The Budget 2023-24 will likely lay emphasis on the social sector and schemes on health and education, both public goods that have huge multiplier benefits for human capital and economic growth, sources told FE.
It will also prioritise spending on schemes to boost the rural economy and the maintenance of rural roads.
Modernisation of police stations will likely be another key area to reduce dependency on the Army or central para- military forces for internal security.
With the Covid pandemic exposing the weak public health infrastructure of the country, the Centre will likely route more capital investments in primary health centres, district hospitals, wellness centres and national ambulance infrastructure. Steps will also likely be announced to bridge the shortfall in the healthcare workforce.
In order to provide health insurance to vulnerable sections, the Centre introduced the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) in 2018. It provides up to Rs 5 lakh per family per year to 500 million people or 40% of the population in the bottom of the pyramid. Its coverage will be expanded further.
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The public expenditure on health – shared between the Centre and states in 3:7 ratio, is still less than 2% GDP in India, much lower than in comparable countries like Indonesia and China.
According to the World Bank data, India’s general government health expenditure (per capita, in purchasing power parity terms) stood at just $69.2 in 2019, way below the global average of $865.7. In China, such spending was to the tune of $492.7.
Urging the Centre to spend more on healthcare, the 15th Finance Commission had recommended that India’s public expenditure on health should increase to 2.5% of GDP by 2025. The Centre has budgeted to spend about Rs 86,000 crore in FY23, up marginally from Rs 84,000 crore in FY22.
Education, another critical area, gets about 3% of GDP as combined funding from the Centre and states, which is much below the average of developed countries. About 84% of total expenditure on education is done by the states.
The Centre will likely allocate more funds for school and higher education next year. One of the focus areas would be on the scheme for the development of PM Schools for Rising India (PM-SHRI), with all modern learning and training facilities, sources said.
Besides low investment, the education system faces various challenges such as inadequate teacher training, teacher vacancies and absenteeism and an ineffective regulatory regime. The Centre would focus on implementation of the National Education Policy to address many of the above challenges, sources said.
The Centre’s budget estimate for the education sector is Rs 1.04 trillion for FY23, about 20% more than Rs 80,000 crore spent in FY22.
With law and order becoming a major issue in many parts of the country, the Centre will ramp up funding for modernisation of state police forces.
Additional funds would strengthen police infrastructure at cutting edge level by construction of secure police stations, training centres, modern weaponry, communication equipment and forensic set-up, among others.
The Centre has budgeted to spend Rs 1.18 trillion on police, mostly central para-military, in FY23 as against Rs 1.06 trillion spent last year.