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Social Sector in the 2019 Union Budget
The 2019 Union Budget has touched on all the components of the social sector in bits and pieces. However, the overall framework for the sector is not clear. Though a key initiative of the current government has been the increase in direct benefit transfers for welfare schemes, there is a need for increasing the state capacity, particularly of the poorer states, as the major social sector expenditures, mainly on health and education, are done by the states.
The first budget of the second tenure of the Narendra Modi government—presented by the Finance Minister, Nirmala Sitharaman on 5 July 2019—is set against the backdrop of the Bharatiya Janata Party’s (BJP) landslide victory in the 2019 general elections. The increased electoral strength comes with increased expectations of performance from the government, especially during a time when the economy, including the social sector, is facing multiple challenges.
The progress of the social sector has both intrinsic (for its own sake) and instrumental values for the economy, not only due to its own sake, but also for its contribution towards higher growth.1 India is committed to achieving the Sustainable Development Goals (SDGs) by 2030, for which social sector development is important. Progress in the social sector is also needed for accomplishing a $5 trillion economy by 2024. In this context, focus on the social sector spending and the efficiency in the delivery systems is essential. At the outset, note that the measures in the budget that improve the growth of the gross domestic product (GDP), and/or improve tax revenue collections, etc, can affect social sector spending and progress. For example, lower economic growth would lead to lower tax revenues and lower spending on the social sector. Given that, we will discuss the 2019 Union Budget proposals and policy issues for the social sector, including rural development, in this article.
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