Budget 2024: For the social sector, it is old wine in an old bottle Premium

Budget 2024: There are decreased allocations in real terms in the Budget for a number of social sector schemes

Budget 2024 is no different from previous years as far as allocations for the social sector are concerned. This is despite the fact that the youth, farmers, women, and the poor are identified as the main focus groups. The Economic Survey has a chapter called ‘Social Sector: Benefits that Empower’, which states, “India’s high and sustained economic growth in recent years is being accompanied by social and institutional progress, underpinned by transformational and effective implementation of Government programmes with an empowering edge that has become the hallmark of a transformed approach to welfare”. It seems as if this approach is characterised by decreasing allocations in the Budget for a number of social sector schemes (in real terms).

The allocation for school education has increased by a nominal ₹5,000 crore and that for higher education has seen a minor increase of ₹3,000 crore. In both cases, the estimated ‘recoveries’ are substantially higher compared to previous years, indicating higher fees and self-financing schemes in educational institutions. The allocation for the Department of Health and Family Welfare has barely increased by ₹1,500 crore compared to last year. The allocations for MGNREGA is the same as the revised estimates (RE) for last year. Although this is a demand-driven scheme, the allocation gives a message to the States on how much is available. The availability of work on the ground gets calibrated accordingly. There is hardly an increase in food subsidy too, despite the need for expanding coverage to current population levels (the PDS continues to use 2011 Census population figures) as well as the anticipated increase in the economic costs of foodgrains.

Smaller, yet critical, schemes that address vulnerable populations also have not got much attention. There is a slight increase from BE 2023-24 of ₹11,600 crore to ₹12,467 crore for the POSHAN scheme (school mid-day meal). This is, however, less than the actual expenditure on this scheme in 2022-23 (₹12,681 crore). The Saksham Anganwadi scheme for children under six years, pregnant and lactating women, and adolescent girls has got a budgetary allocation of ₹21,200 crore (BE 2023-24 was ₹20,554 crore). There is clearly no hope for higher salaries for Anganwadi workers (which have not been revised since 2018), or for higher honorarium for mid-day meal cooks, or for higher allocations for the supplementary nutrition given to children.

The allocation for Samarthya, which includes maternity entitlements (Pradhan Mantri Matru Vandana Yojana, PMMVY) and the creche schemes, has reduced to ₹2,517 crore compared to BE 2023-24 of ₹2,582 crore. The PMMVY is known to exclude at least half the eligible women, and the amount of ₹5,000 per pregnant woman has remained unchanged since the inception of the scheme in 2017. The budget for the National Social Assistance Programme (NSAP), which gives social security pensions to the elderly, single women, and disabled, remains unchanged at ₹9,652 crore. Once again, this is a reduction in real terms and does not leave any room for either increase in coverage or in the amount to even adjust for inflation. The central contribution to these social security pensions has been ₹200 per person per month since 2009.

To be clear, these reductions cannot be justified on account of better schemes having taken their place. If at all, for some of these benefits, the focus of the government seems to be shifting more to contributory schemes, such as the Atal Pension Yojana in the case of pensions. In other instances, such as in the case of education or health, the shift is towards privatisation and commercialisation with a greater emphasis on ‘cost-effectiveness’ in social spending, which the Economic Survey calls one of the “pillars of the new approach to welfare”. Such an approach does not adequately take into account either the problems with applying market principles to these social services or the returns to the economy in the long run of improving human development outcomes. Importantly, equity considerations are ignored.

On the other hand, there is a lot of expectation from the private sector to respond to the employment challenge. The ‘Prime Minister’s Package for Employment and Skilling’ includes government-sponsored internships, formalisation of jobs through incentives for EPFO enrolments, and skill-development programmes. These schemes do not seem very impressive when one looks at the budgetary allocations. This entire package has an allocation of ₹2 lakh crore over a period of five years, with much of it linked to the response of the industry. Further, the private sector is required to spend money towards this package from CSR funds. By allowing this, the CSR funds through which companies contribute back to society in some minimal way, are now mandated to be used towards subsidising wages for themselves.

Rather than discussing dampened demand, stagnant wages, and what can be done to revive employment, the announcement only includes supply-side schemes towards incentivising the private sector to increase employment. Different versions of this have been tried earlier and have failed. Whether this package will be any different remains to be seen.