India continues to rank poorly in various global indices that reflect the quality of life, human capital or human development in the country, such as the Human Development Index (rank 131 out of 189 countries) and the Global Hunger Index (rank 101 out of 116 countries). It is well documented that the pandemic over the last two years has had a severe impact on the health, education and food security of the poor and informal sector workers. A number of recent reports, including the Oxfam’s ‘Inequality Kills’ report and the ICE360 survey, well establish that the recovery in economic growth in India is K-shaped, meaning that the incomes of the poorer sections of the society are decreasing, while those of the richer sections are increasing. As many have argued, while this trend has been exacerbated by the pandemic, the country has been experiencing increasing inequality over the last couple of decades. Further, the period after 2016 has also seen stagnant real wages and increasing unemployment.
A conservative view
In this context, it was expected that the current Budget would see an expansion in government spending on the social sector. Greater spending on the social sector can contribute to improvements in human development outcomes, provide a cushion to people during the current economic crisis and also contribute to boosting private consumption demand which in turn can have a positive multiplier effect on the economy. However, despite the current situation of a demand crisis, the Budget has taken a conservative view and seems to have prioritised meeting its fiscal deficit targets rather than using this opportunity to signal a path of employment-centred and inclusive growth.
A complete disconnect
While it acknowledged that learning among children has been affected because of prolonged periods of school closures, the government announced that it will expand its ‘one class, oneTVchannel’ scheme instead of announcing enhanced allocations for schools so that they can reopen with vigour. This reveals a complete disconnect with the situation on the ground where school infrastructure needs upgradation, teacher vacancies need to be filled and efforts need to be made to bring back children who have dropped out of school and also have huge learning losses to catch up on.
This is also reflected in the lower spending in the last two years as seen in the revised estimates (RE). The budget for school education at ₹63,449 crore is a slight improvement over last year’s ₹54,873 crore (2021-22 budget estimates, BE) and a mere increase of 6% in nominal terms compared to 2020-21 BE of ₹59,845 crore. After a grand announcement rechristening the school mid-day meal scheme as Pradhan Mantri Poshan Shakti Nirman, simply called PM Poshan, the allocation for the scheme has reduced from ₹11,500 crore last year to ₹10,233 crore this year.
In the midst of a pandemic, and despite repeated statements about strengthening the public health system, the overall budget for the Department of Health and Family Welfare at ₹83,000 crore has gone up by only 16% over the BE for 2021-22 and by less than ₹1,000 crore compared to the RE for 2021-22, which is ₹82,921 crore. However, by including water and sanitation in the budget for health, there is an increase being shown in health spending as a proportion of GDP. While spending on the drinking water mission is also extremely important, for the sake of consistency it cannot be clubbed with the health budget. Also, even though the budget for the Jal Jeevan Mission has increased from ₹50,000 crore to ₹60,000 crore, only 44% of the allocated funds to the Department of Water and Sanitation for 2021-22 has been spent as on end December 2021.
Through the pandemic period, the Public Distribution System has been a lifeline for many, although only 60% of the population are covered by ration cards currently under the National Food Security Act. Those who were eligible benefited from the additional free foodgrains that they have been given under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). However, the food subsidy (BE) for 2022-23 at ₹2.06 lakh crore is only enough to cover the regular NFSA entitlements. The indication is that there is no plan to extend the PMGKAY. The food subsidy RE for 2021-22 is ₹2.86 lakh crore.
Budgets for important schemes such as Saksham Anganwadi, maternity entitlements and social security pensions are around the same as the allocations for last year. The allocation for MGNREGA at ₹73,000 crore also does not reflect the increased demand for work or thethe pending wages of ₹21,000 crore.
On the whole, in the Budget for 2022-23, the social sector has once again been betrayed while this is perhaps a time when it needs the most support. As seen above, the resources allocated for crucial government schemes in the fields of health, education, nutrition, and social protection have remained stagnant or show negligent increase. In fact, the budgets for these schemes have been declining in real terms since 2015. India already starts off from a weak position of having very low spending in the critical areas of social protection, education and health. For instance, the World Social Protection Report 2020-22, brought out by the International Labour Organization, shows that the spending on social protection (excluding health) in India is 1.4% of the GDP, while the average for low-middle income countries is 2.5%. Budgets on health and education have also been low, much below the desirable levels of 3% and 6% of the GDP. This continued negligence does not bode well for inclusive development in India.
Dipa Sinha is faculty at Dr. B. R. Ambedkar University Delhi