Union Budget 2023-24: A detailed analysis with a water lens
A detailed analysis of Union Budget 2023-24 from the water lens
3 Feb 2023
(Image: Utthan/India Water Portal Flickr)

Having its domain in agriculture and allied activities, rural development, drinking water and sanitation, energy and transportation sector, water resources are quite crucial for an economy of a state. A union budget other than making financial provisions, also tells us about the vision of a government.

Union Finance Minister Ms. Nirmala Sitharaman presented the union budget for 2023-2024 in the parliament on 1st February 2023. Considering this is the Modi government’s last full budget before the country goes to polls in 2024, the financial provisions were highly anticipated in the social welfare as well as political corridors. The issue of water and sanitation is a top priority of the current regime in governance as well as the electoral agenda. To our surprise, the finance minister hasn’t mentioned much about the same in her budget speech but the Statements of Budget Estimates speaks more than that. 

The financial provisions1

In the union budget of 2023-2024, approximately 1,12,478 crore INR are proposed for the water domain that spread across the Ministry of Jal Shakti, Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Development, Ministry of Housing and Urban Affairs2. This allocation is almost 15% higher than the last financial year’s proposed budget. Most of its credit goes to the 70,000 crore allocation to Jal Jeevan Mission (JJM) for providing functional household tap connections (FHTC) in rural India. The target for the financial year 2023-24 is to achieve an additional 4 crore FHTCs.

An interesting fact to note, for the 2022-2023 financial year against the proposed 97,789 crore INR, the revised budget allocation had decreased to 83,629 crore INR, which is almost a 14% decrease in the allocation. 

Ministry of Jal Shakti

Combined of the Department of Drinking Water and Sanitation and the Department of Water Resources, River Development and Ganga Rejuvenation, the Ministry of Jal Shakti had been allotted a proposed budget of 86,189 cr INR, which is 12% more than the last financial year’s budget. Almost all of the increased budget is given to the JJM program.

In the Department of Water Resources, River Development and Ganga Rejuvenation, the budget of Pradhan Mantri Krishi Sinchai Yojana (PMKSY) have been decreased by almost 20% as compared to last year’s 10,954 Cr. Within PMKSY, both the budget head related to the command area development i.e. ‘Har Khet Ko Pani’ as well as ‘Command Area Development And Water Management’ has seen a decrease in the allocation. Maintaining the trend, this year also approximately 50% of the allocation under PMKSY is going for servicing of loans from NABARD under PMKSY that includes Payment of interest for NABARD.

The component of Namami Gange and Atal Bhujal Yojana has seen a considerable increase in the allocation. The allocation for the Namami Gange has been increased to 4,000 cr as compared to 2,800 cr of last year. The Atal Bhujal Yojana had also seen an increase of almost  40% as compared to last year’s 700 cr.

For the Department of Drinking Water and Sanitation, the total allocation is 77,223 cr INR as compared to last year’s 67,221 cr INR. The Jal Jeevan Mission is aiming to provide the Functional Household Tap Connection (FHTC) by the year 2024. Considering its deadline inching closer and a remaining massive target of additional 8 cr FHTCs, the annual allocation of JJM had been increased. Against the last year’s allocation of 60,000 cr, this year the budget has been increased to 70,000 cr.

The budgetary allocation for the Swachh Bharat Mission – Gramin (SBM-G) has been kept at 7,192 cr, same as last year.

Ministry of Rural Development

A total allocation of 2,200 cr has been made in the Department of Land Resources for the Watershed Development Component-Pradhan Mantri Krishi Sinchai Yojana (WDC PMKSY 2.0). The PMKSY’s Integrated Watershed Development Program was holding a major portion of the watershed until its closure on 31 March 2022. 

A lot of watershed and water conservation work is performed under the MGNREGA funds. In the department of Rural Development, this year MGNREGA fund has decreased by almost 20% as compared to last year’s 73,000 crores.

Ministry of Agriculture and Farmers' Welfare

Since the last financial year budget, the Per Drop More Crop (Micro Irrigation) component has been clubbed with the Rashtriya Krishi Vikas Yojana (RKVY). No separate budget allocation has been indicated in the document. But the total allocation of RKVY has decreased by almost 25% as compared to last year’s allocation of 10,433 cr INR.

Ministry of Housing and Urban Affairs

The allocation for the Swachh Bharat Mission Urban has been increased to 5,000 cr as compared to last year’s allocation of 2,300 cr INR. Also, a sum of 8,000 cr INR is allocated to the Atal Mission for Rejuvenation and Urban Transformation (AMRUT). As per the Output Outcome Framework of this budget, activities relating to the functional water tap connections to urban households, sewage treatment and rejuvenation of water bodies are the key activities among others. 

