India’s Interim Budget 2024: What’s in It for Us?

Lacks Commitment to Education and Public Health

Newsreel Asia Insight #120
Feb. 2, 2024

India’s “interim” Union Budget for 2024-25, presented on Feb. 1, when analysed for its impact on the average citizen, particularly those from economically disadvantaged backgrounds, uncovers several problematic aspects in key sectors such as education and health.

The interim budget is a provisional financial plan for an election year, covering part-year government income and expenses to ensure uninterrupted operations. It funds essential expenses and might adjust taxes but defers significant policy shifts or new initiatives until post-election.

Let’s examine the allocation for education in this budget.

The overall allocation for education stands at 3.29% of the total budget, which is far below the 6% recommended by the government’s National Education Policy 2020 and the suggestions of education experts, as noted by an op-ed published by MoneyControl.

Further, a significant portion of the budget allocated to education, 1,206 billion rupees, is directed towards the PM-SHRI (Schools For Rising India) project, aimed at upgrading existing government schools.

One of the main criticisms of the PM-SHRI project is that it focuses on upgrading only a select number of schools. This may neglect the broader needs of the vast majority of government schools across the country that require basic improvements in infrastructure, resources and teaching quality. Further, there have been calls for more transparency regarding the implementation and outcomes of this project. Critics seek detailed information on how the funds are being used and the tangible results achieved in the upgraded schools. There is also a demand for accountability in terms of the project’s effectiveness in enhancing the quality of education.

Now, let’s take a look at the allocation for health.

The extension of Ayushman Bharat healthcare coverage – offering a health insurance cover of up to 500,000 rupees per family per year for hospitalisation expenses – to ASHA and Anganwadi workers was a key highlight. It appears to be a progressive step, which can enhance the welfare of frontline workers who are often from lower-income backgrounds. This move, implemented properly and fairly, will not only improve their health security but also acknowledge their contribution to society.

However, sespite the National Health Policy 2017’s goal of allocating at least 2.5 percent of GDP to health, the budget for health remains relatively unchanged. This stagnation is notable given that the central government’s contribution is only a third of the total public health spending in the country, the op-ed points out. The minimal increase from 830 billion rupees to 861billion rupees, with revised estimates even lower at 767 billion rupees, indicates a shortfall in commitment towards enhancing the health infrastructure and services, according to the op-ed.

The significant vacancies in government health facilities, as highlighted by the Rural Health Statistics report, underscore a critical gap in healthcare delivery. The vacancies range from health workers and assistants to doctors, both in rural and urban settings. This shortfall in personnel is alarming and suggests that even the allocated funds may not be fully utilised or effectively channelled towards improving health services.

Interestingly, the allocation for the AYUSH Ministry, which promotes traditional and alternative medicine systems, was increased by 23.74%.

The budget says that the money people pay as taxes won’t change, but the government plans to spend 11% more money on big projects like building roads, schools, and hospitals. This kind of spending is called capital expenditure. Further, the government aims to reduce its fiscal deficit to 5.1% of the GDP. Fiscal deficit is when the government spends more money than it earns. This is a drop from last year’s 5.8%.

This situation makes us think about whether trying to reduce the deficit, while still spending more on big projects without increasing taxes, might be impacting services like education and healthcare.