Average woman's share of Budget Rs 1,200

per year
NEW DELHI: They account for half the country’s population but end up getting a paltry share in the
Union Budget. Platitudes aside, the government has been unable to initiate and sustain women-
friendly schemes. Its per capita allocation for women’s schemes is 6.1% of the total Budget or a
paltry Rs 1,200 per woman per annum. This is not even enough to feed a woman for a month, let
alone help her survive for 12 months.

According to the gender budgeting statement analysis by Centre for Budget and Governance
Accountability (CBGA), per capita allocation increased from Rs 410 in 2007-2008 to Rs 1,000 in 2009-
2010 and to Rs 1,200 in last year’s Budget. While the amount does not include incidental benefits
from schemes that are not directly seen as gender oriented like rural employment scheme and total
sanitation campaign, the fact remains that allocations for women continue to be poor.

For instance, the Prevention of Women from Domestic Violence Act was enforced in 2006. States
like Bihar, Rajasthan and Uttar Pradesh, that have reported high number of domestic violence cases,
have not even made ad-hoc allocations for its proper implementation.

The only exceptions to prowomen schemes have been the National Mission for Empowerment of
Women , with an allocation of Rs 40 crore, and the Rajiv Gandhi Scheme for empowerment of
adolescent girls with Rs 15 crore.

Activists feel that the debate should move on from not just more funds but also gender responsive
schemes. CBGA executive director Subrat Das said the government was gender blind. “To assume
that the cost of bringing and retaining a girl child in school is the same as for a boy child is being
gender blind,” he said.

Trade balance of concern if oil gets costlier:

Pranab
KANDI (WEST BENGAL): Union Finance Minister Pranab Mukherjee Sunday said if oil
prices shoot up further, then both the current account deficit and the trade balance would be a
matter of concern.

"At this point of time, the trade balance and the current account deficit are manageable. But
going forward, we don't know how the current account deficit and the trade balance will pan
out," Mukherjee told reporters on the sidelines of a programme here in West Bengal's
Murshidabad district.

"If oil prices increase further, then both the current account deficit and the trade balance will
be a matter of concern," he said after inaugurating on-line the 5,000th rural branch of State
Bank of India (SBI) at Sagardighi Railway Station, about 30 km from here.
He also inaugurated the 13,333rd branch of SBI and 22,222nd ATM of the State Bank group
here.

The minister said though exports have gone up, imports have risen significantly.

Mukherjee said imports of capital goods and raw materials were increasing. "That will
increase the production and manufacturing sector," he said.

"I don't know to what extent we can control petro-product use. (Due hike in oil prices) the
import bill will increase and the trade deficit will be widened," he said.

Egypt crisis to impact policy : RBI

GOA: Events in Egypt will have an impact on Indian monetary policy, the country's central bank
deputy governor told reporters on Sunday.

"After making the policy announcement on 25th Jan, a whole set of events unfolded in the Middle
East, which are starting to have an impact on oil prices, obviously, which we did not anticipate at the
time we made the announcement," Subir Gokarn, deputy governor at the central bank, said.

The crisis in Egypt has raised concerns of a disruption to supply of Middle East oil shipped through
Egypt and of unrest spreading across the Middle East and North Africa, which combined produce
more than a third of the world's oil.

"So, a completely new environment has emerged in a very short time after the announcement. It is
going to have an impact on our thinking, our action going forward," Gokarn added.

India's central bank raised interest rates on Jan. 25 by a quarter of a percentage point to clamp down
on resurgent inflation and warned of persistently higher food prices unless steps are taken to boost
supplies.

Budget 2011 outlook: Govt likely to address

only the near-term problems
Current macroeconomic challenges are manifold. Inflation, including that for essential commodities,
is high. Interest rates are on the way up. Domestic financial sector liquidity remained under stress,
often excessive, for bulk of the current fiscal. Likely large government borrowing on top of that can
potentially be a dampener for private investments, which, in turn, will raise doubts about growth
sustainability.

With elevated current account deficit and uncertainties around future FII flows, the overall balance
of payments ( BoP )) looks weaker in the recent months. The government is being criticized heavily
on corruption issues. The upcoming elections in some of the major states, pundits fear, may prompt
the government to turn extra-populist in the coming budget.

Attaining the sub-5% fiscal deficit target in 2011-12, as prescribed by the Fiscal Responsibility and
Budget Management ( FRBM )) Act, looks next to impossible. The expenditure pattern of the
government is fairly sticky with nearly 60% of the total spending being incurred on interest
payments, subsidies, defence, wages and social sector schemes. In fact, subsidies can spring an
upside surprise with elevated oil, fertiliser and food prices.

Interest outgo can go up faster with rising interest rates and a larger pile of debt. Wage bill can grow
faster reflecting high inflation. Restraining the social sector expenditure is clearly against the priority
of the government. Containing the plan expenditure is difficult as 2011-12 is the terminal year of the
11th five year plan as well.

Tax revenue growth in 2011-12 can be in high teens. In fact, high inflation can be an indirect positive
for the overall tax collection. But, that will, in no way, be enough to match the rising expenditure bill.
We are penciling in a large net borrowing figure of Rs 4,20,000 crore or more for the Centre in 2011-
12. The softer headline fiscal deficit print in 2010-11 was largely a direct fallout of the huge "on-off"
telecom licence auction revenue. The only hope for a somewhat benign fiscal deficit number in
2011-12 is a similar one-off windfall.

But, at the moment, there is no clear avenue in sight that can generate such game-changing
revenues in the coming fiscal. There have recently been speculations on whether the government
can account for a part of the large sum stuck in tax and/or licensing controversies as potential source
of revenue in 2011-12. But, it will in no way be a conservative accounting practice which a
government must follow.

No major change in the prevailing tax regime is expected at this juncture. Rollback of the few
remaining tax sops provided in 2008-09 could possibly have generated higher tax revenue and
helped containing fiscal deficit to an extent. But, fears of a slower GDP growth in 2011-12 reduce
policy flexibility to hike taxes.

Moreover, any major tinkering in the indirect tax rates is unlikely as the government is targeting
rollout of the integrated goods and service tax (GST) in a year. Service tax rate hike, along with
broadening the net, cannot be ruled out as the likely GST rate would be higher than the prevailing
rate. Also, the contribution of service tax is still perceived to be small compared with the large value
addition in that sector.

Similarly, changes in direct tax regime may be limited to aligning it with the upcoming direct tax code
(DTC). Some of the current income tax exemptions may be removed while offering a somewhat
higher standard deduction and/or a new 5% slab in case of income tax.

On the whole, the near-term problems are daunting and several with virtually very few policy-levers
with the government. One of the problems is funding revenue expenditure through capital receipts
and, thus, bringing in greater inter-generational inequalities. In the process, we run the risk of
prioritising the immediate problems at the cost of our longer-term policy objectives (reforms and
infrastructure creation).

Enhancing infrastructure and supply responsiveness to the growing demand are some of the core
issues that need to be addressed to ensure India's long-term growth sustainability. Unfortunately,
we are, once again, likely to get stuck in addressing only the near-term problems in the coming
budget too!

(The author is Chief Economist, Barclays Capital - India. )