Budget: Balancing act for social sector, strong focus on health is visible

There has been an attempt to build on earlier initiatives, but financial constraints may hamper execution and achievement of goals

Finance Minister Nirmala Sitharaman has attempted to respond to the unprecedented times by balancing allocations across various economic and social sector domains. The Budget is bereft of any major policy or strategic shift and is an attempt to continue to build on earlier interventions announced as part of the economic package.

Unchanged or marginal increases in allocations to most social schemes reflect financial constraints and could lead to implementation challenges during the year. However, the government has demonstrated its commitment by announcing a slew of schemes spanning five to six years. As expected, the strong focus on the health sector is visible across the Budget.

 

Health care

The overall allocation to “health and wellbeing”, across multiple departments, has increased by 137 per cent. 

The insurance component of Ayushman Bharat has received twice the allocation, to enhance health insurance coverage. Health and Wellness Centres (HWCs), have received 19 per cent more to meet an ambitious target of 110,000 HWCs by 2022. 

Despite the Economic Survey highlighting variations in availability of a trained health workforce, human resources and medical education has a reduced allocation. 

The announcement of the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana to support health systems, with an outlay of Rs 64,180 crore over six years, is a commendable initiative focused on emergency response and preparedness, with the aim of strengthening health systems.

Nutrition

Recent findings of the National Family Health Survey (NFHS-5) indicate an increase in the percentage of stunted children in 13 states/Union Territories (UTs) and a surge of underweight children in 16 states/UTs, as compared to NFHS-4 (2015-16). 

With the objective of intensifying the fight against malnutrition, Mission POSHAN 2.0 has been announced. It aggregates ongoing schemes like anganwadi services, schemes for adolescent girls, and the national creche scheme with an allocation of Rs 20,105 crore (a 12 per cent increase). 

Water and sanitation 

Clean water, sanitation and hygiene are recognised as key determinants of public health. The increased allocation and policy directives in the Budget reflect this. 

The department of drinking water and sanitation has received Rs 60,030 crore, a 253 per cent increase over last year, with 86 per cent of this going to the Jal Jeevan Mission (JJM). The 335 per cent increase in the allocation to JJM appears to be appropriate for reaching the 2024 goal of universal rural household tap water connectivity. JJM (Urban) has received an outlay of Rs 287,000 crore over five years; however, the Budget is silent on implementation modalities. 

Under the Swachh Bharat Mission-Gramin (SBM-G), the focus is on sustaining open-defecation-free behaviour and managing waste. An increase of 150 per cent in the information, education, and communication (IEC) budget indicates the focus on promoting hygiene behaviour and sustaining infrastructure development. The idea of engaging start-ups in rural areas to come up with innovative solutions for sludge management is a well-thought-out step towards eliminating manual cleaning of septic waste in the near future. 

Education

The implementation of the National Education Policy 2020 has been impacted by the pandemic. The current Budget reflects the policy priorities, but falls short on allocations, because of strained finances. The overall allocation for the ministry of education has witnessed a 10 per cent increase from the previous year.

The Samagra Shiksha Abhiyan has received an 11 per cent higher allocation from the previous year. However, the Budget is silent on proposing measures to bridge the digital divide in learning (especially in rural areas) and improving learning outcomes.

In higher education, the policy focus is on internationalisation and establishment of world-class institutions, supported by a 55 per cent increase in allocation. To address access to education and learning during Covid-19, the allocation for Digital India e-learning has been increased by 111 per cent. But the allocation for the research and innovation component is 16 per cent lower than last year. 

Skill development

There is a marginal 2 per cent increase in allocation to the ministry of skill development and entrepreneurship. The apprenticeship training component has received a 186 per cent increase in allocation, to provide apprenticeship opportunities to graduate engineers, diploma-holders and 12th vocational graduates. This attempt to smoothen the transition from “schools to jobs” is a positive move and has got a fillip from the announcements on realigning the existing National Apprenticeship Training Scheme (NATS) and amending the Apprenticeship Act. 

The intent to boost entrepreneurship and start-ups is reflected in a four-fold increase in budgetary allocation. Despite this, the overall allocation of Rs 50 crore looks grossly inadequate for a country like India, if it is to be on a par with the start-up capitals of the world.

The government’s intent of making India reservoir of skilled manpower is reflected in its initiatives towards forging international collaborations. Overall, the Budget’s impetus on promotion of apprenticeship and creation of job avenues is expected to accelerate the pace of transition of the informal workforce to the formal sector. 

Food subsidy

The food subsidy has played a pivotal role in averting hunger and distress in both rural and urban areas during the pandemic. This is reflected in an all-time high spend of Rs 422,618 crore in FY20-21. It is estimated that the Pradhan Mantri Garib Kalyan Anna Yojana covered nearly 810 million beneficiaries and provided additional food grains above National Food Security Act (NFSA)-mandated requirements in the wake of the pandemic.

Under the Atmanirbhar Bharat Package, approximately 80 million migrants, who were not covered under the NFSA or state ration cards, received benefits. The government proposes to continue the support to migrant workers through the “One Nation One Ration Card” scheme.

While the worst is over, livelihoods and jobs have not rebounded to pre-pandemic levels and continued dependence on food subsidy is expected in the initial few months of 2021-22. Given this, the allocation of Rs 242,836 crore may not be adequate and will need revision during the year. Further, it is noteworthy that the increased allocation includes the share of subsidy which was earlier in the books of the Food Corporation of India (FCI) as borrowings, which as a practice has been discontinued in the current Budget. 

Rural livelihoods

The stimulus package announced in May 2020 increased allocations for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme by Rs 40,000 crore. This helped in providing livelihood support to an increased number of families and higher person days of work — around 310 crore person-days till January 2021.

MGNREGA allocations over the past few years reflect a steadily increasing trend and there was an expectation for the allocation to be higher this year. The allocation of Rs 73,000 crore seems inadequate, given that the effects of the pandemic are still being felt on livelihoods. 

Further, the National Rural Livelihood Mission witnessed an increase of 49 per cent to help enhance the capacity of the rural poor through improved skills. 

Ashok Varma, Partner and Leader Social Sector, PwC India

Gender

There is an attempt to combine multiple schemes into one as part of consolidation and pooling of resources. The actual expenditure in gender focused schemes has been lower in FY20-21.

The gender Budget for ‘SAMARTHYA’ has received a 78 per cent increase from the previous year. This includes the combined allocation for the four existing schemes namely, Pradhan Mantri Matru Vandana Yojana, Mahila Shakti Kendra, Beti Bachao Beti Padhao, and Gender Budgeting and Research, Publication and Monitoring. 

‘SAMBAL’, with a 130 per cent increase, reflects the combined allocation for seven existing schemes namely, Swadhar Greh, Ujjawala, Working Women’s Hostel, Women’s Helpline, One Stop Centre, Mahila Police Volunteers, and Home for Widows. 

The Covid-19 outbreak has further worsened existing inequalities among women. While the overall Budget allocation towards women-centric schemes affirms the government’s commitment towards inclusion, a more gender responsive and convergent approach could help in reducing gender inequality in the country.

Tribal welfare

The allocation to the ministry of tribal affairs has increased by 37 per cent. A boost has been provided to Eklavya Model Residential Schools (EMRS) in tribal areas with an increase in the unit cost of such schools from Rs 20 crore to Rs 38 crore, and Rs 48 crore in hilly and difficult terrain. This will benefit about 400 EMRS, which are already sanctioned for construction till 2022 with improved infrastructure.

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