Other allocations

Under the Ministry of Environment, Forests and Climate Change (MoEFCC), financial provision is made in the head of National Coastal Management Programme (12.5 cr), Environment Education, Awareness, Research and Skill Development (87 cr), Control of Pollution (756 cr), National Mission for a Green India (220 cr) and Conservation of Natural Resources and Ecosystems (47 cr). The total outlay of MoEFCC has been kept at 3079 cr INR, which is almost the same as last year’s.

A deep dive

The progress and success of a program or scheme are not only dependent on the financial provision but also related to the planning of expenditure, stage of expenditure and approach of expenditure. Once these numbers of this union budget are put with other contemporary developments, there are few things that make sense.

One, the government had kept drinking water and sanitation as a priority but progress is mainly limited to physical infrastructure. Second, for some of the critical schemes, there is a significant gap between the estimated budget allocation and the actual expenditure or revised allocations. Third, there are very high hopes from the integrated water management spectrum but at the moment, it is appearing to be hazy. Let’s dive deep into each of these points one by one.

Jal Jeevan Mission is one of the initial as well as the high-priority schemes of Modi led NDA’s second term in government. Since its inception, the scheme has been backed with pathbreaking financial provisions as well as policy and institutional support. Results also sound equally encouraging. Close to 8 cr households are provided with the tap connection since the scheme started. But the mandate wasn’t just limited to the tap connection, it aimed for Functional Household Tap Connection.

This means potable water supply in adequate quantity of prescribed quality on a regular and long-term basis. But the government's own “Assessment of the Functionality of Household Tap Connections (FHTC) report – 2022” doesn’t vouch for the same. As per the report, the overall functionality of provided tap connection is just 62% reflecting quality, quantity and regularity of supply. Also, only in 32% of cases, the existence of village-level community-led institutions was acknowledge. The component of source sustainability was not even discussed. In short, this leaves ample ground for the JJM to cover before it touches the finish line in 2024.

Year after year, it has been observed that the initially estimated allocation in the budget reduces significantly either in the revised budget or actual expenditure. The shortfall mostly impacts the decentralised, community-led, small-scale intervention schemes. For example, command area development is considered one of the best mechanisms to increase the productivity of irrigation schemes as well as to operate and maintain their viability.

The budget provision for command area development was made through two budget heads i.e. ‘Har Khet Ko Pani’ and ‘Command Area Development And Water Management’ under the Department of Water Resources. A combined total of 1829 cr was estimated in last year’s budget, the same has been revised and reduced to 690 cr now.

In the same manner, the component of watershed development under the Department of Land Resources has been reduced to 1100 cr from the initially estimated 2000 cr. The same trend is true for the last 5 financial years too. Swacch Bharat Mission is also a victim of this phenomenon. 

Agriculture is the biggest water consumer in India and until this is not fixed, other all efforts will be erased sooner or later. The good part, there are some rays of hope emerging lately; the bad part, they are still not well received. Almost three-fourth of India’s water gets consumed in growing water-guzzling crops like paddy and wheat. Farmers prefer these crops because of assured procurement and minimum support price. Policies push for these crops to attain national food security.

But this vicious cycle is not viable either for the economy or for the ecology. Over the years a significant but relatively marginal voice is emerging to break this vicious cycle. One of the ways suggested is to promote lesser water-intensive crops such as millets through the assured procurement and minimum support price regime. The good thing is that recently the people and policymakers started flowing with the new wind but the penny is still stuck in its old vaults.

The world is celebrating 2023 as the International Year of Millets. The key policymakers including Prime Minister have been repetitively talking about the adaptation of millets as well as other indigenous and agro-ecological sensitive cropping patterns. But their budget doesn’t match their voice. According to the budget documents, the provision for the subsidy to chemical fertilizers is floating at almost an all-time high i.e 1,75,148 cr INR. On the other hand, the allocation for the alternative mechanism is still dismal. The allocation for the Rashtriya Krishi Vikas Yojana (RKVY) has been reduced by almost 25% as compared to last year’s allocations of 10,433 cr INR. Also, National Mission on Natural Farming is allocated just 459 cr INR. 

India needs an integrated water management approach. The focus should be centered on agriculture and widen towards water resources sustainability. Until this is not prioritised at scale, all other measures make limited sense. 

The Union Finance minister called this the first budget of Amrit Kaal, though she fully relied on its existing infrastructure-centred management approach in terms of the water domain. But if we would have made a paradigm shift in governing our water resources, that would have been a good omen while we embarked on this journey to Amrit Kaal.

Endnotes

1. All the mentioned allocations are as per the Union Budget 2023-24.

2. The stated total is the sum of all allocations of the Ministry of Jal Shakti; Pradhan Mantri Krishi Sinchai Yojana (PMKSY)- Per Drop More Crop component of the Department of Agriculture, Cooperation and Farmers’ Welfare; Integrated Watershed Development Program component of the Department of Land Resources; Swachh Bharat Mission (SBM) – Urban and AMRUT component of Ministry of Housing and Urban Affairs.

 

This has been reposted from the author's blog https://paaniwalibaat.wordpress.com/

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