Budget 2023 gives social sector a wide berth

Budget 2023 reveals the government continues to neglect the importance of basic services such as health and education in enabling and ensuring human development

Referring to the overarching objective of ‘India@100’, which maps the trajectory for the country’s development journey towards the centennial year, Finance Minister Nirmala Sitharaman presented the last Union Budget before the 2024 general elections. The focus of the Budget proposals is to enable a “technology-driven and knowledge-based economy with strong public finances, and a robust financial sector”. In her list of priorities, increasing investments in India’s health and education system remains absent.

The Ministry of Health and Family Welfare and AYUSH has been allotted Rs 92,802.5 crore. This is an increase of 13.2 per cent from the 2022-23 revised estimates. Yet, the Union Government spending on health is now only a meagre 2.06 per cent of the total Union Budget which is less than half per cent (0.35 per cent) of India’s GDP. It is important to note that the latest National Health Account (NHA) show that the share of Government Health Expenditure (GHE) in the GDP was a mere 1.3 per cent in FY 2019. It includes a higher share of the states (65.7 per cent) with the Union government contributing the remaining 34.3 per cent.

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This low expenditure manifests itself in poor health outcomes and leads to health inequalities among various economic and social groups. A recent study showed that the life expectancy at birth was 65.1 years for the poorest fifth of households in India as compared with 72.7 years for the richest fifth of households.[i]

Furthermore, India’s health infrastructure is abysmally poor. Only 31.5 per cent of hospitals and 16 per cent of hospital beds are situated in rural areas where 75 per cent of the population resides.[ii] In 2021, 21.8 per cent of the rural primary health centres did not have doctors, and 67.96 per cent of the CHCs were without specialist doctors.[iii]

The Ministry of Education has also received a small piece of the pie. It has been allocated Rs 1,12,899 crore. This is an increase of 13 per cent from FY 2022-23 but constitutes only 2.5 per cent of the Union Budget. This makes the Union government expenditure on education only 0.41 per cent of India’s GDP.

The overall Indian public expenditure on education (which includes the share of education expenditure by states) also remains abysmally low at 2.8 per cent of GDP, according to UNESCO estimates. The low government spending on the education sector is alarming when the gaps persistent in the sector is examined. Oxfam India’s Survival of the Richest: The India Story reports that the dropout rate of young children attending Classes 1 to 8 has almost doubled in 2021-22. The rates are higher for children from the marginalised section, especially at the secondary level of education. Ten million girls, too, are at risk of dropping out. Concerns also lie in the fact that more than half of the children between the ages of 14 and 17 are unable to access secondary education in India. Moreover, 19 per cent or 1.1 million teaching positions in schools lie vacant across India. Sixty-nine per cent of these vacancies are in rural areas.

Read | ‘Union health budget has positives, but more needs to be done’

The Budget has other surprising setbacks that are going to impact the poorest the most. The Mahatma Gandhi National Rural Employment Guarantee Act has received only Rs 60,000 crore for FY 2023-24, a 30 per cent decrease from FY 2022-23. During the last year, the scheme received an allocation of Rs 89,400 crore (RE). The food subsidy allocation under the National Food Security Act has been only Rs 1.97 lakh crore, which is a reduction of more than Rs 89,000 crore.

India is one of the most unequal countries in the world and houses the highest number of people living in poverty. Budget 2023, however, reveals that the government continues to neglect the importance of basic services such as health and education in enabling and ensuring human development and the significance that the government can play in guaranteeing daily subsistence. There is an urgent need to substantially increase public spending on the social sectors to prioritise the needs of the socio-economically marginalised groups, to enhance access to good quality education and health services irrespective of an individual’s ability to pay and ensure the adherence to the constitutional right to food and to employment.

(Amitabh Behar is Chief Executive Officer, Oxfam India)

Disclaimer: The views expressed are the author's own. They do not necessarily reflect the views of DH.