrified.
- For the Government’s proposed energy transition to succeed, these critical facilities require energy access first.
- The lack of integration of electrification requirements in development sector policy documents may be partly due to lack of information about electricity and development linkages, poor coordination mechanisms between the sectors and departments, and poor access to appropriate finance.
- Sometimes, multiple policies can complement each other to achieve the larger sectoral objectives.
- For example, in Assam, the Energy Vision document that lays out the electricity and development outcomes is to be applied in tandem with the Solar Energy Policy 2017 that operationalises this vision via an action plan.
Budget and constitutional provisions
- The Annual Financial Statement refers to the Union Budget of a year, as defined by Article 112 of the Indian Constitution (AFS).
- It is a statement of the government's expected receipts and expenditures for a certain fiscal year (which begins on 01 April of the current year and ends on 31 March of the following year).
- The Budget Division of the Finance Ministry's Department of Economic Affairs is the nodal body in charge of budget preparation.
- The Budget also includes the following items:
- Estimates of revenue and capital receipts,
- Ways and means to raise the revenue,
- Estimates of expenditure,
- Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year, and
- The economic and financial policy of the coming year, i.e., taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.
Stages of Budget
- In Parliament, the Budget goes through six stages:
- Presentation of Budget.
- General discussion.
- Scrutiny by Departmental Committees.
- Voting on Demands for Grants.
- Passing of Appropriation Bill.
- Passing of Finance Bill.
- Receipts: It show how much money the government has received. This comprises the money the government earns as well as the money it gets in the form of borrowings or loan repayments from states.
- Plan Expenditure: This term refers to any expenditures made in the name of planning (e.g., Five Year Plans). For example, expenditures on energy production, irrigation and rural development, road, bridge, and canal building, and so on.
- Non-plan Expenditure: Non-plan expenditure refers to all expenditures that are not part of a plan. Interest payments, pensions, statutory transfers to the administrations of States and Union Territories, and so forth.
- Providing reliable electricity for health centres and schools should be the responsibility of centralised decision-making entities at the State or national level.
- Some directives, such as those governing the use of untied funds, need to be more flexible in allowing these facilities to prioritise providing reliable and sustainable electricity.
- The provisioning of reliable electricity, in turn, improves the delivery of health and educational services.