Building Social Capital

Source-This post on Building Social Capital has been created based on the article “Building social capital – India needs to spend more on education and health” published in “Business Standard” on 29 July 2024.

UPSC Syllabus-GS Paper-2- Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.

Context -The Economic Survey 2023-24 showed progress in health and education in India, crucial for economic growth. However, the Department of School Education and Literacy saw a small 0.73% increase, while higher education funding was reduced by 16%, resulting in an overall 7% decrease for the Ministry of Education.

The combined social-sector expenditure of the Centre and states as a percentage of GDP has increased in recent years. This increase is primarily driven by improved spending on health and healthcare facilities.

What is the significance of the Health and Education sector?

1) Complementary Nature: – Health and education work together to boost living standards, productivity, and the effectiveness of human capital.

2) Economic Growth: –Improvements in these areas are essential for steady economic growth, as shown by growth models.

What are the issues?

1) Global Comparison- Despite enhanced allocation in recent budget, India’s spending on education (2.7% of GDP) and health (1.9% of GDP) is still much lower than global standards.

2) Need for Educational Reform -India wants to build top educational institutions, but the latest ASER report shows that over half of 14–18-year-olds struggle with basic division. This highlights the need for urgent improvements in education.

Read More- Social Sector Allocations in Budget 2024

3) Higher Education Specifics- Funding for autonomous bodies improved slightly, but the University Grants Commission (UGC) experienced a more than 50% budget cut compared to last year. This reduction could potentially hamper transfers to universities.

What should be the way forward?

A) Adequate healthcare funding is important for addressing health issues that impact productivity and for positioning India as a top destination for medical tourism.

B) There is a need to Invest strategically in health and education sectors to meet higher sustainable growth over the long run.

C)There is a need to focus on closing gaps in the educational System.

Question for practice

Why are the Health and Education sectors important, and what problems do they face?