12% increase in social sector schemes

Health and housing get one of the highest jump

In all, the total spend of the government on 28 core social sector schemes that impact the rural and social sector went up by 12.14 % from Rs 2.46 lakh crore  Re in FY16-17 to Rs 2.80 lakh crore budgeted for FY17-18. The health-related schemes enjoyed one of the highest increases in terms of allocations on the social front and the housing programme did on the rural front.

The Pradhan Mantri Gram Sadak Yojna for rural roads which has done relatively well (average per day construction was 114 kilometres against target of 133 kilometres) in the current year got the same allocation for next year pegged at Rs 19,000 crore. The rural and urban housing scheme saw a collective increase of Rs 8,026 crore even as the government scaled down expectations of the number of houses to be built owing to the extremely slow take off in FY16-17. The real estate industry though did get a boost with affordable housing being given the infrastructure status.

Using a composite index of development that has been touted for a while, the finance minister announced a Mission Antyodaya to bring 1 crore households out of poverty and make 50,000 gram panchayats poverty free by 2019. But, he claimed it would be done by efficient use implementation of existing schemes.

If the rural development component of the budget looked conservative, the social development components and the centrally sponsored schemes too look challenged by the fiscal maths, except for the health sector. On the face of it, the health ministry got a substantial 23.5% increase in budgetary allocation, over Rs 38,343.33 crore revised estimate for FY16-17 to Rs 47,352.51 in FY17-18. But the national urban health mission component remain stunted with meagre allocations. The government’s plan for up to Rs 1 lakh health insurance remained stuck in pipeline as the finance minister instead put extra money in to the rural health mission and medical education. Besides, he announced an Aadhaar-linked smart health card for the elderly.

The outgo on the enhanced maternity benefit scheme that the Prime Minister had announced on December 31 was contained by putting additional conditions on beneficiaries and the budgetary allocation was contained at Rs 2,700 crore, up from the Rs 634 crore spent on merely the curtailed pilot in FY16-17.

The education sector didn’t get as much extra support for the coming fiscal. The National Education Mission got Rs 29,555 crore against Rs 28,250 crore as per the revised estimate for FY16-17 and the two education departments collectively saw an 8% increase in their allocation. But on both health and education, by announcing schemes and programmes, the government showed indications of moving ahead without over arching national policies being finalised.

The rural component of Swachh Bharat Mission got an additional Rs 3,948 crore over last year’s RE of 12,800 crore but the urban component saw no increase and neither did the drinking water mission.

On the jobs front the finance minister announced that the Pradhan Mantri Kaushal Kendras (PMKK) would be increased ten-fold from 60 districts to 600 districts but the budgetary allocation was increased from only Rs 2,140 crore RE to Rs 2,924 for FY17-18.

Similarly, the government may have set a target for banks and NBFCs to double the loans classified as MUDRA from Rs 1.22 lakh crore in FY116-17 to Rs 2.44 lakh crore in FY2017-18 but it cut its own commitment to the scheme down from Rs 2,610 crore to Rs 2,013 crore and decided not to infuse additional equity in the MUDRA refinancing bank. It had put in Rs 900 crore in FY16-17.  

MNREGA maths

• The finance minister provided MNREGA Rs 48,000 crore for FY17-18
• That’s a meagre increase of Rs 500 crore over the revised estimate for FY16-17  of Rs 37,500 crore 
• The allocation of FY16-17 is set to be breached with arrears in January piling up to more than Rs 3,000 crore. The government accounts are maintained on cash basis and hide the arrears which are found in the rural development ministry’s data
• The Rs 500 crore will fail to compensate for the mandatory increase in the CPI-indexed wages and expected increase in material costs in the coming fiscal if the total employment provided is to be maintained at Fy16-17 levels. 
• Average cost per day of job has risen from Rs 202.6 in FY 15-16 to Rs 228.73 in FY116-17