Answer

Article 41 of the Indian Constitution mandates the government to ensure social welfare. The 1991 economic reforms catalysed rapid growth but also introduced a significant challenge of ensuring equitable distribution of economic benefits. Public expenditure on social services stands at 7.8% in 2023-24.

Pattern and Trend of Public Expenditure on Social Services in the Post-Reforms Period:

• Shift from Subsidies to Direct Welfare Programs: After the economic reforms of 1991, there has been a gradual shift from indirect subsidies (like food, fuel) towards direct welfare programs.
• For instance: Initiatives like Pradhan Mantri Awas Yojana (housing) and Ayushman Bharat (healthcare) reflect a focused approach to improving social infrastructure rather than broad subsidy-driven programs.
• Increased Expenditure on Education and Health: Public expenditure on education and healthcare has increased in response to the need for improving human capital.
• For example: In 2023-24, education allocation increased to ₹1.12 lakh crore, while health spending rose by 13% to ₹89,155 crore, addressing gaps in public health infrastructure highlighted by the pandemic.
• Decentralisation of Social Spending: Funding for social services is increasingly decentralised, with state governments taking on greater responsibility. The 14th and 15th Finance Commissions raised states’ tax revenue share, allowing for better regional resource allocation, despite ongoing disparities.
• Focus on Targeted Welfare Schemes: Targeted welfare programs like MGNREGA, PM Jan Dhan Yojana, and PM-KISAN focus on rural development and poverty alleviation, aligning with the government’s inclusive growth strategy to support marginalised and economically weaker sections.
• Focus on Poverty Alleviation and Rural Development: The focus has shifted to targeted poverty alleviation programs supporting rural employment and income security, with increasing budget allocations reflecting prioritisation of the rural economy and lower-income groups.
• Recent trend: A notable trend in public expenditure is the rise of cash transfer programs like Ladli Behna Yojana, which provide direct financial aid to economically disadvantaged women, enhancing empowerment, promoting financial inclusion, and streamlining welfare delivery.

Public Expenditure and Its Alignment with Inclusive Growth

In Consonance with Inclusive Growth:

• Increased Expenditure on Education: Increased funding for education has improved school attendance, particularly through schemes targeting marginalised communities.
  For example: The literacy rate rose from 20% in 1991 to 77.7% by 2021, reflecting improved access to education through schemes like Sarva Shiksha Abhiyan.
• Improved Healthcare Access: Health programs have significantly increased access to healthcare for marginalised populations, reducing inequality in service delivery.
  For example: Ayushman Bharat provided health coverage to over 120 million families by 2022, reducing out-of-pocket healthcare expenses by 21%.
• Social Security through NFSA: The National Food Security Act provides subsidised food grains to about two-thirds of India’s population, ensuring food security for the most vulnerable.
  For example: Since 2013, NFSA has provided 5 kg of grains per person per month to 800 million people, helping to reduce hunger and malnutrition.
• Right to Information (RTI): The RTI Act (2005) empowered citizens to demand transparency in the use of public funds, improving accountability in social spending.
• Employment and Livelihood Security (MGNREGA): MGNREGA spending consistently increased, reaching ₹1.11 lakh crore in 2020-21, providing employment security during the pandemic.

Not in consonance with Inclusive Growth:

• Inadequate Healthcare Infrastructure: Despite increased spending, rural areas continue to face infrastructure and personnel shortages in healthcare.
• Disparities in Education Spending: While public spending on education has increased, quality and access disparities persist between urban and rural areas.
• Inefficient Subsidy Distribution: Despite the NFSA, inefficiencies and leakages in the Public Distribution System (PDS) continue to undermine food security..
  For instance: PDS in states like Chhattisgarh has seen improvements, but leakages remain prevalent in others.
• Regional Development Disparities: Increased public expenditure has not equitably benefited all states, with poorer states lagging behind in key social indicators.
  For example: Kerala’s infant mortality rate stands at 6 per 1,000 live births, compared to Bihar’s 32 per 1,000, despite similar health spending growth.
• Inefficient Fund Utilisation: Despite increasing allocations, fund utilisation rates remain low due to delays and poor governance, especially in health and education sectors.

Public expenditure on social services is essential for inclusive growth and sustainable development. While India has made progress, critical gaps remain. Enhanced governance, accountability, and equitable resource allocation are needed to bridge the service delivery divide. Only then can India meet its SDG targets and ensure prosperity for all sections of society.

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