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Thursday, January 28, 2021

Explained Ideas: Why the Budget needs to ramp up spending on social sector

The cost of ignoring hunger and malnutrition will be high for the country, writes S Mahendra Dev.

By: Explained Desk | New Delhi | Updated: January 10, 2021 10:20:17 am
At a proposed Covid-10 centre in Thane, Maharashtra. (Express Photo: Deepak Joshi)

S Mahendra Dev, director and vice-chancellor, IGIDR, Mumbai, has argued in an opinion column in The Indian Express for the need to ramp up Budget allocations for education and health sectors.

“The Union Budget for 2021-22 can give medium-term direction to the social sector by increasing allocations, particularly in health and education and for social safety nets. No country has progressed without investing in the social sector,” he states.

India’s progress in the social sector has been much slower compared to its GDP growth. The two primary factors that adversely affect India’s human development are low levels of health attainments and education: India ranks 131 out of 189 countries on the Human Development Index.

A look at the social sector expenditure over the last few years (see table) shows that the share of education as a percentage of GDP has been stagnant around 2.8-3 per cent during 2014-15 to 2019-20. In the case of health, the expenditure as a percentage of GDP increased from 1.2 per cent to 1.5 per cent. This is lower than the required 2-3 per cent of GDP. There seems to be an increase in expenditure on “other” services like sports, art and culture, family welfare, water supply and sanitation, labour and labour welfare etc.

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The expenditures are inadequate in comparison to the problems in the sector. India’s social sector in general, and health and education in particular, encounter significant regional, social and gender disparities, slow growth in public expenditures and problems in delivery systems.

An increase in health expenditure is important to take care of the present and future pandemics. Further, it is essential to have a huge increase in public expenditure on health and provide accessible, affordable and quality health coverage to all.

Another important issue in the social sector is that of undernutrition. The NFHS- 5 report shows that malnutrition level has reduced marginally in a few states and has worsened in some other states. There is a need to raise allocations for ICDS and other nutrition programmes.

“The cost of ignoring hunger and malnutrition will be high for the country,” warns Dev.

Similarly, quality education is key for raising human development. The pandemic has enhanced inequalities in education and has revealed the widening digital gap. Equality of opportunity in terms of quality education is the key to raising human development and for reducing inequalities in the labour market. Several committees have recommended that public expenditure on education should be at 6 per cent of GDP.

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