In the 15 years that have gone by, India has seen a significant transition in the social sector, and lived through a pandemic. At the Accountability Initiative, Centre for Policy Research, we have tracked the provision of welfare services and entitlements since 2008, in-step with the country’s evolution over these years. The year 2023 marks a moment to pause and reflect for us as we celebrate our 15th anniversary, and the Centre for Policy Research reaches its milestone of 50 years. But, aside from our legacy of evidence-based knowledge sharing, this reflection is important in one more way. In 2024, India will choose a new government. A lookback on welfare spending and outcomes is an essential first step to understanding future priorities and pathways to development.Drawing from previous Union Budgets, this Special Brief will dive into six major aspects. Firstly, reviewing the sources of funding available with the government. Secondly, analysing trends in expenditures including social sector allocations for key ministries and schemes. Thirdly, the devolution of funds to states who are primary spenders on welfare services. Fourthly, unpacking social sector schemes over the years. Fifthly, analysing select outputs and outcomes over time. Lastly, we offer our own experience by providing a snapshot of the changes in government Management Information Systems which are critical to monitoring welfare schemes, among other aspects.For the purpose of this Special Brief, we are covering the period from 2009-2023. Actual Government of India (GoI) expenditures have been used till Financial Year (FY) 2020-21. For FY 2021-22, figures are Revised Estimates (REs) and Budget Estimates (BEs) for FY 2022-23.Sources of funding and Government of India expendituresIn FY 2009-10, GoI’s Total Receipts (after devolution of taxes to states) stood at Rs 10.24 lakh crore. This increased to Rs 35.10 lakh crore in FY 2020-21. For the current fiscal year, i.e. FY 2022-23, a further increase to Rs 39.45 lakh crore was budgeted in the Budget Estimates (BEs). Out of Total Receipts, Revenue Receipts have nearly quadrupled in the last 15 years.The share of Revenue Receipts in GoI’s Total Receipts increased from 56% in FY 2009-10 to peak at 70% in FY 2016-17. In FY 2022-23 BEs, it is expected to lean back to the FY 2009-10 level. The share of Capital Receipts is rising, after a declining trend from FY 2009-10 to FY 2018-19. In FY 2020-21, the first year of the COVID-19 pandemic, extra borrowings increased the share of Capital Receipts to more than 50%. For the current year, it is estimated to be lower, at 44%.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.From FY 2009-10 to date, tax revenues and borrowings have formed the largest share in GoI’s Total Receipts. In FY 2009-10, as much as 45% of Total Receipts were from tax revenue, which increased to 58% in FY 2017- 18. Since then, however, the share of tax revenue has been declining, and it has necessitated higher borrowing in subsequent years. Share of tax revenue in Total Receipts was the lowest during the COVID-19 pandemic period, at 41% in FY 2020-21, when borrowings accounted for 52%. As the economy recovers and revenues become more buoyant, the share of borrowings was expected to decline to 42% in FY 2022-23 BEs, similar to FY 2009-10 levels.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/Meanwhile, expenditure on the revenue component has accounted for around 81-89% since the last 15 years, and the remaining 11-19% has been incurred as capital expenditure. In FY 2017-18, GoI spent 39% of total expenditure on committed liabilities, which declined by three percentage points in FY 2022-23 BEs and stood at 36%.An important area where GoI spends money is on subsidies such as fertilisers, petrol, and food, among others. A detailed look on subsidies is revealing.In FY 2009-10, GoI spent 14% of its expenditure on subsidies, which increased to 18% in FY 2012-13. Subsidies as a share of total expenditure started declining post FY 2014-15 from 16% to 9% in FY 2019- 20.Subsidies reached an all-time high in FY 2020-21, accounting for 20% of total expenditure. This was primarily due to food subsidies, as free food grains were given to those eligible under the Targeted Public Distribution System (TPDS) scheme as well as migrant families under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), a food security programme during the COVID-19 outbreak.In terms of the quantum of funds, in FY 2009-10, Rs 1.41 lakh crore was spent on subsidies. This increased by 83% to Rs 2.58 lakh crore in FY 2014-15. The decline in subsidies is also reflected not just as a share of total expenditure but also in terms of the quantum of funds. In FY 2019-20, the amount stood at Rs 2.28 lakh, 12% lower than those in FY 2014-15 even in nominal terms.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.Social sector expenditure trendsGoI’s expenditure on the social sector as a proportion of total expenditure has remained relatively static. In FY 2009–10, GoI spent 21% of its total expenditure on the social sector. This decreased marginally to 20% in FY 2019-20. Over the last 14 years, on average, nearly a third (30%) of GoI’s social sector spend was on providing subsidised food to the poorest two-thirds of the country. This share crossed 50% in FY 2020-21 during the pandemic.