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Social welfare schemes and their share in the Budget

May 24, 2023

Context:

  1. Reducing shares of social welfare schemes in the Budget.

Details

  1. It is highlighted that the experts criticize the Union Budget of 2023-24 as well as 2022-23 for ignoring social spending and favouring capital expenditure.
  2. However, the author presents a research analysis that the trend of declining central government spending on critical social schemes that ensure basic rights have declined as a proportion of GDP.

Research Analysis:

  1. Saksham Anganwadi and Poshan 2.0 were schemes to address child malnutrition and hunger.
  2. In 2021, the Anganwadi programme (ICDS) was clubbed with POSHAN Abhiyaan and a nutrition scheme for adolescent girls.
  3. Moreover, its allocation declined from 0.13% of GDP (2014-15) to 0.07% in 2023-24.
  4. The Mid Day Meal (MDM) scheme has shown considerable improvements in attendance, nutritional outcomes, and stunting among children.
  5. The budget allocation for the scheme has decreased from 0.08% in 2014-15 to 0.04% in 2023-2024.
  6. The maternity benefits programme or PM Matru Vandana Yojana (PMMVY) provides conditional cash transfers of ₹5000 to women in the unorganized sector.
  7. According to National Food Security Act (NFSA), it requires almost ₹14000 crore, however, PMMVY Budget is yet to cross ₹3000 crore.
  8. The budget of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and NFSA have also been reduced as a share of GDP.
  9. MGNREGA as a share of GDP has reduced from 0.26% in 2014-15 to 0.20% in 2023-24.
  10. NFSA declined from 0.94% in 2014-15 to 0.65% in 2023-24.
  11. The share of the National Social Assistance Programme (NSAP) has considerably declined (except 2020-21) from 0.06% in 2014-15 to 0.03% in 2023-24.
  12. Furthermore, central expenditure on school education (primary and secondary) has constantly reduced from 0.37% in 2014-15 to 0.23% in 2023-24.

Areas of Gains:

  1. The central healthcare expenditure increased marginally from 0.25% in 2014-15 to 0.30% in 2023-24.
  2. There was improvement in providing tangible goods like access to cooking fuel, and electricity.
  3. The situation also improved in the financial inclusion of women.

Associated Concerns:

  1. As per the National Family Health Survey (NFHS)-5, the share of anaemic, underweight, and stunted children in India is 67%, 32%, and 36%, respectively.
  2. According to the Reserve Bank of India (RBI), real wages of casual workers grew at less than 1% per year from 2014-15 to 2021-22. It is highlighted by various economists that this is a worrying trend for economic growth.
  3. The pensions for the elderly have not increased since 2006. It stands at a meagre ₹200 per month for the elderly and ₹300 for widows.
  4. The World Social Protection Report by the International Labour Organization (ILO) highlights that approximately 24.8% of Indians are covered by at least one social security scheme against the Asia-Pacific average of 44%.
  5. India performs poorly on Human Development Index with a rank of 132.

Way Ahead:

  1. As per international experience, the share of social expenditure in GDP should grow proportionately with the GDP of the country.
  2. It is suggested that government should recover the revenue foregone due to tax concessions and the lowering of corporate tax rates in 2019.