Nirmala Sitharaman's Budget 2020: What it means for the social sector

Expectations remain high but fiscal constraints could lead to the emergence of implementation challenges in many of the schemes during the year

Social sector

The finance minister has attempted to maintain a delicate balance between remaining investment-friendly and yet driving consumption, within the overall constraints of maintaining the fiscal deficit target.  This has led to unchanged or marginal increases in allocations to most schemes focusing on the social sector. The recurring mention of public private partnership (PPP) indicates a willingness on the part of the government to look at financial resources from the private sector to bridge the investment gap. Considering the fiscal constraints, we could expect implementation challenges in many of the schemes during the year, considering that the outputs and outcomes expected have not been reduced.

Health care

The budget is focused on both preventive and curative aspects of health care along with medical education, skill development and adopting emerging technologies. Despite the comprehensive interventions suggested, the overall allocation has increased by only 4 per cent.

Mission Indradhanush’s ambit has been extended to cover 12 new diseases and five new vaccines, along with the Fit India movement to combat the non-communicable disease burden. The Ayushman Bharat-Health & Wellness Centres (HWCs) seem to have got a bad deal, with no fund increase despite the announcement of setting up 1.5 lakh HWCs by 2022 in the last Budget, with only 28,005 HWCs achieved as per the Economic Survey.   

Addressing supply-side shortages of infrastructure and quality services through PPP by setting up Ayushman-empanelled hospitals with a ‘Viability Gap funding window’ seems to be a pragmatic strategy. The unchanged allocation to Ayushman Bharat at Rs 6,400 crore may be inadequate considering the increasing demand.

While the Budget shows the intent to address shortage of medical doctors by setting up medical colleges attached to district hospitals, the unchanged allocation to human resources at Rs 4,686 crore appears inadequate. Similarly, Pradhan Mantri Bharatiya Jan Aushadi Pariyojna Kendra aims to double the product basket to make 2000 generic drugs and 300 surgicals affordable by 2024; and has an unaltered allocation, making the target overly ambitious. The 14 per cent increase in allocation to the health research component is a positive development, considering the resurgence of new diseases.

The finance minister alluded to the imminent notification of a National Education Policy, attracting additional finances, building the “Study in India” brand and improving quality of education, especially for deprived sections of society in her speech. The overall financial allocation at Rs 99,312 crore to MoHRD is a marginal 5 per cent increase over the current year and reflects across all major education schemes.

The core scheme of Samagra Shiksha Abhiyan (after convergence of Sarva Shiksha Abhiyan, Rashtriya Madhyamik Shiksha Abhiyan, and Teacher Education schemes in the last Budget) has received only a marginal increase and may face implementation challenges. The announcements and funding for Operation Digital Board and Pradhan Mantri Innovative Learning Programme (DHRUV) is a step in the right direction to promote innovation in secondary education.

The Rs 500 crore allocation for world class higher education institutions (54 per cent increase) indicates the focus on quality. Access to Degree-level programmes is planned to be amplified through online education and Prime Minister’s Fellowships for students of deprived communities. However, the previous Budget’s emphasis on programmes for research and innovation does not find any mention and the allocation for this head has been reduced by 9 per cent in the current year.

The government commitment to invest in youth is visible in the increased allocation to the ministry of skill development and entrepreneurship by 19 per cent and measures to enhance uptake of apprenticeship through a 43 per cent increased allocation to the ‘promotion for apprenticeship' component. This intent of addressing the “education to job” transition challenge is also reflected in the proposed one-year internship for fresh engineers with Urban Local Bodies.

While the impetus for skill development is welcome, the issue of low uptake leading to lower utilisation of funds in the current year and the 40 per cent gap in achieving the one-crore trainee target through the Pradhan Mantri Kaushal Vikas Yojna calls for introspection. The Budget also is silent on initiatives towards facilitating learning and progression pathways across vocational, technical and general education as envisaged in the skill policy.

