Friday, May 29, 2015

In bits and pieces

On the social sector, budget doesn’t offer a coherent framework.

Employment will be provided under the MGNREGA through works that are asset-creating and linked to agriculture. This is a step in the right direction. Employment will be provided under the MGNREGA through works that are asset-creating and linked to agriculture. This is a step in the right direction.
Published on:July 12, 2014 3:11 am

It is known that India’s social sector progress has been much slower compared to GDP growth. India’s 2013 rank on the Human Development Index (HDI) is low at 136 out of 187 countries. Note that social sector progress has intrinsic (for its own sake) value and instrumental (for higher growth) value. In this context, focus on social sector spending and efficiency in delivery systems are important. At the outset, the measures in the budget that improve GDP growth, tax reforms, etc, affect social sector spending and progress. For example, lower economic growth would lead to lower tax revenues and lower spending on the social sector.

The NDA has just taken over, and we cannot expect big changes on policies in the social sector. As the finance minister mentioned, his aim is to lay down a broad policy direction. We focus here on budget proposals on education and skills, health and social sector schemes like the MGNREGA.

The overall framework for the sector is not clear, although bits and pieces of proposals have been given. On education, an amount of Rs 28,563 crore is being allocated for the Sarva Shiksha Abhiyan. The budget makes a provision for toilets and drinking water for all girls’ schools. The emphasis seems to be on the supply side, providing infrastructure, which alone will not improve the quality of education. There is a need for measures to improve learning. It is known that a fifth-grade student cannot read a second-grade text in many states. In higher education, it is good to have five more IITs and five more IIMs. But here also, there is a need to focus on the quality of education. India’s demographic advantage over other countries is well known. This advantage can be reaped only if the youth are educated, skilled and healthy. The only announcement on skills is a multi-skill programme called “Skill India”. This is supposed to skill the youth, with an emphasis on employability and entrepreneurship, but the details have not been given.

There are few proposals on health. The free drug service and free diagnosis service will, apparently, be prioritised, although the funding has not been mentioned. Four more AIIMS will be set up in four states. There is no mention of universal healthcare, including health insurance for all. Note that India’s public expenditure on health (1.4 per cent of the GDP) is one of the lowest in the world. It is good to see that the government intends to provide total sanitation to every household by 2019, the 150th year of Mahatma Gandhi’s birth, through the Swatchh Bharat Abhiyan.

Of the schemes relating to rural development, the budget touched on the Pradhan Mantri Gram …continued »

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