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.As can be seen in the graph on the next page, in terms of the share of social sector expenditure across different components apart from Food Subsidy, the other priority areas between FY 2009-10 and FY 2019-20-23 have been rural development (especially the employment guarantee scheme MGNREGS) at 21%, and education (mostly free education for all children, and including art and culture) at 16%.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.It was during the COVID-19 pandemic when the share of expenditure on social sector touched the highest ever at 30%. Food distribution and clearing arrears of the Food Corporation of India resulted in GoI spending Rs 5.55 lakh crore, the highest ever spend on any single-ticket item, apart from interest payments. The other departments which were prioritised in FY 2020-21 during the COVID-19 pandemic included the Department of Rural Development and the Department of Health and Family Welfare.Simultaneously, other critical departments saw spending cuts. These included the Ministry of Women and Child Development, Tribal and Minority Affairs, Water Resources and Drinking Water, and Youth Affairs and Culture.Another metric to see trends in expenditure across development areas is by studying the average annual growth rate during the same period. At the aggregate level, social sector expenditure grew at 11% annually between FY 2009-10-11 and FY 2020-21. Development heads that grew at a faster pace included Labour, Employment and Skill Development (19%); Housing, Urban Development, Water, and Sanitation (18%); Medical and Public Health and Family Welfare (12%); and Food Subsidy and Civil Supplies (13%).Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.In contrast, spending on Social Security and Welfare and Nutrition (8 per cent), and Education, Art and Culture (6 per cent) grew slower than average.A look at the Compounded Annual Growth Rate (CAGR) between FY 2009-10 and FY 2022-23 BEs finds that the broad area of Housing, Urban Development, Water and Sanitation has grown the most (15 times) from FY 2009- 10. Expenditures on Labour, Employment and Skill Development (9 times), and Medical Public Health and Family Welfare (4.3 times) have increased substantially as well since FY 2009-10.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.It is important to note that GoI spends only a fifth of its total expenditure on the social sector. State governments, conversely, devote a higher share to social sector spending. In FY 2020-21, 41% of states’ expenditure was on the social sector. It is budgeted to be 42% in FY 2022-23 BEs and is expected to be at a similar level in FY 2021- 22 REs.For states too, the share of spending on the social sector has grown slowly from FY 2009-10. A large increase actually occurred between FY 2004-05 and FY 2009-10 from 29% to 39%, according to the Reserve Bank of India’s report on state finances. We take a deeper look at state funding in the next section.Funding the states: Devolution, cess and surchargesWhile GoI has the sole authority to collect a larger share of taxes, the same is to be shared among itself and state governments by applying a formula recommended by the Finance Commission of that period. The share of cess and surcharges in the gross tax revenue of the Union government has gone up from between 5% and 7% in general, to between 15% and 20% in recent years. But the impact of high cess and surcharges is visible in the flattening of states’ share in recent years.Only GoI has the power to levy cess or surcharges. For instance, it collects road and infrastructure cess on retail sale of fuel, and its proceeds are used to build roads. It also collects a health and education cess often used to fund these sectors. For instance, 98% of total GoI allocations for the Pradhan Mantri Poshan Shakti Nirman (PM POSHAN) scheme came from money collected via cess in FY 2022-23 BEs. Collection in the form of cess and surcharges need not be shared with states. Thus, it is separate from the “divisible pool” of taxes, and belongs solely to GoI.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.The chart above encompasses broadly three Finance Commission periods. The 13th FC recommendations were operational from FY 2010-11 to FY 2014-15, the 14th FC from FY 2015-16 to FY 2019-20, and the 15th FC, 2020-21 onwards. FY 2009-10 was the last year of the 12th FC.In the 14th FC period (FY 2015-16 to FY 2019-20), the share of states jumped dramatically; it nearly doubled in three years. In FY 2019-20, the effect of cess and surcharges on devolution became visible. A slowdown in revenue and some adjustments to previous years’ transfers reduced the states’ share sharply.The resultant share of states in FY 2022-23 is very close to the share they had received back in FY 2011-12, when the 13th FC was in operation.The higher proportion of cess and surcharges has resulted in massive revenue in monetary terms. As we can see, non-divisible revenue now falls between Rs 4 lakh crore and Rs 5 lakh crore, compared to averaging at around Rs 50,000 crore for a decade.