The annual budget of the Union Government sets the direction of development policy for the next year for all sectors with a detailed breakdown of revenue and expenditure figures and the socio-economic framework of the country. It provides the details of annual income and expenditure. From this point of view, the budget is quite important for the overall development of the country, the development of backward communities, and the social sector.
The budget expenditure is divided into three parts or sectors in the government budget. The first sector is known as the general sector, the second sector as the economic sector, and the third sector as the social sector. Under the social sector, the budget is spent on education, health, social security, and the development of women, children, disabled people, Dalits, Adivasis, and minorities.
In the last budget, a total of Rs.48 lakh crore was allocated for the Union Government. This is an increase of about 7% from the previous budget. However, there was not much increase in the budget on social sector development. In the last budget, there was less focus on the schemes related to elderly people, children, women, Dalits, Adivasis, disability, and minorities. In the budget, there was more focus on physical infrastructure and capital expenditure.
At present, the large size of the world’s poorest people lives in India. The education and health sectors are also lagging behind compared to other countries. India ranks 134th among 193 countries in the Human Development Index. Therefore, the government should pay more attention to the education, health, and employment sectors and schemes in the budget. Government spending on social security, health, and education is much lower in terms of India’s GDP than many countries. Ideally 6% of GDP should be spent on education and 3% on health. While the current spending is around 3% on education and 1.5% on health.
In thelast budget, only 60 thousand crore rupees was earmarked for Employment Scheme MGNREGA
but the budget was not allocated as per the need.There was a need to run a new scheme in the budget on the pattern of MGNREGA in urban areas. So that the problem of unemployment in urban areas is eliminated. It is generally seen that despite budgetary allocation, people are not able to take full advantage of the schemes due to weak implementation.
The primary responsibility of ensuring better health services and facilities lies with the state governments/UT administrations. In the Union Budget 2024-25, Rs.98,461 crore was allocated for the health sector. This was an increase of 2.6 percent from the 2023-24 budget. This increase was mainly due to the increase in the budget of the Ministry of AYUSH. The budget was increased by 20%. In the 2024-25 budget, the allocation for the Ministry of Health and Family Welfare was increased by only 3%.
More attention was given to the budget of AYUSH along with the national health system. And the allocated budget of the National Ayush Mission was substantially increased. As per the National Health Policy 2017 and the recommendations of the 15th Finance Commission, the total public expenditure on health should reach 2.5 percent of GDP by 2025. But an analysis of the past years shows that the Centre’s health budget has remained stagnant as a percentage of the total Union Budget. In 2024, the share of the Union Budget as a percentage of GDP was 0.29 percent. However, in the case of states, there has been a gradual increase in the health sector budget as a percentage of GDP in 2024-25. In 2024-25, the Central and State Governments have budgeted less than 2% of GDP for health.
Education is an important part of social service. India’s school education system includes 15 lakh schools, 26.5 crore students, and 95 lakh teachers. At the higher education level, there are about 43,796 colleges, 1,113 universities, and 11,296 institutes of studies, with 15.5 lakh faculty members and 4.14 crore students. Out of the total allocation of Rs. 1,20,628 crore to the Ministry of Education, 61% was for the Department of School Education and Literacy and 39% for the Department of Higher Education. Allocations to both sectors increased by 8%. According to education budget expert Dr.Prativa Kundu, the overall share of education in the total Union Budget has seen a decline compared to pre-Covid years. While the demand for 6% of GDP as total public expenditure on education (combined education budget of Centre and States) has been repeated many times in every policy document, including the National Education Policy 2020 (NEP). The budgetary contribution of the Ministry of Education is equal to 0.37 percent of GDP.
Research by CBGA New Delhi shows that an analysis of the total budget of education expenditure of all 30 states shows a positive trend as a share of the country’s GDP, but overall government expenditure on education is not adequate to achieve the target of the National Education Policy.
According to the National Achievement Survey (NAS) 2021, there has been a gradual decline in the learning outcomes of students across almost all subjects and grades. Similarly, the Educational Survey Report shows that there has been a sharp decline in the level of core competence of children. Percentage of Class 3 children in government or private schools who can study at Class 2 level. It declined from 27.3 percent in 2018 to 20.5 percent in 2022.
To achieve a 100% Gross Enrolment Ratio (GER) by 2030, 3.22 crore children in the age group of 6-17 years will be brought back to school. To improve the quality of education, the student-teacher ratio should be 30:1 as prescribed in the RTE Act, 2009. Therefore, the partnership of the Central and State governments is essential to promote quality education as instructed by India’s school education system.
It is expected from the upcoming budget that the central and state governments will work together to increase public investment in the field of education so that this investment reaches 6% of the total GDP or 20% of the budgeted expenditure.
Therefore, in this budget, the government should have paid more attention to the education sector and welfare schemes. Government spending on education is much lower in terms of GDP than many other poor countries. More than 6% of GDP should be spent on education, while the current expenditure on education could not increase more than 3%.
The budget analysis shows that due to low education and health spending in the country, quality of services in these areas have not been made available to all the people. And its negative impact is more on the poor people and backward classes like Dalits, Adivasis, disabled, children, women, and minorities, and due to this, the country is deprived of producing better human resources. And it will be difficult to meet the target of making India a developed India by 2047.
[The writer is a development economist and associated with the Institute of Policy Studies and Advocacy (IPSA), New Delhi ([email protected])]