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Main Findings of the Response on Union Budget 2009-10

• Total Developmental and welfare expenditure that may directly benefit the masses as proportion of total budget expenditure has gone down from 60 percent in 2008-09 RE to 57 percent in 2009-10 BE (Table-1).
• 24 percent increase in defence allocation compared to a mere 6 percent increase in rural employment, 23.3 percent decline in Agriculture and Allied Activities and 14 percent decline on major subsidies (figure-2). 14 percent of total budget goes towards defence expenditure compared to 8 percent in central assistance to State and UT Plans.
• Tax-GDP ratio declined from 12 percent in 2008-09 to 11 percent in 2009-10.
• State share in central taxes as % of GDP declined from 3 percent to 2.8 percent over last two years.
• Rs. 4,18,095 crore revenue foregone in the central tax system in 2008-09 which is more than 3 times the total subsidies given by the government.  Over last five years of UPA rule, the total tax revenue foregone is more than the whole budget for 2009-10. Tax revenue foregone is twice the total amount allocated towards central plans over last five years of UPA rule.
• The present tax regime is particularly discriminatory in favour of big business and is unduly harsh on the small scale sector as far as burden of tax is concerned. The effective tax rate (ETR) on small enterprises with an estimated profit before tax (PBT) in the range of Rs. 0-1 crore is more than 24 percent compared to less than 22 percent ETR for companies with a PBT  more than Rs. 500 crore. The effective tax rate of PSUs is around 26 percent compared to just 21 percent in case of the private enterprises
• As percentage of  total allocation for Agriculture and Allied Activities declined from 15.5 percent of total government expenditure in 2008-09 RE to 10.5 percent in 2009-10 BE.
• 91 percent allocations for Agriculture and Allied Activities go towards other purposes than direct promotion of agriculture in the country (Table-7 and Figure-4).
• Despite a promise of the government to increase the total number of employment days to be created under the programme by around 60 percent, the allocations for the programme have increased only by around 6.4 percent.
• Public expenditure on education has actually declined from around 3.23 percent of GDP in 2000-2001 to 2.88 percent during the UPA rule. As a proportion of total government expenditure, it has declined from around 11.1 percent in 2000-2001 to around 9.98 percent during first UPA rule (See Table-9).
• The share of Private schools in total schools providing elementary education during UPA rule is on increase.
• Share of elementary education in total allocations for education as a whole had increased from a mere 41 percent in 2000-01 to 71 percent in 2007-08. Then it declined drastically to 59 percent in 2008-09 RE and 48 percent in 2009-10 BE
• It is apprehended in many quarters that the recent shift in government focus towards higher education is basically for the purpose of creating a suitable atmosphere for making higher education more salable as the government has been planning to allow FDI in higher education in a massive scale. Irony is, in order to privatize higher education in India and to make the sector lucrative for foreign investors, the government is using education cess as an instrument for financing the basic ground works for such privatization
• If we calculate the amount the central government has actually allocated for elementary education in India after accounting for the amount it has collected through elementary education cess and external assistance, then in the budget 2009-10, the allocations in elementary education has declined by around 14 percent from Rs. 9991 crore in 2007-08 to Rs. 8590 crore in 2009-10.
• As per the two significant global surveys on out of school children, the total number of out of school children have declined significantly over the years, but the proportion of girls in the total out of school children have increased over the years in India (See Table-14).
• Among the selected countries, India is the single country where average school life expectancy of girls are less than the overall life of all students at school (Table-17)
• On an average an Indian spends around Rs. 5.80 per day out of pocket for availing health services in 2009-10 (Figure-6)..
• The gap between WPI all commodities and WPI –Drugs and Medicines widened further, indicating a proportionately higher prices for medicine prices compared to other prices during the UPA rule (Figure-8)
• In the present budget the government has allocated less money towards women specific purposes with only 19.47 percent of the total departmental budget (See Table-26).
• Analysis of the gender budget statements for last four years reveal that the share of allocations towards gender budgeting in these departments has declined in plan head from around 32 percent in 2008-09 RE to 31.3 percent in 2009-10 BE. However, in the non plan head, the allocation is abysmally low at only 2.5 percent of the total non plan allocation of these departments (See Table-27).
• Out of total 32 departments, the top-10 departments in terms of their GB share in total departmental allocation, account for around 98 percent of the total gender budget statement. However, even these top-10 departments provide less than 40 percent of their own allocations towards gender budgeting (Table-28).
• Out of total 32 departments that have presented a gender budget statement in 2009-10, 19 have registered a decline in their proportionate allocation in total allocation.
• The total allocation for SCs and STs as mentioned in Statement 21 of the Expenditure Budget Vol-1 of the Union Budget, declined from around 3.4 percent in 2007-08 RE to around 3.1 percent in 2009-10 BE. In case of non plan expenditure, it is just 0.3 percent in 2009-10.
• The amount denied to SCST as proportion of the ideal amount only under plan head is as high as 56 percent in 2009-10 BE which has increased over last couple of years (Figure-9).
• As proportion of total central transfers to states (excluding the amount of state share in taxes) the amount that bypass the state governance system account for around 36 percent in 2009-10 compared to around 17.5 percent in 2005-06 (Table-34).

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