The Union budget kept interests of the social sector close at heart
4 min read . Updated: 21 Feb 2023, 01:31 AM IST
PremiumFiscal spending has risen while an outcome-based approach is improving its quality to uplift the lives of multitudes better
After the budget, there have been claims, both calm and agitated, of a “slashing" of social sector spending, referred to as an “anti-poor" policy of the Indian government. Nothing could be farther from the truth, as no government can afford to ignore the basic needs of most of the populace in the world’s largest democracy. An altogether different picture emerges when one examines the data for recent years. We present some facts about the progress made on the provision of various social services for citizens of the country and then dwell upon proposals in the Union Budget for 2023-24 in the context of the social sector.
In terms of monetary allocation, central government expenditure on social services has seen a consistent upward trend, rising from ₹660 billion in fiscal year 2013-14 to ₹2.24 trillion in 2023-24 (budget estimate, or BE), representing a compounded annual growth rate of 14.6%. The total allocation for eight key social sector schemes —PM-Jan Arogya Yojana, Jal Jeevan Mission, National Education Mission, National Health Mission, PM Awas Yojana, Swachh Bharat Mission (rural and urban), Atal Mission for Rejuvenation and Urban Transformation (Amrut) and Smart Cities Mission—has increased by 21% from 2022-23 to 2023-24.Digging deeper, the combined budget of Jal Jeevan Mission and PM Awas Yojana has risen by more than ₹40,000 crore, more than compensating for the ₹13,000 crore cut in the Mahatma
Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Moreover, going forward, multiple programmes of the government with substantial employment generation capacity would lessen the burden on MGNREGS, some examples being Amrut and Smart Cities Mission ( ₹16,000 crore for 2023-24, 13.5% growth over 2022-23 BE); Swachh Bharat Mission ( ₹12,192 crore for 2023-24, 28% growth), production-linked incentive schemes for various sectors, etc. Finally, MGNREGS being a demand-driven scheme, expenditure can be increased if required.
The overall health expenditure has increased to ₹89,956 crore in 2023-24, marking a rise of 2.7% from the BE and 15% from the revised estimate of 2022-23. For universal access to cost-effective Ayush services, the budget allocation to the National Ayush Mission increased by 50% from ₹800 crore in 2022-23 to ₹1,200 crore in 2023-24. On the education and skilling front, the increased allocation of ₹1.16 trillion vis-à-vis ₹1.07 trillion last budget stays true to the blueprint for a skilled and future-ready ‘India@100’.
Apart from monetary support, the health and education sectors have seen a swathe of path-breaking initiatives such as Ayushman Bharat and the National Education Policy in recent years. The efficient implementation of these announced big-ticket programmes will maximize the impact of every rupee spent.
In a further step towards reaching the unreached, the budget for 2023-24 has covered hitherto neglected areas, such as Particularly Vulnerable Tribal Groups, the education of tribal students through Eklavya schools, elimination of sickle cell anaemia and the channelling of artisan talent through PM-VIKAS. Further, in cognizance of the large multiplier impact of capital expenditure on growth and employment, its outlay has been increased by 33% to ₹10 trillion.
Along with a big tent of social infrastructure put up at the Union government level, the spending capacity of states has been strengthened in recent years, implying greater elbow room for welfare spending customized to state requirements. As discussed in this year’s Economic Survey, total fiscal resources accruing to the states from the Goods and Services Tax (including devolution from the Centre’s GST) exhibited a buoyancy greater than that in the pre-GST period, despite a reduction of the effective weighted average GST rate. Notably, the combined expenditure of the Centre and state governments on social services has increased from ₹7.7 trillion in 2014-15 (i.e., 6.2% of GDP) to ₹21.3 trillion in 2022-23 (i.e., 8.3% of GDP by BE).
Reinforcing the quantity of expenditure with quality, sustained efforts have been made at efficiently uplifting the vast majority of people from necessity-deprivation towards dignified lives. In contrast with an outlay-obsessed approach, an outcome-based approach is the sine qua non for any meaningful progress on common standards of living. It goes alongside efforts to make the best use of limited resources through technology and process re-engineering in a manner harmonious with the canons of public expenditure.
Resultantly, substantial headway has been made in India’s social infrastructure. As discussed in this year’s Economic Survey, India is entering its Amrit Kaal (or favourable period of 25 years till 100 years of independence are marked in 2047) with better-equipped schools, affordable healthcare, increased formal employment, empowered women’s collectives and far-reaching access to basic amenities such as sanitation, drinking water and electricity.
The ‘whole of health’ approach that has been adopted has yielded tangible results, as seen in data from the National Family Health Survey for 2019-21, including on institutional births, maternal and child health, immunization and health insurance coverage. At the same time, out-of-pocket expenditure as a percentage of total health expenditure in India has declined substantially from 64.2% in 2013-14 to 48.2% in 2018-19. These numbers on health are slated to improve further with Ayushman Bharat-JAY launched in 2018 by the government, a programme that has already covered more than 220 million beneficiaries.
Thus, budgeting for Amrit Kaal, as done recently by India’s finance ministry for 2023-24, must be viewed from the vantage point of ongoing social sector reforms across the country and an outcome-based, consequentialist approach.
V. Anantha Nageswaran & Deeksha Supyaal Bisht
These are the authors’ personal views.