Economy

For the Social Sector, Budget 2018 a Cause for Caution Rather Than Celebration

While some ambitious schemes have been announced, there is no clarity on where the money for these will come from.

Union minister for finance and corporate affairs Arun Jaitley with the minister of state for finance Shiv Pratap Shukla addresses a press conference after Union Budget 2018-19 presentation, in New Delhi on Thursday. Credit: PTI/Subhav Shukla

Union minister for finance and corporate affairs Arun Jaitley with the minister of state for finance Shiv Pratap Shukla addresses a press conference after Union Budget 2018-19 presentation, in New Delhi on Thursday. Credit: PTI/Subhav Shukla

Against a background of mounting distress for weaker sections of the population and people in rural areas, there was a clear need for a substantial increase in allocations for the social sector in the Union Budget 2018-19. While the Budget speech made an effort to create the impression that this was being done, in reality there are no significant gains for the social sector.

The Budget speech says, “Govt’s estimated schematic budgetary expenditure on health, education and social protection for 2018-19 is Rs. 1.38 lakh crore against estimated expenditure of Rs. 1.22 lakh crore in BE 2017-18. This expenditure is likely to go up by at least Rs. 15000 crore in 2018-19, on account of additional allocation during the year and extra budgetary expenditure, including through Higher Education Financing Agency.”

In the three important areas of health, education and social protection, the increase in allocation is only about 13% or so. This is negligible in real terms after taking into account the impact of inflation, and even this negligible increase is at least partly provided for by extra-budgetary resources.


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Despite this, some very ambitious schemes have been announced – raising the question of where the resources are going to come from. The most discussed such scheme is the “flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage up to 5 lakh rupees  per family per year for secondary and tertiary care hospitalization”. Finance minister Arun Jaitley described this as the “world’s largest government-funded healthcare programme” in his Budget speech. But how can such an ambitious scheme be provided for without increasing the overall budget for health and social protection in real terms?

There was also a mention of as many as 1.5 lakh health and well-being centres, which were described as providing very important services. But a paltry budget of Rs 1,200 crore is unlikely to be adequate for even a fraction of the stated number of such centres.

There are other examples in the Budget of the planned expenditure not matching the talk. In the case of livelihood and infrastructure in rural areas, the Budget speech says that the total amount to be spent by the involved ministries will be Rs 14.34 lakh crore, including extra-budgetary and non-budgetary resources of Rs 11.98 lakh crore. The amount mentioned is huge (and many times more than the total budget of the rural development ministry) – and the shock of hearing only increases on learning that around 80% of this is from extra-budgetary and non-budgetary resources.


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In the interests of budget transparency, it is important to explain the programmes and initiatives announced clearly, so people know where the resources will come from. Farmers have been told that the process for significantly increasing the minimum support price has already started and they will be getting even bigger gains in the next crop. But people will find this hard to believe this, and so they should at least know how and from where these benefits will come. They cannot be seen in the allocations for the food subsidy or in the allocations for the agriculture ministry – where else are people supposed to look?

As it is, this year the Union budget has been presented in a situation of much greater uncertainty regarding resource availability than in normal years, partly due to Goods and Services Tax-related factors. Revenue receipts up to November 2017 were 53% of Budget Estimates for the financial year, compared with 58% for the same period for the preceding financial year.

This is why we need to be extra cautious this year regarding the downward revising of Budget Estimates for some aspects of social sector spending. Some widely-publicised initiatives may be used just for pre-election propaganda and remain confined to just a few areas, as one does not see any resource mobilisation for proper national-level implementation. There is need for very careful scrutiny of social sector expenditure throughout the financial year – and that may be more true this year than others.

Bharat Dogra is a freelance journalist who has been associated with several social movements and campaigns.     

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