Social Sector Allocations in Budget 2024

Source-This post on Social Sector Allocations in Budget 2024 has been created based on the article “For the social sector, it is old wine in an old bottle” published in “The Hindu” on 24 July 2024.

UPSC Syllabus-GS Paper-3- Government Budgeting.

Context-The Budget 2024 continues the trend of previous years regarding social sector allocations, despite claiming to focus on youth, farmers, women, and the poor. The Economic Survey chapter “Social Sector: Benefits that Empower” suggests progress in welfare programs, but the budget allocations tell a different story.

What are the allocations under various social sectors and employment schemes in the new budget?

1) Education-

1. School Education– There has been a nominal increase of ₹5,000 crore in allocation, with higher estimated ‘recoveries’. This indicates a rise in fees and self-financing schemes.
2. Higher Education -There was a minor increase of ₹3,000 crore in allocation, with a similar trend of higher estimated ‘recoveries’.

2) Health and Family Welfare -There was a marginal increase of ₹1,500 crore compared to the previous year, raising concerns about the adequacy of funding for healthcare initiatives.

A) Food Subsidy: There was almost no increase, despite the need to expand coverage to current population levels and address the anticipated rise in economic costs of food grains. The current PDS still relies on 2011 Census population figures.

B) POSHAN Scheme (School Mid-Day Meal) -There was a slight increase from ₹11,600 crore to ₹12,467 crore, but it remains below the actual expenditure of ₹12,681 crore in 2022-23.

C) Saksham Anganwadi Scheme-There was a marginal increase from ₹20,554 crore to ₹21,200 crore. However, there are no provisions for higher salaries for Anganwadi workers (unchanged since 2018), increased honorarium for mid-day meal cooks, or enhanced allocations for supplementary nutrition for children.

D) Samarthya (Including PMMVY and Creche Schemes)- The allocation was reduced to ₹2,517 crore from ₹2,582 crore. The PMMVY excludes at least half of eligible women, and the amount of ₹5,000 per pregnant woman has remained unchanged since 2017.

3) Rural Employment and Poverty Alleviation

A) MGNREGA-The allocation remains unchanged from the revised estimates (RE) of the previous year, impacting state implementation and work availability due to its demand-driven nature.

B) The ‘Prime Minister’s Package for Employment and Skilling’-It includes government-sponsored internships, incentives for EPFO enrolments to formalize jobs, and skill-development programs. This package totals ₹2 lakh crore over five years, largely reliant on industry response. However, budgetary allocations for these initiatives seem insufficient.

A detailed article on Budget 2024-25 can be read here.

4) Social Security and Pensions

A) National Social Assistance Programme (NSAP): The budget remains unchanged at ₹9,652 crore, which is effectively a reduction in real terms considering inflation. There’s no room for expanding coverage or adjusting pension amounts, as the central contribution of ₹200 per person per month has remained unchanged since 2009.

What are the issues with these allocations?

1) Shift Towards Contributory Schemes and Privatization-The government is cutting benefits arbitrarily, favoring contributory schemes like the Atal Pension Yojana. In education and health sectors, there’s a clear trend towards privatization and prioritizing cost-effectiveness, as emphasized in the Economic Survey’s new welfare strategy.

2) Market Principles in Social Services -This approach ignores the difficulties of using market principles in social services and doesn’t account for the long-term economic benefits of enhancing human development outcomes.

3) Private Sector in Employment -The private sector is important for tackling the employment challenge and is mandated to allocate CSR funds towards this effort. However, this means CSR funds, originally intended for minimal societal contributions, are now required to subsidize their own wages.

Question for practice

What are the allocations under various social sectors and employment schemes in the new budget?