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The Big Picture – One year of NDA Govt: How the social sector has fared?

The Big Picture – One year of NDA Govt: How the social sector has fared?



The NDA government has completed one year in office. The social sector has seen significant increase in the budgetary allocations in the last decade and also increased spending. This sector has been one of the key areas to ensure equity and social justice and opportunities for the underclass. It has been under much discussion. The cuts in social sector spending by the NDA in the last one year has come in for criticism. However, the government has been pointing out that with the increase in central allocations for the states, following the recommendations of the Finance Commission, these shortfalls can be met.

Some experts say that the reduction in the overall expenditure mainly affect the centrally sponsored schemes. The NDA government is also being projected as an anti-poor and anti-worker dispensation. It is also being said that heavy cuts in the social sector expenditure is pinching the common man on ground. It may affect healthcare services in many states and schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)scheme would also be affected.

The Centre’s assistance to the states for social sector schemes has comedown from a budgeted Rs 3.56 lakh crore in last financial year to Rs2.20 lakh crore in the current financial year (2015-16). Defending such cuts, the NDA government says that they have changed the funding pattern to the states and increased tax revenues from 32% to 42%,giving them freedom to choose schemes and programmes. Effectively, while the central government gave Rs 1.42 lakh crore additionally to the states from the divisible tax pool, it has cut back Rs 1.16 lakh under central government schemes. The states will now have to use their funds to keep their social sector schemes going the way it is. While states will have additional funds at their disposal out of the tax pool share, the Centre will have no say in how the states spend it.

Further,for providing maternity benefits, the Indira Gandhi Matritva Sahyog Yojana (IGMSY) scheme was launched as a pilot in 2011 in 53 districts with budgetary support of Rs 396 crore this year. The Centre has now told states it will be expanded in a phased manner over three years if funds are available. Only Rs 36 crore of additional funds have been made available for 2015-16. The programme would cost Rs 15,000 crore. The government has also stopped funding for eight schemes worth Rs. 10,000 crore including National e-Governance Plan and Rajiv Gandhi Panchayat Sashaktikaran Abhiyaan(RGPSA).


Allocations to Rashtriya Krishi Vikas Yojna, Animal Husbandry and Dairy Vikas, Pradhan Mantri Krishi Sinchai Yojna, Nationa lLivelihood Mission and Integrated Child Development Scheme have been reduced. The Centre has also asked the states to bear a larger share of spending in 24 schemes, including the government’s flagship Smart City Projects. Similarly food security programmes aimed at 67% of the country’s population, will also be affected.

With social-sector spending as a percentage of the gross domestic product (GDP) falling to its lowest levels since 2010, it is high time the government made good on its election promises of greater attention to this sector. In its election manifesto, the BJP had said that public spending on education would be raised to 6% of the GDP. That is a far cry from the current number—less than 3% of GDP, including food subsidies. The recent launch of three social security schemes—the Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Yojana and Atal Pension Yojana—that seek to provide accidental death and disability risk cover, life insurance and contributory pension is a major step towards increasing social security.