Q1.Examine the pattern and trend of public expenditure on Social Services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of inclusive growth? (10M).
Kartavya Desk Staff
Introduction
Since the 1991 economic reforms, India’s public expenditure on social services has evolved to balance market-driven growth with inclusive development. The government has increasingly invested in education, health, and welfare schemes to promote equity and reduce inequalities.
Pattern and trend of public expenditure on social services
• Increased Overall Allocation-Public expenditure on social services rose from 5% of GDP in 2000-01 to 8.6% in 2021-22 (Economic Survey 2021-22).
E.g. Education allocation increased from ₹3.43 lakh crore (2014-15) to ₹6.07 lakh crore (2021-22).
• Focus on Health Sector- Government spending on health increased from 3% of GDP in 2017-18 to 2.1% in 2021-22.
E.g. Ayushman Bharat launched in 2018, covering over 50 crore people (Budget 2022-23).
• Targeted Welfare Schemes- Post-reforms, the government shifted to targeted schemes for vulnerable sections.
E.g. PM Awas Yojana (PMAY) provided 1.14 crore rural houses by 2022 (NITI Aayog).
• Rise of Centrally Sponsored Schemes- Centrally sponsored schemes like Swachh Bharat Mission (SBM) have been a priority since 2014.
E.g. SBM achieved 100% rural sanitation coverage by 2019.
• Social Security Spending- Increased focus on social security schemes like pensions and insurance.
E.g. PM Jan Dhan Yojana opened over 47 crore bank accounts as of 2022 (PMJDY Dashboard).
Extent of alignment with inclusive growth
Aligned with inclusive growth
• Poverty Reduction-Targeted welfare schemes have significantly reduced poverty levels.
E.g. 271 million people lifted out of poverty from 2006-16 (UNDP).
• Health Access for the Poor Schemes like Ayushman Bharat have improved healthcare access for economically weaker sections.
Schemes like Ayushman Bharat have improved healthcare access for economically weaker sections.
E.g. 3.26 crore hospital admissions by 2022 (NHA Data).
• Rural Employment and Livelihood Security-Programs like MGNREGA provide rural employment, ensuring income security.
E.g. 390 crore person-days of work created in 2021-22 (MoRD).
• Women Empowerment- Women-centric programs like PM Ujjwala Yojana enhance social inclusivity.
E.g. Over 9 crore LPG connections provided to women by 2022 (Budget 2022).
• Balanced Regional Development- Focus on backward regions through initiatives like the Aspirational Districts Programme promotes regional equity.
E.g. Improved socio-economic indicators in 112 backward districts (NITI Aayog).
Not aligned with inclusive growth
• Skewed Urban-Rural Distribution- Social spending often favors urban areas, leaving rural regions underfunded.
E.g. Urban healthcare infrastructure receives more funding than rural health services (Economic Survey 2021-22).
• Inadequate Education Outcomes-Despite increased education funding, quality in public schools remains low.
E.g. ASER 2020 shows low learning levels in rural areas despite rising allocations.
• Underperformance of Health Infrastructure-Public healthcare infrastructure remains overburdened, especially in rural areas.
E.g. India has only 1.4 hospital beds per 1,000 people, below the global average (NHP, 2020).
• Leakages in Welfare Schemes-Corruption and leakages reduce the effectiveness of social schemes.
E.g. PDS leakages still account for significant food grain diversion (NITI Aayog).
• Neglect of Social Security for Informal Workers-A large section of informal workers remains outside formal social security programs.
E.g. Only 20% of India’s labor force has formal social security (ILO, 2020).
Conclusion
While public expenditure on social services has contributed to poverty reduction, healthcare access, and women’s empowerment, challenges like urban-rural disparities, weak healthcare infrastructure, and welfare leakages hinder complete alignment with inclusive growth. Strengthening implementation and governance will be key to achieving more balanced development.