Combined Social Sector Expenditure by Centre and States as Per Cent of GDP has Increased in 2020-21 Compared to Previous Year

Slew of Measures Announced by Government to Ensure Economic and Social Protection to Vulnerable Sections During Pandemic

The Economic Survey 2020-21 states that the combined (Centre and States) social sector expenditure as per cent of GDP has increased in 2020-21 compared to last year. The expenditure on social services (education, health and other social sectors) by Centre and States combined as a proportion of GDP increased from 7.5% in 2019-20 (RE) to 8.8% in 2020-21 (BE). The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Economic Survey 2020-21 in Parliament today.

The Government took a slew of measures to deal with the situation arising out of the COVID-19 pandemic. The government announced the first relief package of ₹ 1.70 lakh crores under Pradhan Mantri Garib Kalyan Yojana (PMGKY) in March 2020 and a comprehensive stimulus cum relief package of ₹ 20 lakh crore under Atma Nirbhar Bharat Abhiyan in May 2020. Development and welfare schemes being implemented by the Government over the years together with these relief measures enabled the country to endure the impact of the COVID-19 pandemic and led to a V-shaped economic recovery.

According to the Survey, India’s rank in HDI 2019 was recorded 131 compared to 129 in 2018, out of a total 189 countries. By looking at the sub-component wise performance of HDI indicators, India's "GNI per capita (2017 PPP $)" has increased from US$ 6,427 in 2018 to US$ 6,681 in 2019, and "life expectancy at birth" has improved from 69.4 to 69.7 years respectively.

Online schooling took off in a big way during the COVID-19 pandemic. The access to data network, electronic devices such as computer, laptop, smart phone etc. gained in importance due to online learning and remote working. Innovative measures were adopted to bring all strata of the society under the medium of online/digital schooling, says the Economic Survey.

The Survey observes that year 2018-19 was witnessed as a good year for employment generation. About 1.64 crore additional employment was created during this period consisting of about 1.22 crore in rural area and 0.42 crore in urban area. Female LFPR increased to 18.6 per cent in 2018-19 from 17.6 per cent in 2017-18.

The Survey describes that the Government has given incentive to boost employment under the scheme Atmanirbhar Bharat Rojgar Yojana. Existing Central labour laws have been rationalized and simplified into four Labour Codes viz. (i) the Code on Wages, 2019, (ii) the Industrial Relations Code, 2020, (iii) the Occupational Safety, Health and Working Conditions Code, 2020 and (iv) the Code on Social Security, 2020 to bring these laws in tune with the changing labour market trends.

The net payroll data of Employees' Provident Fund Organisation (EPFO) as on 20th December, 2020 shows a net increase of new subscribers in EPFO of 78.58 lakhs in 2019-20 as compared to 61.1 lakhs in 2018-19.The quarterly PLFS, which covers the urban areas, shows improvements in the employment situation in Q4-2020 when compared to Q4-2019.

It mentions that Time Use Survey, 2019 showed females spending disproportionately large time on unpaid domestic and caregiving services to household members compared to their male counterparts. This explains the reason for the relatively low level of female LFPR in India. There is a need to promote non-discriminatory practices at the workplace like pay and career progression, improve work incentives, including other medical and social security benefits for female workers, the Survey recommends.

In the health sector, strengthening of health infrastructure and efficiency in health care delivery was reflected in the outcomes of NFHS-5 with infant mortality rate and under-five mortality rate showing a decline in most of the selected States in NFHS-5 as compared to NFHS-4. This reduction resulted from the roll out of the Pradhan Mantri Jan Aushadhi Yojana under Ayushman Bharat.

The Survey notes that due to COVID-19, allocation for the health sector has flowed towards special requirements in the fight against the pandemic. The initial measures of lockdown, social distancing, travel advisories, practicing hand wash, wearing masks reduced the spread of the disease. The country also acquired self-reliance in essential medicines, hand sanitizers, protective equipment including masks, PPE Kits, ventilators, COVID-19 testing and treatment facilities. The world’s largest COVID-19 immunization program commenced on 16^th January, 2021 through two indigenously manufactured vaccines.

It says that under PMGKY announced in March, 2020 cash transfers of upto ₹ 1000 in two instalments of ₹ 500 each were paid to existing old aged, widowed and disabled beneficiaries under the National Social Assistance Programme (NSAP). An amount of ₹ 2814.50 crore was released to 2.82 crore NSAP beneficiaries. An amount of ₹ 500 each was transferred for three months digitally into bank accounts of the women beneficiaries in PM Jan Dhan Yojana, totalling about 20.64 crores. Free distribution of gas cylinders to about 8 crore families for three months was also undertaken. Limit of collateral free lending for 63 lakh women SHGs increased from ₹ 10 lakhs to ₹ 20 lakhs which would support 6.85 crore households.

The Survey says that a total of 311.92 crore person-days were generated and a total of 65.09 lakh individual beneficiary works and 3.28 lakh water conversation related works were completed as on 21^st January 2021 during 2020-21. Wages under Mahatma Gandhi NREGA were increased by ₹ 20 from ₹ 182 to ₹ 202 w.e.f. 1^st April, 2020, which would provide an additional amount of ₹ 2000 annually to a worker.

Social sector expenditure rise signals increased combined central state spending as percentage of GDP to support pandemic relief measures. Combined social sector expenditure by the Centre and States increased as a share of GDP in 2020-21, driven by pandemic relief and stimulus measures that augmented spending on education, health and other social services. The Survey ties this fiscal reallocation to direct cash transfers, expanded in kind support and credit measures for vulnerable groups, alongside strengthened health infrastructure, immunisation rollout, labour code consolidation, employment incentives and expanded rural employment outlays.