Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent this has been in consonance with achieving the objective of Inclusive Growth? (2024, 10 Marks)

Q. Examine the pattern and trend of public expenditure on social services in the post-reforms period in India. To what extent has this been in consonance with achieving the objective of Inclusive Growth? (2024, 10 Marks)

Introduction

Public expenditure on social services in India has increased from about 5% of GDP in the early 1990s to around 8–9% of GDP in recent years, reflecting a growing policy focus on health, education, nutrition, housing and social protection in the post-reforms period.

1. Pattern and Trend of Public Expenditure on Social Services

• (a) Overall Trend – Gradual but Uneven Rise
  • 1990s: Low social spending due to fiscal consolidation.
  • Mid-2000s: Sharp rise with rights-based welfare (RTE, MGNREGA, NFSA).
  • Post-2014: Shift towards targeted, technology-driven welfare.
• (b) Education
  • Spending around 3–4% of GDP, below the 6% target.
  • Shift from access (SSA) to quality, digital learning and higher education (NEP 2020).
• (c) Health
  • Historically below 1.5% of GDP; moved toward ~2% after COVID-19.
  • Shift from curative to preventive and insurance-based care (Ayushman Bharat).
• (d) Nutrition & Social Security
  • Expansion of food security, maternity benefits, pensions.
  • Greater DBT usage improved delivery efficiency.
• (e) Housing, Water & Sanitation
  • Sharp rise after 2014 due to urbanisation and public health thrust.
• (f) Structural Shift in Spending
  • From blanket subsidies → targeted welfare and asset creation.
  • Digitisation reduced leakages and improved coverage.

2. Consonance with the Objective of Inclusive Growth

Positive Outcomes

• Expanded Access to Basic Services: Schooling, sanitation, housing and healthcare coverage widened.
• Poverty & Deprivation Reduction: Multidimensional poverty declined due to food security and health coverage.
• Financial & Social Inclusion: JAM-DBT strengthened last-mile welfare delivery.
• Gender & Vulnerable Group Inclusion: Nutrition, maternity and education spending improved outcomes.

Persistent Gaps

• Low Health & Education Spending: Still below global norms.
• Inter-State & Rural–Urban Disparities: Wide regional gaps reduce inclusiveness.
• Quality Deficit: Learning and public health outcomes lag behind spending rise.
• Informal Sector Exclusion: Social protection for migrants and informal workers remains weak.

Conclusion

India’s social expenditure trajectory broadly supports inclusive growth, but growth becomes truly inclusive only when the last citizen is empowered. Sustained investments in health, education and social protection, along with strong outcome monitoring, are essential to convert social spending into durable human development and equitable growth.

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