Policy and Financing Framework for Livelihoods
19
been the Pradhan Mantri Suraksha Bima
Yojana that offers an insurance cover of
`
2.00 lakh on payment of a premium of
`
12. This is expected to improve access to
insurance for the lay person and is linked to
the PMJDY bank accounts.
On employment and for the youth, a
few new initiatives have been announced in
the Budget. One of these is the Nai Manzil
scheme for empowering the minority youth.
The Swachh Bharat Abhiyan has a target of
building 60million toilets across the country
which is a welcome measure from several
angles but may have a limited direct impact
on livelihoods. The national common mar-
ket for agricultural commoditiesis an idea
that is being studied with a view to roll it out
after sorting out the legal issues. This may
help farmers in getting better access to the
markets and ensuring better price discovery
and dissemination. The Self-employment
and Talent Utilization Scheme (SETU) has
also been announced as one of the impor-
tant means for promoting enterprises. Deen
Dayal Upadhyaya Grameen Kaushalya
Yojana (DDU-GKY) has been a part of the
NRLM in order to promote employment
amongst rural youth through suitable skill-
ing. These measures enhance wage employ-
ment and self-employment opportunities
for the youth. What is on the anvil are the
labour reforms for which the changes to
law made in Rajasthan are seen as a useful
model. The push to complete the Aadhar
registrations in order to set up a dedicated
payment mechanism has been hampered
somewhat by the Supreme Court’s ruling
that Aadhar should not bemade compulsory
for government benefits. The introduction
of General Sales Tax (GST) to replace the
differing commercial taxes regime in dif-
ferent states is likely to have a positive effect
on improving the business environment in
the country.
Several studies that looked into the
Budget and its directions have pointed out
a few areas of concern. One significant area
of concern is the shift in the focus of taxation
from the rich towards the poor. The share
of direct taxes is about 30 per cent of the
total taxes collected and 70 per cent is from
the indirect taxes. Indirect taxes burden the
poor disproportionately and are regressive
in nature. The second connected issue is
the lowering of direct taxes which reward
the rich. The third issue is the reduction in
tax revenue as a proportion of GDP. Direct
taxes which were 5.8 per cent of GDP in
2009–10 increased marginally to 6 per cent
in 2013–14. Indirect taxes during the same
period increased from 9.6 per cent to 11.9
per cent. In terms of comparative growth
rate, indirect taxes increased by more than
ten times that of the direct taxes and thus
had a much larger adverse impact on the
poor people. So the continuing high taxation
of the poor and low taxation of the rich is a
critical issue inhowwe protect the livelihoods
of the vulnerable. The secondmajor concern
pointed out in the comments on the Budget
relates to low attention paid to the farmers’
income and to improve the sustainability
of farm-based livelihoods. Theoretically,
creation of a national market may improve
the incomes but as a clear income enhancer,
its impact is likely to be felt over a long run
rather than during a short run.
The continuing rationalisation of sub-
sidies is a welcome development. One of
the drivers of the overhaul of development
schemes that impact livelihoods has been
the realisation that public expenditure
should be rationalised and made optimal.
The
Economic Survey
2015 states that, “the
upcoming budget should initiate the process
of expenditure control to reduce both the
fiscal and revenue deficits. At the same time,
the quality of expenditure needs to be shifted
from consumption, by reducing subsidies,
towards investment. “But withdrawal of
some of the subsidies should result in higher
and better quality support of other kinds
to the affected people so that on net terms,
they are not worse off. Subsidy schemes for
items such as fertilisers, power, irrigation and
credit are either heavily weighted in favour of
institutions that market these inputs or the
larger farmers who have amuch better access
