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The Big Picture – Budget 2015: Implications for Social Sector

Summary:

There is a general feeling that under the Budget the allocations made to the social sector coming under various ministries have been inadequate and even much less than the allocations made last year. The centre has however defended its move by saying that higher devolution of tax revenues to the states as suggested by the 14th finance commission would fill the gap. But, the critics say that even such higher devolution would not solve the problem. States spend 95% of their collections on salaries and other expenditures. The net additional resources transferred to the States, including States’ share of taxes and duties, non-Plan grants and loans, Central assistance to State plans, assistance for Central and Centrally-sponsored schemes, is only Rs.64,000 crore in 2015-16.

It is also true that 95% of the budget comes with a Preset because of the commitments like salaries, defence expenditure, interest repayments etc. Hence, unless a directional change is made, the centre is left out with very little resources. The present government had some advantages created because of fall in the prices of crude oil.  To some extent the government has resisted the temptation on being Populist. Some initiatives like MUDRA bank are widely welcomed.

The Budget is strong on the social sector side as it moves from Jan Dhan to Jan Suraksha and a functional social security system for all Indians. There is a 22% reduction in allocation for Sarva Shiksha Abhiyan (SSA) over last year. The trend of lower allocation is in line with the near universal enrolment achieved at primary level. However, the increased focus on enhancing quality of education to address the poor learning levels of students is not evident from the allocations.

There is a 22% reduction in allocation for Sarva Shiksha Abhiyan (SSA) over last year. The trend of lower allocation is in line with the near universal enrollment achieved at primary level. However, the increased focus on enhancing quality of education to address the poor learning levels of students is not evident from the allocations. Even the Health sector has not received much attention.

 

 

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