Budget 2019: Govt protects social sector spending from any cuts

Despite being hemmed in by expectations of substantial fall in tax revenues, compared to the interim budget estimates, the government ring-fenced its expenditure on the social sector from any substantial curtailment in the budget. The total expenditure on Centrally Sponsored Schemes, which pertain to the social sector, was pegged at Rs 3.31 trillion, only Rs 3,930 crores less than what was allocated in the interim budget.

The Central Sector Schemes, a good part of which also go towards social infrastructure and spending, saw only a minor shave of Rs 10,615 crore, with the budget pegging the total spend on this segment at Rs 8.7 trillion.

Looking at different slices of the social sector spending, allocations were marginally increased (as compared to the interim budget allocations) on all fronts – education, health, rural development, social welfare, and urban development.

Finance minister Nirmala Sitharaman did announce a slew of new policy measures on the education front but the budgetary support for the segment remained more or less the same as that planned in the interim budget. In the revised estimate of FY18-19 the government had spent Rs 83,626 crore on education, the interim budget had raised the allocation for current financial year to Rs 93,848 crore. This was enhanced by Rs 1,006 crore in the budget presented on Friday.

In one part the government was able to keep it social sector spend intact by more setting ambitious goals for disinvestment and partly by increasing its share in the tax revenues as compared to the share the states get from this central tax kitty under the finance commission devolution formula. Not all central taxes are shared with states through this route. An increase in the revenue from additional duties on fuels, which the Centre does not need to share with states, ensured that the Centre was able to protect its ability to spend on the social sector.

The finance minister, continued to lay emphasis on the three of its mega-schemes from its previous tenure, to provide subsidized LPG cylinders, houses and electricity to the poor. She committed that the government would continue to work towards last mile delivery of each of these to each intended beneficiary. The allocation for rural housing under Pradhan Mantri Awas Yojna (PMAY) though remained allocated nearly at the same levels spent in the last fiscal as per revised estimates. It was pegged at Rs 25,853 crore.

The rural roads programme, Pradhan Mantri Gram Sadak Yojna, which got a prominent mention in the finance minister’s speech as part of the government’s thrust to enhance investments in rural infrastructure, was allocated Rs 19,000 crore. This is Rs 4,500 crore against the revised estimates of expenditure in previous financial year but the same as the allocation in the interim budget.

Sector RE FY18-19 BE FY19-20*  BE FY19-20
83,626 93,848 94,854
Health 55,949 63,538 64,999
Rural Development 135,109 138,962 140,762
Social Welfare 46,492 49,337 50,850
Urban Development 42,965 48,032 48,032
* Interim figures; all values in Rs crore

Sector RE FY18-19 BE FY19-20*  BE FY19-20
Central Sector Schemes/Projects 736,795 860,179 870,794
Centrally Sponsored Schemes 304,849 327,679 331,609
* Interim figures; all values in Rs crore

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