Social Sector

The 2019 Union Budget has touched on all the components of the social sector in bits and pieces. However, the overall framework for the sector is not clear. Though a key initiative of the current government has been the increase in direct benefit transfers for welfare schemes, there is a need for increasing the state capacity, particularly of the poorer states, as the major social sector expenditures, mainly on health and education, are done by the states.

The 2003-04 Budget fails to address the major problems of agriculture, employment generation and the social sector.

This paper presents trends in public expenditures on social sector and poverty alleviation programmes from 1990-91. A considerable proportion of these expenditures is undertaken by the states but the central share seems to be increasing over time. This paper analyses trends in state expenditure, expenditure by the central government and central and state adjusted combined expenditures. Overall, expenditure on social sector schemes is increasing in real terms but mainly through increased expenditure of the central government. The state governments seem to be easing out of their constitutional commitment to sustain programmes in the social sectors, which is a matter of concern. Secondly, there are large inter-sectoral reallocations of funds in the poverty alleviation sectors. One major development has been that large funds that were allocated to employment generation have now been diverted to the rural road construction programme. This reallocation may have serious implications for employment generation.