India is committed to achieving the Sustainable Development Goals (SDGs) by 2030, and social sector development is important in reaching them. Progress in this sector has intrinsic (for its own sake) and instrumental (for higher growth) value. It is needed even to build a $5 trillion economy faster. Inequalities in India have been increasing over time. COVID-19 has further widened them. In this context, focus on social sector spending and efficiency in delivery systems is essential. India has somewhat progressed on bijli, sadak and paani, but it is essential to invest in the social sector. 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.
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.
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 also important to take care of the present and future pandemics. Given the constraints, health workers did exceptional work during the pandemic. The experience of COVID-19 has also shown that during pandemics we tend to neglect non-pandemic related patients. Health insurance is an important component of health coverage. But, there is no alternative to universal health coverage including a focus on primary health centres to achieve the goals of the health sector. There are supply side problems regarding the health infrastructure. 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, although some other indicators have improved between 2015-16 and 2019-20. We can’t have a society with 35 per cent of our children suffering from malnutrition. Apart from undernutrition, obesity seems to be increasing in both rural and urban areas. Access and affordable diversified food intake is important for reducing both undernutrition and obesity. There is a need to raise allocations for ICDS and other nutrition programmes. The determinants of nutrition are agriculture, health, women’s empowerment, including maternal and child practices, social protection, nutrition education, sanitation and drinking water. The Poshan Abhiyan is a good programme, but has to cover all these determinants with a multi-pronged approach to reduce undernutrition. The cost of ignoring hunger and malnutrition will be high for the country.
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 for 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.
In the last few years, the government has done well in providing cooking gas (Ujjwala Yojana) and electricity (Saubhagya Yojana), introducing programmes such as Swachh Bharat Abhiyan and initiatives for housing, financial inclusion and providing loans to the self-employed. These programmes have helped the vulnerable sections, particularly women. Another initiative of the government was to facilitate direct benefit transfers (DBT) for welfare schemes. These initiatives have to be continued.
The COVID-19 period also offers some lessons on safety nets. It is known that migrant workers were the most affected during the pandemic and that they do not have any safety nets. There is a need to have safety nets like an employment guarantee scheme for the urban poor and facilities for migrants. Similarly in rural areas, allocations to MGNREGA have to be increased because of the reverse migration.
The government should give more focus to the social sector with better policies and implementation. It has to work closely with the states in revitalising the social sector as major expenditures particularly on health and education are met by them. The 15th Finance Commission also seems to have mentioned that health expenditure should be increased to 2.1 per cent of GDP. The Commission may also suggest some incentives for states to increase health expenditure. Both Centre and states should have a five-year vision on the social sector with bold measures.
We cannot have a society with slow progress in health and education. India, aspiring to be a global power, should have a harmonious and inclusive social sector development. This is also important for achieving the SDGs, reducing inequalities and building a $5 trillion economy faster. Hopefully, more attention will be given to the social sector in the forthcoming budget. Higher social sector funding with better implementation and outcomes are needed.
This article first appeared in the print edition on January 9, 2020 under the title ‘The post-Covid priority’. The writer is director and vice-chancellor, IGIDR, Mumbai.