Indian constitution envisions a welfare state under Article 38 of the constitution which is reflected in public expenditure on social services. In the post-reforms period the public expenditure on social services increased from 5.49% of GDP in 1990-91 to 8.3% in 2021-22.

Patterns and trends of public expenditure on social services:

1. From 1990s to Early 2000s: Marked slowdown in public spending – 

1. Education – 3% of GDP. 
2. Public healthcare –  1% of GDP.

2. From 2000s to Early 2009: Marked by re-prioritization of social spending Eg- Sarva Shiksha Abhiyan (SSA) for education, National Health Mission (NHM), and MGNREGA.
3. 2010 onwards: Shift towards Rights based approach E.g., Right To Education, Right To Food, etc.

Consonance with achieving the objective of inclusive growth:

1. Rapid growth and poverty reduction:  A total of 415 million people moved out of poverty in India within just 15 years from 2005 to 2021. (UN)
2. Financial inclusion: Under PMJDY more than 53.13 crore bank accounts have been opened proving instrumental in Direct Benefit Transfer to the beneficiaries.
3. Education Accessibility: E.g. Gross Enrolment Ratio for girls at the secondary level rose from 77.45% in 2014-15 to 81.32% in 2019-20.
4. Improved Health Indicators: Health expenditure increases at cagr of 15.8%. (1.9% OF GDP IN FY24) – Life expectancy increased from 58 years in 1991 to 70 years in 2022.

However, Challenges remain in realizing the full extent:

1. High Levels of Poverty – NITI Aayog’s 2021 report estimated that around 25% of the population still lives in multidimensional poverty
2. Employment Generation and Jobless Growth – According to PLFS 2019-20, India’s unemployment rate was 4.8% and youth unemployment (15-29 years) was 22.9%.
3. Underinvestment in Social Infrastructure: According to a report by Dasra, social sector spending was ₹23 trillion ($280 billion) in FY23. It is less than NITI Aayog recommendation of 13% of GDP.
4. Regional Disparities in Development: As per ‘Relative Economic Performance of Indian States: 1960-61 to 2023-24’ by Economic Advisory Council to the Prime Minister (EAC-PM), 5 Southern states have emerged as major contributors to India’s GDP, accounting for 30% by March 2024. On the other hand, Uttar Pradesh contributes only 9.5% of GDP and Bihar just 4.3%. 
5. Social Exclusion and Inequality Based on Caste, Gender etc: According to NITI Aayog’s 2021 Multidimensional Poverty Index, SCs and STs suffer more from multidimensional poverty and Female labor force participation in India is only 23.3% (PLFS 2019-20)

World Economic Forum has suggested 3 practical ways for countries to boost inclusive growth:

1. Investment in their citizens’ capabilities. e.g. Bolsa Familia – Brazil, provides financial aid to brazilian families ensuring children education, vaccination etc.
2. Labour Law Reforms – ensuring social security cover
3. Investment in labor intensive economic sectors including sustainable water, energy, digital, and transport infrastructure, rural economy, education and training.

Implementing Social Security Code 2020 can help achieve goal of instituting a credible social protection framework, consistent with India’s level of development.