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/.A comprehensive lookback on social sector schemesWe analysed GoI scheme allocations for 19 schemes over time. This has been done in two ways: a) in nominal terms, or measured in terms of the prevailing actual prices at the time; and b) in real terms, or adjusting the allocations for changes in prices i.e. inflation. Data are from FY 2011-12 or when a given scheme began. Inflation base is as of 2012.In nominal terms, allocations for every scheme have increased, except for the Pradhan Mantri Gram Sadak Yojana (PMGSY). In fact, allocations doubled for 10 schemes: Child Protection Services (CPS), Swachh Bharat Mission – Gramin (SBM-G), Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), National Health Mission (NHM), Pradhan Mantri Awas Yojana – Gramin (PMAY-G), Pradhan Mantri Matru Vandana Yojana (PMMVY, erstwhile Indira Gandhi Matritva Sahyog Yojana), Pradhan Mantri Kisan Samman Nidhi (PM KISAN), Food Subsidy (FS), Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), and the Jal Jeevan Mission (JJM).However, the same is not the case when analysing allocations in real terms. Real allocations declined in 7 out of 19 selected schemes. These were: Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA), the Integrated Child Development Services (ICDS), Mission Saksham Anganwadi and Poshan 2.0, PM POSHAN, PMGSY, and National Social Assistance Programme (NSAP).Largely, the schemes that saw a big decrease in real terms are related to the provision of services. In fact, schemes that provide direct entitlements like houses (PMAY-G), toilets (SBM-G), maternity benefits (PMMVY), cash transfers (PM KISAN), and insurance (PMJAY) have been prioritised over time.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/Within major ministries, the share of scheme allocations has been studied over time. In most ministries or departments, the same scheme or schemes with the same objectives have remained priorities over time.Source: Union Expenditure Budget, FY 2011- 12 to FY 2022-23. Available online at: https://www.indiabudget.gov.in/. Outputs and outcomesAn analysis of the trends in scheme progress based on government available output and outcome data finds an upward trend, overall, barring employment. Analysis has been done for health, education, employment, and infrastructure. HealthTotal Fertility Rate (TFR) is the average number of children born to a woman in her lifetime. TFR of 2.1 is considered as the replacement level fertility rate at which population stability is achieved (i.e. population replaces itself). The National Population Policy, 2000 had sought to achieve replacement level fertility by the year 2010.As per the National Family Health Survey (NFHS), TFR decreased from 2.7 in 2005-06 (NFHS-3), to 2.2 in 2015-16 (NFHS-4), to 2 in 2019-21 (NFHS-5) thereby achieving its target number.The country has seen significant improvements in institutional births during this period from 39 per cent (2005-06) to 89 per cent (2019-21). A large proportion of the increase in institutional delivery has come from public facilities, having increased from 18 per cent in 2005-06 to 62 per cent in 2019-21.This demonstrates that public systems are delivering improved services, which has resulted in a decrease in Maternal Mortality Rate (MMR) from 212 in 2007-09 to 103 in 2017-19. A similar trend has been observed for Infant Mortality Rate (IMR), Under-five mortality rate (U5MR), and Neonatal mortality rate (NNMR).Source: NFHS-3 (2005-06), NFHS-4 (2015-16), NFHS-5 (2019-21). Available online at: http://rchiips.org/nfhs/index.shtml.EducationA measure of progress made in public school education is the change in Net Enrolment Rate (NER). The NER indicates the number of children of official school age who are enrolled in that school-level as a percentage of the total children of the official school age population.At the secondary level (Grades 9 and 10), the NER has consistently increased from 44 per cent in FY 2012-13 to 48% in FY 2021-22. Contrary to the NER in 2021-22, the Gross Enrolment Ratio (GER) in the same year stood at 80%. This implies that a high proportion of students enrolled in secondary level are enrolled in a learning grade that is different to their age.The period has also seen significant improvements in school infrastructure in government and government-aided schools such as that of toilets, drinking water connections and computer equipment. The percentage of schools with functional toilets has seen a drastic increase from 68% in FY 2012-13 to 96% in FY 2021-22. Similarly, the percentage of schools with functional drinking water rose from 79% in FY 2012-13 to 96% in FY 2021-22.Source: Unified District Information System for Education Plus (UDISE+). Available online at: https://udiseplus.gov.in/#/home.EmploymentAs per the Periodic Labour Force Survey (PLFS), in 2020-21, the labour