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 Sadak Yojana (PMGSY), MGNREGA, National Rural Livelihoods Mission, rural housing, watershed development, panchayati raj and safe drinking water. Rs 14,389 crore is provided for the PMGSY, which can improve rural roads.
On the MGNREGA, the budget does not mention the allocations. Probably the Rs 33,000 crore of earlier budgets has been kept for 2014-15 too. But the direction seems to be to link the scheme with agriculture. The budget speech says “wage employment” would be provided under the MGNREGA through works that are more productive, asset-creating and substantially linked to agriculture and allied activities. Linking the scheme to agricultural development is a step in the right direction. But some people think it should not be done on private lands, as one of the aims of the programme is to offer workers choice and freedom from landlords. The scheme should create agricultural assets to improve water availability, soil conservation, etc, which can improve agricultural productivity.
On malnutrition, the budget says that a national programme in mission mode is urgently required to halt the deteriorating malnutrition situation, as the present interventions are not adequate. It is an admission of the failure of the present strategy on malnutrition. The budget promises a comprehensive strategy will be put in place within six months. Let us hope the government will pay attention to the problem of malnutrition among children and women urgently.
Although the budget does not offer a clear strategy on the social sector, the Economic Survey clarifies the government’s thinking on social sector schemes. According to the survey, the challenge is efficiency in delivery systems. The outlays have not fully translated into outcomes due to poor delivery systems. The Economic Survey says, “the government has been implementing many social sector programmes. The performance of the different schemes is varied.” A major revamp/ reorganisation of the myriad schemes and the convergence of some is needed along with “a zero-budgeting approach for maximum efficiency gains”. It also says that leveraging modern technology for the efficient delivery of programmes, removing the multiple layers of governance, simplifying procedures and greater participation by beneficiaries, etc, can help in creating better delivery mechanisms.
India, aspiring to be a global power, should have harmonious and inclusive social sector development. Hopefully, the February 2015 budget will offer better clarity on social sector spending and strategies. Higher social sector funding is needed, as in the health sector, but the outcomes are more important.
The writer is director and vice chancellor, IGIDR, Mumbai