Priorities of public expenditure

The Assam government's biggest flagship scheme 'Orunudoi' of providing financial assistance to 17 lakh families will provide tem-porary relief to the targetted families but the rising unemployment crisis and the sky-rocketing prices of essential commodities in the State call for measures beyond doling out cash. The State government will provide cash amount of Rs 830 to each eligible family to buy essential food items and medicines under the scheme to be rolled out on October 2.Even though the scheme is showcased to benefit women, the money being meant for the entire family, it does not make women the exclusive beneficiaries. The State Innovation & Transformation Aayog (SITA) in its report over the impact of COVID-19 on the economy recommended transfer of cash benefit of Rs 3,000 per household/family for at least three months as special relief in addition to all the existing benefits. The (SITA) report prepared in collaboration with the OKD Institute of Social Change and Development states that there are 25 lakhs Below Poverty Line families and the cash relief for three months will require Rs 2250 crore. Going by the SITA estimates, about eight lakh BPL families will remain excluded from the Orunodoi scheme even though pandemic situation has created the same financial stress for them. Fixing the number of beneficiaries in each constituency on the criteria of the number of active voters is going to result in this exclusion. The State government decided that the Assembly constituencies with less than two lakh active voters will have 1,50,00 beneficiaries and in constituencies with over two lakh active voters will have 17,000 beneficiaries.The financial stress of the poor and downtrodden families due to the COVID-19 pandemic situation justifies doling out cash to help them mitigate their financial woes.

However, if the prices of essential commodities are not checked by the government then the families cannot be expected to get the desired benefits. Prices of vegetables have gone up. Potato is selling at Rs 40-50 a kilogram. Price of onion has also gone up to Rs 40 a kilogram. Prices of several vegetables are in the range of Rs. 60-80 a kilogram. The food inflation is going to consume the large share of the money doled out under the scheme and the targeted families cannot be expected to derive much benefit in the prevailing situation. The SITA report mentions the period of three months for cash and other relief measures with the assumption that the economy will recover after all the suggested measures including the relief measures are implemented for timely intervention.The amount fixed under the Orunodoi scheme is too little to help the families come out of the financial crisis even though there will be an outgo of Rs 210 crore from the State exchequer every month. The solution lies in alleviating the economic condition of the BPL families and not in keeping them forever dependent on cash benefits doled out by the State government. Focusing on improving the overall economy of the State is more prudent to overcome the pandemic challenge. A key recommendation made in the SITA report is "an urgent mapping of resources in the sense that money lying with any department unutilised should be sourced back to the Finance department so that the amount can be utilized in the priority sectors having the highest multiplier effect on the economy." It also suggested to the State Government to urgently introduce the public procurement system and/or comprehensively restructure the existing ones – in Agriculture, Handloom, Fishery, and Livestock sectors and putting in place "a decentralized (ideally at the block level), well-designed supply, procurement and distribution system involving multiple stakeholders in the entire value chain." Long queues in front of the Employment Exchanges across the State have pressed the alarm bell of an unemployment crisis of a severe magnitude than what is perceived from the loss of jobs and livelihoods due to contraction in the economy during the pandemic. It is estimated in the SITA report that the unemployment rate in the State will increase up to the range of 16 to 27 per cent from the present level of 8 per cent and consequently poverty rate may go up to about 50 per cent. The report sounded a caution that COVID-19 will put considerable stress on the State finance as there will be an estimated loss of revenue in the fiscal 2020-21 within the range of 12423 to Rs. 18236 crores. The loss of revenue will put before the State Government a tougher challenge of deciding its priorities of expenditures. The primary focus of government expenditures aimed at recovery in the pandemic-ravaged economy will be worthwhile in the sense that it will have a rippling effect of brining benefits for all sections of the people. The State Government has before it the SITA report with an elaborate analysis of the economic crisis and a set of concrete policy recommendations to act upon.