Daily Answer Writing Programme :25 Sep 2024: 1. 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?

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?  upsc mains 2024- GS 3

Model Answer:

The Post-reform India  (1991) has witnessed a notable increase in public expenditure on social services. This trend is evident across various sectors, including education, healthcare, and social security.

• As a percentage of GDP, expenditure on social services has risen from 6.7% in 2017-18 to 7.8% in 2023-24
• The overall social welfare expenditure has grown at a Compound Annual Growth Rate (CAGR) of 12.8%, with health expenditure exhibiting an even more impressive CAGR of 15.8%.
• health expenditure has increased from 1.4% to 1.9% in the same period. This trend demonstrates a growing commitment to social sector development.

Inclusive Growth and Public Expenditure:

• The increased public expenditure on social services has been largely in line with the objective of inclusive growth.
• The government’s emphasis on expanding the Jan Dhan-Aadhaar-Mobile (JAM) Trinity, financial inclusion, direct benefit transfers (DBT), and infrastructure development in health, education, and rural areas has targeted income inequality and improved access to essential services.
• Health Expenditure and Inclusive Growth: Post-pandemic, the government’s Pradhan Mantri Jan Arogya Yojana (PMJAY) expanded healthcare access to millions of households, particularly in rural and underserved areas. This contributes to inclusive growth by reducing healthcare-related poverty.

Education and Skill Development: Government investment in digital education, infrastructure, and skills development programs, such as the PM Kaushal Vikas Yojana, has the potential to drive long-term inclusive growth by improving human capital and addressing youth unemployment.

4. Challenges and Shortcomings:

• Resource Constraints:
• Implementation Issues:
• Regional Disparities:.

Way Forward:

Focus on Efficiency: improving the efficiency of public spending on social services, along with leveraging technology for better service delivery, can have a multiplier effect on achieving inclusive growth.

Enhancing Social Infrastructure: Increased investment in health, education, and social protection is essential to empower the labor force and create a more productive economy.

Sustainable Public Finances: While there is a need for enhanced spending on social services, it must be balanced with sustainable public finances to avoid fiscal stress that could undermine long-term growth.

Conclusion:

The post-reform period has witnessed a positive trend in public expenditure on social services, achieving inclusive growth requires a multifaceted approach that addresses both spending levels and the effectiveness of social sector interventions.