Budget FY24 has presented a mixed bag for the social sector. There seems to have been some backpedalling on allocations, as an IndiaSpend analysis of the social sector budgets over 2009 to 2023 shows. As a percentage of the Centre’s overall spending, it has fallen below 20% for the first time in this period. Crucially, the outlays for the health and education ministries, as a percentage of the gross domestic product (GDP), has remained flat compared with the revised estimates for the current fiscal. The overall government (the Centre and states) spending on health, at 2.1% of the GDP in FY23, is still short of the 2.5% goal the National Health Policy 2017 has set for public spending, though it has moved closer to this following the pandemic. For education, the scenario is a lot more concerning, with government spending at a mere 2.9% in FY23 against the National Education Policy 2020’s goal of 6%. On both these fronts, the Centre and the states need to significantly step up their commitment.
However, the direction of spending on some other social sector fronts indicated by the Budget is somewhat progressive. The reimagining of teacher training signals a welcome change in an area that desperately needed updating. Also, the Rs 4,000 crore allocated to the Pradhan Mantri Schools for Rising India, under which close to 15,000 exemplar schools will be developed, is a promising beginning to the newly-minted centrally sponsored scheme. The finance minister also underscored her focus on improving health and education outcomes amongst India’s tribal population—through the Sickle Cell Anaemia Mission and the bolstering of human resources for the Eklavya Model Residential Schools—which should greatly benefit some of the most vulnerable sections of the country. This is expected to be part of the Rs 15,000 crore PVTG (particularly vulnerable tribal groups) Development Mission, which aims to “saturate” such families and habitations with safe housing, clean drinking water and sanitation, improved access to education and health, etc.
The Budget has also given skill development a major boost, with the increased allocation to the Pradhan Mantri Kaushal Vikas Yojana—the latest iteration will be centred on skilling the youth for the new-age economy’s needs, in areas such as artificial intelligence, robotics, mechatronics, among others. The National Apprenticeship Promotion Scheme, which will give stipend support to close to five million youth engaged as apprentices by industry, should make apprenticeship more attractive in a country that needs urgent tailoring of skills as per industry needs. At 4% over the current fiscal, the increase in the overall gender budget is marginal, but, the introduction of a new small savings scheme for women, the Mahila Samman Savings Certificate, nshould be welcomed, as also the vision to drive women-led enterprise through self-help groups.
While the Budget has a much lower outlay for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the previous years have shown that the government has been quick to respond to demand for such employment through announcement of allocations throughout the remainder of the fiscal. Also, as much as funding, the programme requires fixing of lingering issues such as payment delays. The same is the case for PM-POSHAN, the school meals scheme, where the Centre has plugged deficits of funding through additional allocations. The Budget’s massive capex push may have limited the fiscal room for welfare spending, but what needs to be understood is that the capex itself will translate into welfare gains for the population, through the jobs created.