Why in the News?

Budget 2024 maintains the same approach as previous years regarding social sector allocations.

Decreasing allocations in the Budget for social sector schemes

Education Sector: The allocations for school education increased by ₹5,000 crore and for higher education by ₹3,000 crore. The increased recoveries from fees and self-financing schemes suggest a shift towards cost recovery in educational institutions.

Health Sector: The allocation for the Department of Health and Family Welfare rose by only ₹1,500 crore.

- Food Subsidy: There is a limited increase in food subsidies despite rising economic costs and the need to update coverage based on the latest population figures.

Shift in Approach: The government giving greater emphasis on cost-effectiveness and privatization in education and health, shifting focus towards contributory schemes like the Atal Pension Yojana.

- - POSHAN Scheme: There is a slight increase from ₹11,600 crore to ₹12,467 crore, but still less than the actual expenditure in 2022-23.
  - Saksham Anganwadi Scheme: The allocation increased to ₹21,200 crore from ₹20,554 crore, but no increase in salaries for Anganwadi workers or honorarium for mid-day meal cooks.

- - Samarthya Scheme: The budget reduced to ₹2,517 crore from ₹2,582 crore. The PMMVY scheme’s maternity benefits have remained unchanged since 2017.
  - NSAP: Allocation for social security pensions remains unchanged at ₹9,652 crore, reducing real coverage and value.

- - The ‘Prime Minister’s Package for Employment and Skilling’ includes government-sponsored internships, formalization of jobs through incentives for EPFO enrolments, and skill-development programmes
  - An allocation of ₹2 lakh crore over five years for the employment package, linked to industry response

- The PM SVANidhi Scheme (PM Street Vendor’s AtmaNirbhar Nidhi) aims to benefit over 50 Lakh street vendors across India
- All lending institutions, including NBFCs, are participating in the scheme to provide affordable loans to street vendors

Stagnant Wages and Dampened Demand: The Indian economy faces significant challenges with stagnant wages, which affect consumer demand. This stagnation can hinder overall economic growth and employment generation.
Reliance on the Private Sector for Job Creation: The government is increasingly looking to the private sector to address employment challenges.
- Initiatives like the ‘Prime Minister’s Package for Employment and Skilling’ aim to incentivize private sector job creation through government-sponsored internships and skill development programs.
Limited Budgetary Allocations: The budgetary allocations for employment-related schemes are limited, with the entire employment package amounting to ₹2 lakh crore over five years.
Focus on Supply-Side Solutions: The current approach emphasizes supply-side measures to incentivize the private sector rather than addressing the underlying demand-side issues, such as low consumer spending and economic uncertainty.

Enhance Social Sector Investments: The government should significantly increase budget allocations for critical social sector schemes, particularly in education, health, and social protection.
Comprehensive Employment Strategy: Need to develop a holistic approach to employment that addresses both supply and demand-side issues.