WELFARE SPENDING &
BUDGET IN INDIA
Introduction
Welfare Spending includes spending on a range of things, such as looked-after children and long-term
care for the elderly, the sick, and disabled. Unlike other elements of "social protection" it is not a cash
transfer payment and in many ways has more in common with spending on health than spending on
social security benefits.
Social security and welfare government revenue expenditure India 1990-2018. The budget estimates of
revenue expenditure on social security and welfare of India's central and state governments amounted
to more than 1.6 trillion Indian rupees.
In the last 16 years, the allocation to the Department of Health and Family Welfare has increased from
Rs 11,366 crore in 2006-07 (revised estimate) to Rs 71,269 crore in 2021-22 (budget estimate). Over
the period 2006-22, the Compound Annual Growth Rate (CAGR) has been 13%. CAGR is the annual
growth rate over a certain period of time.
Compositi
on of
Welfare
Spending
The
Pros of welfare spending:
Rationale • It can help to reduce poverty
• Better access to education
of Welfare • Help in providing food to homeless people
• Access to medical treatment
• Help mitigate the income and wealth inequality problem
Spending Cons of welfare spending:
• Quite costly
• People consider it to be questionable
• Lot of corruption
• Welfare significantly differs across states
• Applying for these programs are very tedious and time consuming
• People may misuse the programs
• Welfare addresses the symptoms, not the causes
The Proportion of
GDP spent in Welfare
India’s social sector expenditure has grown in snail pace with just 7.7% of the gross
domestic product (GDP) going to the sector that encompasses crucial areas like education,
public health, sanitation, labour welfare among others, data shared in the economic
survey 2019-20. It showed the slow pace of social sector expenditure in India and counted
several central government schemes in public health, education, and sanitation that it
argued is helping the common people across the socio-economic ladder. Some of the
milestones to be achieved in this journey are access to electricity, a clean cooking facility,
and housing for all in the coming years.
Public spending on social sector was increased in 2020-21 to mitigate the hardships
caused by the pandemic and the loss to livelihood due to the lockdown. The development
and welfare schemes implemented by the government over the years together with the
relief packages announced by the government enabled the country to endure the impact of
the COVID-19 pandemic and led to a V-shaped economic recovery. During the lockdown,
online schooling took off in a big way and the government introduced several measures to
make online education accessible to all children
Welfare Programs in India
Right from the dawn of independence Indian policymakers have professed to promote
equitable economic development in the country. This has involved balancing economic
growth with reduction in the acceleration of inequality and augmented social protection of
the poor. The nomenclature for this growth strategy has changed and, in its current version,
is called “inclusive growth”. Such a strategy has been enshrined in a number of official
documents including the 12th Five Year Plan. Both high economic growth and effectively
functioning welfare schemes are central to the agenda of inclusive economic growth. Indeed
there is a symbiotic relationship between the two. High economic growth both pulls up
people from below the poverty line and generates additional resources for financing welfare
schemes and thus provides social protection. Welfare schemes protect the poor and
disadvantaged and equip the labor force in the lower rungs of the skill/economic welfare
totem pole to better participate in the process of accelerating economic growth.
Provide social
security measures
such as pensions, • To improve the
• Upliftment of
insurance, quality of the life
the poor.
maternity of the people.
benefits, housing
Objectives etc. • Reducing the
• Empower
economic
• Development of women for their
inequality
rural and better
of the Union backward areas.
between different
sections of
participation in
society.
society.
Governmen • To provide
• To provide
education and
• To provide
financial security
employment training to the to the vulnerable
t Schemes opportunities. weaker sections of
•the
To society.
provide
sections of
society.
in India financial
assistance to
women, small
businesses and
weaker sections of
society.
Benefits of Union Government
Schemes for Individuals
There are many schemes launched by different Ministries of the Union Government for the benefit of
the citizens of India. The schemes for individuals mainly focus on the vulnerable sections of the society
such as rural and urban poor households, women, SC and ST, senior citizens, domestic workers etc.
Each scheme concentrates on providing different socio-economic or financial welfare to the people.
The government schemes are beneficial to individuals for obtaining training and employment
opportunities. Some schemes help in availing loans at a minimum rate of interest, opening a bank
account for individuals, availing financial assistance to meet expenses of an individual, obtaining
insurance and enrolling for pension by paying a minimum amount.
Some of the schemes concentrate on development and empowerment of woman. It provides financial
assistance to the woman for starting their own business. There are schemes which provide basic
education to the woman, maternity benefits and rehabilitation facilities.
Some schemes for the individuals concentrate on providing basic necessities to the individuals such as
LED lights, drinking water, distribution of food grains, housing, clean environment etc.
Pradhan
The Pradhan
The Jan Dhan Mantri Vaya
Mantri Jan
Yojna: Vandana
Dhan Yojna:
The Ministry Yojana:
of Skill
National Skill
The Stand-Up Development
Development
India scheme: &
Mission
Entrepreneurs
hip
Government Schemes
Overtime In her Budget speech, finance minister Nirmala
Budget Sitharaman said the Centre is focusing on
“boosting spending and enhancing consumer
spending”.
Responses Like last year, her long speech didn’t contain
too much detail on how much the government
was actually planning to spend under different
heads in the coming year, or how much it spent
from the allocated amount from the previous
financial year.
Here, in charts, break downs show how much
the Centre promised to spend on certain
flagship welfare schemes last year, how much it
actually expects to spend, and how much it has
promised to spend in the year ahead.
Ayushman
Bharat
PM KISAN
Pradhan
Mantri
Fasal Bima
Yojana
Swachh Bharat Mission
Pradhan
Mantri Awas
Yojana
AMRUT
and Smart
Cities
MGNREG
A
Conclusion
The case for a major role for the state in welfare depends both on facts and on value judgements. In
India a very large sum of the budget is spent on welfare schemes. Education and healthcare are of
primary concern which in return is helping the country’s economy to grow. The government is
launching new schemes for the needy frequently but the main problem arises in the execution of these
schemes. The promised amount of funds allocated towards a certain welfare scheme is not used, rather
just a fraction of that sum is actually put into use. Apart from this, awareness amongst citizens is
highly concerning. People are not aware about the benefits they can avail and as a result these benefits
are enjoyed by corrupt politicians in terms of monetary gains. Even though the government is trying its
best to improve the condition of the needy, red taping and lack of awareness are the biggest hurdle this
country needs to get past.
