Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint

Budget 2016 and the social sector

While there has been an overall increase in social sector allocation, these are by no means significant

From the perspective of social policy in India, there is some cheer and many disappointments in Monday’s budget. The cheer comes from the fact that in a marked departure from the previous two budgets, this year’s budget speech began with a clear commitment to enhancing social spending and listing social sector—healthcare and education—high in the key priorities of this government. Thus it’s worth examining the budget fine print to see if it is indeed the case.

A quick look at the budget numbers presents an interesting story. While there has been an overall increase in social sector allocation, these are by no means significant—particularly for core social sector programmes.

Here is a quick look at the numbers: the Sarva Shiksha Abhiyan budget increased by 2% from 2015-16 (revised estimates) while the Mid-Day Meal scheme budget increased by 5%. The National Health Mission budget increased by 2%, while the Mahatma Gandhi National Rural Employment Guarantee Scheme, which according to the finance minister had received its highest allocation yet in this budget, increased by 4% from the previous years. Swachh Bharat Mission (SBM), the flagship programme on rural sanitation, saw one of the biggest jumps at 38%. However, this jump is in part due to lower revised estimates.

In 2015-16, the government had passed supplementary budgets, which had raised SBM allocations to more than 8,900 crore. If one was to take these supplementary budgets into account, the rise in SBM is modest at 1%.

In health, the big jumps in allocation are in health insurance—the old Rashtriya Swasthya Bima Yojana has been renamed and has received a 152% hike ( 900 crore). So, while there certainly have been some improvements in social sector spending, this budget is by no means a big bonanza for the social sector, at least in the way that the budget speech seems to have suggested.

But more than allocations, given that the emphasis on social sector expenditure has now shifted to the states, the real expectation from this budget was for some indication of the government’s social policy vision, particularly for the core areas of health and education. Here, the budget disappoints.

That this government is struggling to articulate a clear vision of social policy is evident from the hotch-potch of “schemes" that the ministry of finance pieced together in its post-budget publicity material. The ‘Vikas Ka Budget’ flyer on the new dynamic social sector included schemes like the LPG connection, the health insurance program, the Stand Up India scheme, the Jan Annusuddhi Yojana, but none of this can be pieced together into a coherent narrative for what the government envisaged for social policy in India.

On elementary education, like in previous years, the finance minister mentioned the government’s commitment to improve quality. However, there was nothing in his speech or in the fine print of his budgetary allocations that indicate any concrete steps that the government might be taking in this direction.

Equally on healthcare, the budget speech, while making a strong push for health insurance, remains silent on the government’s overall vision for health policy—insurance while important has many inherent limitations and cannot be the backbone of the government’s health policy.

In fact, the fine print of the budget seems to indicate that even the insurance scheme is no more than a renamed version of the Rashtriya Swasthya Bima Yojana. So, while social policy is back on the agenda, in the absence of a vision of change, this budget is no more than a reiteration of the status quo.

But even as the budget lacked a comprehensive narrative on social policy, it certainly made important shifts in the structural mechanism through which social sector programmes are to be delivered in the country and this is a very positive step.

Many commentators have picked up on the important decision in the budget to end the distinction between Plan and non-Plan expenditure. But an equally critical and far-reaching change is in the decision to adopt the NITI Aayog recommendation to streamline centrally sponsored schemes to 30, introduce a sunset clause and, above all, undertake an outcome review.

Of course, the devil lies in the detail. For the moment, the streamlining is limited to a mishmash re-assigning of old schemes, along with their budget lines to “umbrella schemes"—so, for instance, the National Education Mission comprises five other centrally sponsored schemes (CSS). But in accepting the principle of streamlining CSS and linking their review to outcomes, the budget has opened an important opportunity for the government to actively revamp the role of the central ministry in how it designs its own role in planning, monitoring and financing social sector programmes.

Here, lessons can be learnt from the efforts being made in the Swachh Bharat Mission, where the finance minister indicated that the centre will use its money to reward states on achieving the goal of ending open defecation.

Could this budget be the first step towards developing an outcome-based financing model for social policy in India? One can only hope.

Yamini Aiyar is a senior research fellow at the Centre for Policy Research and director of the Accountability Initiative.

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