force participation rate (LFPR) in usual status (principal status and subsidiary status ) for persons of age 15 years and above in India was 54.9%.In the past 15 years, unemployment in India has significantly increased. Consolidated data from NSSO Employment and Unemployment Survey Reports, NITI Aayog, Periodic Labour Force Survey (PLFS), and NSO, reveal that urban unemployment has consistently been more than rural unemployment in this time period.From 2009-10 to 2011-12, the urban and rural unemployment was stable, but this shot up drastically between 2011- 12 and 2018-19.Rural unemployment increased to 50 per thousand people in 2018-19 from 17 per thousand people in 2011-12, whereas urban unemployment increased to 77 per thousand people in 2018-19 from 34 per thousand people in 2011-12.Segregated by gender and area, women faced more unemployment in both rural and urban areas. In 2018-19, women in urban areas faced the highest unemployment (99 per thousand people). While unemployment faced by urban women decreased from 2009-10 (57 per thousand people) to 2011-12 (52 per thousand people), unemployment by men in both urban and rural areas and women in rural areas increased in the same period.Source: RBI Data, 2020. Available online at: https://rbi.org.in.InfrastructureIn the past 15 years, various schemes have been started and revamped to improve the state of social infrastructure in India. Particular focus has been on constructing roads, individual household latrines, pucca houses, and provisioning of piped water supply.Under PMGSY, roads completed have increased from 2.9 lakh kms in FY 2010-11 to 7.3 lakh kms in FY 2022-23. Similarly, the number of individual household latrines have increased from 122.4 lakh under Nirmal Bharat Abhiyan in FY 2010-11 to 1,560.6 lakh in FY 2022-23, under SBM-G.The number of houses constructed in rural India also shot up from 11.9 lakh under Indira Awaas Yojana in FY 2014-15, to 32.3 lakh under PMAY-G in FY 2022-23. The number of households having piped water supply also increased from 219 lakh in FY 2014-15 under NRDWP to 930.4 lakh in FY 2022-23 under JJM.Source: Scheme Management Information Systems.Welfare scheme monitoring and transparencyThe Right to Information Act, 2005 under Section 4(1)(b) calls for the proactive disclosure of information including budgets allocated, plans, proposed expenditures, reports of disbursements made and details of citizens availing the programmes. Over the last 15 years, we have seen significant transitions in government Management Information Systems (MISs). The improvements in technology has led to the creation of several dynamic dashboards, providing real time information on key indicators, but pertinent challenges remain. This section provides a snapshot of some of the changes with respect to the availability of financial data across some schemes.Timeliness, granularity and accessibility are three measures of unpacking how efficient an open data MIS is. An MIS is considered timely if it publishes data in real-time. Further, granularity helps us understand the disaggregation of the data across different tiers of the government. Lastly, accessibility helps us understand whether the data can be accessed offline through downloads in convenient formats such as PDF or Excel files. In the visual below, we have characterised the MIS of various schemes as red if the scheme performs poorly on the three metrics mentioned above and green if it performs well.MGNREGS has been a frontrunner when it comes to publicly available disaggregated, real-time data on their portal since FY 2009-10. The portal provides detailed information right from FY 2014-15 at the Gram Panchayat – and at times – at the worker level on payments and financial progress, work progress, physical progress, work demand patterns, social audit, among others. Schemes such as MGNREGS follow detailed guidelines and rules that support collecting and disclosing data on different aspects.Some recent flagship schemes also follow suit. For example, PMAY-G and PMJAY provide open data on various Key Performance Indicators (KPIs) such as state-wise allocations and approved budgets, release of GoI share of funds and component-wise allocations within the schemes. These schemes have observed an increase in information that is proactively disclosed on the MIS in FY 2022-23. The data published are convenient to use as they come with graphic representations at different levels of disaggregation. These platforms allow for customised analysis by integrating various data sources. MGNREGS, PMAY-G and JJM also provide an index of all data that are available on the platform.In addition to KPIs, JJM also publishes information on sub-missions such as providing Piped Water Supply (PWS) in schools and Anganwadi Centres or the recent uptake of monitoring scheme progress using technology driven by Internet of Things (IoT). However, despite these additions, information on JJM is only provided for GoI releases and expenditures and information on state shares remain unavailable.This report was originally published on the Centre for Policy Research website.
