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In Union Budget 2023, Finance Minister Smt Nirmala Sitaraman has emphasised on “Nari Shakti” as the harbinger of India’s bright future. As this is the last year before India goes for elections, the government has been focusing on incentivizing the “calculus of consent” through women-led development narratives. 
It is equally crucial to pitch these major announcements within the framework of long term Public Financial Management (PFM) tool like gender budgeting to protect the fiscal vigour of these announcements - by not pre-empting it as just “election freebies”. The political economy of gender budgeting is thus compelling. 
Gender Budgeting is a fiscal innovation that translates the gender commitments into budgetary commitments. It will be a game changer if women in India own gender budgeting as a policy tool for their “say” in the budget. The move by NITI Aayog to make gender budgeting legally mandatory in India through Gender Budgeting Act is a welcome move in this direction. 
The Gender Budget Statement is an important fiscal policy tool to provide a roadmap on “Nari Shakti” - to analyse how India spends on women. This “gender lens” in fiscal data is indeed a path breaking one, however it is tough to attain this data unless there is a clear inter-ministerial co-ordination. This Statement has been published in two parts by Ministry of Finance, Government of India since 2005, which presents the specifically targeted programmes for women in Part A of the Statement and collates the identified gender intensities of the mainstream public expenditure in Part B. 
The analytical matrices and institutional mechanisms of gender budgeting have been designed by NIPFP (an independent research institute of Ministry of Finance), and over the years as there is no change in the NIPFP methodology of gender budgeting, which India follows, we have comparable time series data and it is high time to analyse the impact of gender budgeting on outcomes in terms of women’s empowerment. The Gender Budget Statement is mandated through Budget Call Circulars. 
Gender budgeting is a PFM tool to ensure budget transparency and accountability. However, if there is deviation between what is promised by Finance Minister in the Budget and what is actual spending, the budget credibility will be questioned. Usually Fiscal Councils are the institutions which look into the fiscal forecasting errors across countries. However, India has not yet constituted Fiscal Council in India. 
Against the backdrop of G20 meeting, Nari Shakti is projected as India’s model for women-led development, which other countries can emulate. Gender Budgeting is a promising framework for ensuring women-led development. It is laudable that the narrative has shifted from women’s development to women-led development. Gender budgeting is a fiscal innovation that encompasses four significant phases - model building, setting up institutions to conduct gender budgeting, strengthening of capacity building at national and subnational levels of governance and ensuring accountability mechanisms. These four phases encapsulate the timeline of gender budgeting in India. The model building of gender budgeting specific to India has been carried out by the pioneering research by NIPFP in 2000. The institutional mechanisms and analytical matrices to conduct gender budgeting has been recommended by the Classification of Budgetary Classification Committee of Ministry of Finance in 2003. The major recommendations of this Committee were to formulate analytical matrices by NIPFP, and to set up Gender Budget Cells in all sectoral ministries and also to constitute and Inter-Departmental Committee (IDC) on Gender Budgeting to discuss the issues that cut across sectors, with IDC at least meet twice a year to discuss gender budgeting. In 2004, Finance Minister has accepted all these recommendations and announced in Budget Speech that India will conduct gender budgeting from 2005 onwards. Since then, Gender Budget Statements have been produced by Finance Ministry in Expenditure Budgets. The capacity building has been conducted by Department of Women and Child Development in co-ordination with UN Women at national and subnational levels of government. The involvement of these multiple stakeholders in the process of gender budgeting in India is what makes the process authentic and sustainable. 
The decision for conducting gender budgeting in India also coincided with an institutional fiscal reform in the country towards “fiscal rules” of keeping fiscal deficit-GDP at 3 per cent, and also to phase out the revenue deficit. Within the realm of Fiscal Responsibility and Budget Management Act (FRBM), if we analyse the trends in gender budget, one can see that the budgetary allocation of gender budgeting has remained approximately at 4-5 per cent of the total budget of India. The reasons for this stagnating proportion of gender budget need to be analyzed from the angle of fiscal consolidation. If the roadmap towards medium term fiscal consolidation is through expenditure compression rather than revenue buoyancy path, it will affect human capital formation and economic growth recovery processes. Even in times of revenue uncertainty and expenditure compression, gender budgeting has remained constant. 
It is incorrect to say that gender budgeting is only an “ex-post” accounting exercise in India. Over the years, we have conducted “ex-ante gender budgeting” by identifying gender issues within the overall fiscal framework. 