The overall Budget’s thrust towards infrastructure development and augmenting digitisation pan-India is expected to open avenues for up-skilling and digital skilling.

Textiles

The textile and apparel sector is one of the largest contributors to job creation and its importance is reflected in the 49 per cent increase in allocations for the Integrated Scheme for Skill Development with cumulative training of 12 lakh people.

The announcement launching the four-year National Technical Textile Mission with an outlay of Rs 1,480 crore targeting reduced imports by supporting domestic industry is a welcome measure. This mission is likely to help the domestic industry substitute 20 per cent of the current $16 billion imports over the next 5 years, with an additional investment of nearly Rs 6,000 crore generating  employment for around 2,000 people. 

The Budget allocation for the National Rural Livelihood Mission remains unchanged, with a marginal 2 per cent increase to Rs 9,210 crore. However, the conception of additional livelihood opportunities across sectors is a positive development for the rural economy. Promoting opportunities for rural youth in fisheries extension work as ‘Sagar-Mitras’, extending support to create 500 Fish Farmer Producer Organisations and the 25 per cent increase for the Blue Revolution will positively impact rural livelihoods. Linking of women SHGs with MUDRA and NABARD assistance schemes as part of ‘Dhaanya Laxmi’ to provide seed storage is expected to enhance income for women and also address an unmet need of farmers. The near-150 per cent increase in allocation to the Scheme for Fund for Regeneration of Traditional Industries (SFURTI) at Rs 465 crore will be vital to propel traditional industries and rural non-farm income.

The Mahatma Gandhi National Rural Employment Guarantee Scheme has a 13 per cent lower allocation as compared to the revised estimates of 2019-20. This may constrain the ambitious target of achieving 270 crore person-days.

While there is no major increase in overall outlay for the ministry of tribal affairs, the inclusion of budget items in other ministries means an allocation of Rs 53,653 crore from 39 ministries and government departments with major contributions from health, education and the livelihoods sector.

Education has received tremendous focus with a near-1000 per cent increase in allocation for setting up Eklavya Model Residential Schools in tribal-dominated blocks by 2022 at Rs 1,313 crore. 

The announcement setting up a Tribal Museum in Ranchi is also a welcome measure to preserve and celebrate the tribal way of life.

Ashok Varma, Partner and Leader Social Sector, PwC India

Gender

While the Budget speech strongly alludes to gender mainstreaming, the unchanged allocation at Rs 28,600 crore for 100 per cent women-specific programmes seems to be a casualty of fiscal constraints. The Mission for  Protection and Empowerment of Women has a 21 per cent increase in allocation from Rs 961 crore utilised in the current year, which is 72 per cent of the originally allocated Rs 1,330 crore. Most flagship schemes, such as Beti Bachao, Beti Padhao, Mahila Shakti Kendra and Working Women’s Hostel, have lower utilisation in the current year. 

In FY19-20, only 30 states have reported any utilisation of Nirbhaya funds and amongst those who did utilize these, 24 states have less than 30 per cent utilisation. The government may have to work closely with the states for effective utilisation of funds in this sector.

The governments’ commitment to address the issue of water security is reflected in the 15 per cent increase in the allocation for the Jal Jeevan Mission.

Through the Har Ghar Jal programme, the government aims to ensure 100 per cent piped water supply to all rural households by 2024, with such access currently being at 45 per cent.

The continuing commitment to the Swacch Bharat Mission-Gramin is visible in the 18 per cent increase in funding at Rs 21,518 crore. The additional allocation will definitely help to sustain the ODF programme through investments in solid and water waste managements. The intent and resolve to bring in technologies to completely eradicate manual cleaning of sewers and septic tanks is really a welcome move.

Ashok Varma, Partner and Leader Social Sector, PwC India
 

Assisted by: Amrita Gupta, Garima Singhal, Ishita Joshi, Jyoti Jha, Mrinalini Badrinarayan, Mukta Tyagi, Satyajit Shinde, Sumit Parmar, Swati Sharma