Mizoram, Bihar, J&K, Jharkhand among states with an increase in health and education sector expenditures
India’s states have largely jacked up their expenditure in the social sector, such as health and education, as compared to physical infrastructure, like power and roads, a paper brought out by NITI Aayog said.
The paper, aimed at examining if states, have curtailed their social sector expenditure in response to increased untied transfers from the Centre, has analysed budget and expenditure details of states for the financial years 2014-15 and 2015-16.
It says that while all states have registered a positive change in their absolute social sector expenditure (calculated against total expenditure), only Manipur, Andhra Pradesh and Tamil Nadu have seen have seen a negative growth in social sector expenditure in terms of gross state domestic product (GSDP).
The paper further states that Mizoram and Jammu & Kashmir have seen the highest increase in expenditure in the health and education sectors, respectively, among north-eastern and Himalayan states.
It also states that Bihar and Jharkhand, among the major states, have seen the maximum increase in health and education sector expenditures, respectively. Both states' expenditures have been calculated as a percentage of the GSDP, and not the total expenditure.
The paper, drafted by NITI Aayog adviser Alok Kumar and other senior officials, says all states have witnessed steady increase in their social sector expenditures since 1990.
However, it emphasises that social sector expenditure by states in terms of their total expenditure has also gone up in 2015-16 from 2014-15, even after the government accepted the 14th Finance Commission’s (FFC) recommendation of a higher devolution to the states. States cumulatively spend about 6% to 7% of GDP on the social sector, whereas the Centre spends about 1 per cent to 2 per cent.
The paper quotes the latest World Bank data showing India spends 3.8 per cent of GDP on education and 1.4% of GDP on health, which is below the world average of 4.4% and 6%, respectively.
“Also, as per the Human Development Report, 2015, UNDP, India’s Human Development Rank is 130 and the following table shows the cross country public expenditure on education and health,” it states.
“It is noticeable that in respect of as many as 21 states, social sector expenditure has increased at a higher pace than the increase in their total expenditure,” the paper states.
Talking about the Central funds to states, the paper says, "About 21.19 per cent more resources were available to the states during FY 2015-16 by way of central transfers as compared to FY 2014-15.”
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