Gender discrimination starts even before birth. This is reflected in the monotonic decline in the sex ratio (0-6 cohort). The government has conducted ex-ante gender budgeting by identifying this issue and formulated a programme titled “Beti Bachao, Beti Padao” (Save the girl child and educate her) and budgeted it. Later, government has integrated gender budgeting in energy infrastructure at ex-ante levels in a prima facie gender neutral Department of Petroleum by identifying the severity of mortality of women and children from indoor air pollution from using inferior fuels (the programme is named as “Ujjwala”). This programme was to provide clean fuel for women in low income households. The “Nirbhaya” is yet another programme identified to ensure safety and security of women in public spaces. However, the fiscal marksmanship of these programmes need a careful analysis, for understanding the reasons for deviations between Budget Estimates (BE) and actual spending. 
When the monetary policy stance is focusing on inflation containment by keeping interest rates high, the narrative of Union Budget 2023 is to keep fiscal policy “accommodative” to support economic growth recovery through public infrastructure investment, to “crowd in” private corporate investment.  One of the major assumptions of gender budgeting is that public infrastructure investment is not gender neutral. Applying a “gender lens” to infrastructure capex is crucial. In Union Budget 2023, there is a significant increase in the allocation towards “Safe City Project” – to provide safety to women in public spaces - from Rs 165.11 crores (2022-23 Revised Estimates) to Rs 1300.10 crores (2023-24 Budget Estimates). This is indeed welcome.
Gender budgeting framework allows the flexibility to innovate ex-ante identification of gender issues in India to budget it. In times of pandemic, economic stimulus packages were announced with credit infusion as the major strategy. This helped women entrepreneurs to access soft credit, however lack of demand has created uncertainties. A targeted cash transfer was also designed for women in care economy to tackle livelihood crisis. However as economic stimulus packages were short run in nature, gender budgeting as a long term PFM tool found a renewed significance in post-pandemic fiscal strategy in India to tackle gender inequalities. 
Similar to green bonds, announcing “gender bonds” can strengthen fiscal space for gender budgeting. In the post-pandemic fiscal strategy, there is a growing recognition that economic growth per se will not translate itself into better human development. In the final Union Budget prior to 2024 elections, Finance Minister has announced that the top-most priority of the government is inclusive development and incorporated “Nari Shakti” as one of the seven guiding principles (“Saptarishis”). 
Against the backdrop of G20, digital infrastructure in public finance has been announced as one of the success stories of India. Strengthening digital infrastructure has led to financial inclusion, and also led to elimination of “ghost beneficiaries” of government’s flagship programmes. Access of poor to formal banking sector through opening accounts is a remarkable policy decision. Otherwise poor women were perceived as “unbankable”, though empirical evidence show they are not “defaulters”. However digital divide in India is challenging to make the digital access successful for poor in India. 
In the Union Budget 2023, Finance Minister announced the success of financial inclusion of women through Self Help Groups (SHGs) as part of National Rural Livelihood Mission. This is a significant move, when RBI has been increasing the interest rates (credit getting costlier) to tackle inflation and capital outflows. The point to be noted here is that though women are not defaulters, it is important to understand the intra-household power struggles to analyse how she is paying back credit. The data on repayment is generally available, however gender disaggregated data on financial inclusion including the “source” of repayment data needs to be strengthened. The source of payment can provide us inferences if women are engaging in Ponzi finance at exorbitantly high interest rates with informal credit markets to repay the formal credit and household debt is going catastrophic in times of market uncertainties. 
Equally important is the financialisation of savings. Against the backdrop of Azadi Ka Amrit Mahotsav, Finance Minister also announced a new small savings scheme –Mahila Samman Savings Certificate - for a period upto March 2025, offering a deposit facility of two lakhs made either in the name of a woman or a girl for a tenure of two years at a fixed rate of interest at 7.5 per cent with partial withdrawal option. This announcement is laudable, especially when India is in negative interest rate regime with mounting inflation.  The negative interest rate is detrimental, as we do not get the value of what we saved either in times of mounting inflation. 
Property entitlements in terms of land and other resources are crucial for women’s empowerment. An increase in the allocation is for Pradhan Mantri Awaas Yojana – the rural housing scheme – with Rs 54,487 crore -  is welcome as this aims at strengthening property entitlements of women. The differential tax rates for property registration also helps in strengthening the access of women to land and property. 
Gender budgeting on taxation side is equally crucial, though in many countries gender budgeting is confined to only expenditure-side. Incorporating a gender criterion in intergovernmental tax transfers is crucial to provide fiscal space at subnational government level to prioritise gender equality outcomes. If it is mandated in TOR, the issue will get recognition to be integrated in tax devolution formula. I hope 16th Finance Commission will have a mandate on gender, just like the way climate change criterion was integrated in Finance Commission’s TOR. 
This article was abridged and published in Moneycontrol on International Women's Day March 8th 2023.
Lekha Chakraborty is Professor, NIPFP and Research Associate of Levy Economics Institute of Bard College, New York and Member, Governing Board of International Institute of Public Finance (IIPF) Munich.
The views expressed in the post are those of the authors only. No responsibility for them should be attributed to NIPFP.
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