February , 2018
Budget 2018-19 a boost to social sectors
16:10 pm

Varsha Singh

Indian Finance Minister Arun Jaitley, while placing the Union Budget 2018, said, “Government’s estimated schematic budgetary expenditure on health, education and social protection for 2018-19 is Rs 1.38 lakh crore against estimated expenditure of Rs 1.22 lakh crore in comparison to Budget 2017-18. This expenditure is likely to go up by at least
Rs 15000 crore in 2018-19 on account of additional allocation during the year and extra budgetary expenditure.”



The Finance Minister announced two new initiatives under the Ayushman Bharat Programme in the Union Budget 2018. He announced a new flagship National Health Protection Scheme, providing a yearly health insurance cover of Rs 5 lakh per family. The scheme will cover 10 crore vulnerable families and is expected to reach around 50 crore beneficiaries. Jaitley said “We are slowly progressing towards universal health coverage.” He also said that this would be the world’s largest healthcare programme.

This scheme is the latest avatar of the Rashtriya Swasthya Suraksha Yojana (RSSY), which was previously known as the Rashtriya Swasthya Bima Yojana (RSBY) and operated under the labour ministry. The latest scheme includes 30 million more households than the RSBY, which had been renamed as the RSSY in 2017-18 and has now again been renamed as the National Health Protection Scheme.

According to the analysis by FactChecker, there has been a 2.1% decline in the allocation towards the national health mission, which is India’s largest programme for primary health infrastructure. Jaitley also announced the creation of health and wellness centres aimed at enhancing accessibility. These centres, 1.5 lakh in number, will provide free essential drugs and diagnostic services. A sum of  Rs 1200 crore had been allocated for these centres. The government also announced establishment of 24 new medical colleges and hospitals.  Among other investments, Rs 600 crore has been allotted for providing nutritional support to tuberculosis

Mohan Guruswamy, Chairman and Founder, Centre for Policy Alternatives, said in his Facebook post, “They (government) are just distracting us with promises and hoping to stave off the inevitable - popular discontent. Take for instance the much-hyped National Health Protection scheme to cover 500 million people or 100 million families with medical cover of up to Rs 5 lakh. But what is the proposed outlay for this? It is a measly  Rs 30, 000 crore translating into a premium of about  Rs 3000 per beneficiary family, whereas the prevailing premiums are at about  Rs 4400 a year.” He added,

“If government hospitals and clinics continue to have fewer doctors and lesser medicines be happy with your health insurance and go to a private nursing home or corporate hospital and see how soon the cover evaporates. In effect this is a direct benefit to private healthcare providers, and insurance companies who will get a  Rs 30, 000 crore windfall.”

India has a little over one million modern medicine (allopathy) doctors to treat its population of 1.3 billion people. Of these, only around 10% work in the public health sector, shows data from the National Health Profile 2017.

Only one in five doctors in rural India are qualified to
practise medicine, found a World Health Organisation (WHO) report on India’s healthcare workforce, highlighting the widespread problem of quackery. The WHO report, published in 2016, said 31.4% of those calling themselves allopathic doctors were educated only up to Class 12 and 57.3% doctors did not have a medical qualification. In India, self-styled doctors without formal training provide up to 75% of primary care visits.

There are 462 medical colleges that teach 56,748 doctors and 3,123 institutions that prepare 1, 25,764 nurses each year, but with India’s population increasing annually by 26 million, the numbers are too little. Instead of establishing more medical colleges, what needs to be done first is to have well-qualified faculty in each  college to train doctors, nurses, and health technicians. 

The healthcare industry is waiting for a much needed boost.

“The government is allowing higher income tax exemption on insurance premium and healthcare cess- both will lead to higher expenditure in healthcare by individual and the government will have more funds for healthcare growth, which is very commendable. We had expected some relief on imported equipment and the government’s encouragement on medical consumables and devices made in India, which would have provided much needed boost to the health industry.  However, general upbeat budget, will compensate for it,” said Dr. Alok Roy, Chairman, Medica Group of


The Finance Minister said that education is a priority area for the government and allocated Rs 85,010 crore for the sector. He said, “We now propose to treat education holistically without segmentation from pre-nursery to Class XII.”

The human resource development ministry is working on a plan to integrate several flagship school schemes including the Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA) and teacher education. As of now, SSA and RMAS have a joint mandate to make school education universal. Jaitley said the country is looking to spend `1 trillion to renew the infrastructure of higher education institutions. He unveiled a new scheme called Revitalising Infrastructure and Systems in Education (RISE). The RISE scheme will be financed via a restructured higher education financing agency (HEFA) that is functioning for the last two months and operates as a non-banking financial company. It aims to lend low-cost funds to government higher educational institutions. Of the total education outlay for FY19, school education has got the lion’s share of  Rs 50,000 crore and the rest Rs 35,010 crore has gone to higher education.

In the school sector, SSA has been allocated Rs 26,128 crore up from Rs 23,500 crore in the previous budget. Similarly, RMSA will be provided with `4,213 crore, up by `300 crore from the previous Budget. The flagship school meal programme will get `10,500 crore in FY19, an increase of `500 crore from the previous budget.

Even as the Budget talked about setting up a chain of special schools for tribal students, it cut the allocation for both its marquee school chains of Kendriya Vidyalayas and Jawahar Navodaya Vidyalayas. In the higher education space, the total budgetary allocation has been reduced for IITs—from Rs 8,244.8 crore to Rs 6,326 crore in 2018-19. There is a cut in the budget allocations to IIMs as well. Additionally, the allocation to the University Grants Commission has also been reduced.

Despite its digital education push, Budget 2018 has cut fund allocation for e-learning from Rs 518 crore to Rs 456 crore in FY19. However, it has pegged an allocation of Rs 250 crore for the World Class Institutions plan. The Budget also replaced the 3% education cess by a 4% education and health cess. This will help the government to garner Rs 11,000 crore per annum.

Dipankar Chatterji, former Chairman, CII, eastern region said, “This Budget is focused on social welfare.  We think that the Finance Minister has done a good job. There are welcoming measures announced for the health and education sector. He has talked about the quality of education, which is a first by any Finance Minister. He has also talked about institutes of eminence, and encouraging research and creating more research fellowship.”

According to FactChecker’s analysis of Budget data, in absolute terms, this Budget of Rs 85,010 crore breaks a declining trend in allocation to the HRD ministry under the Modi government and is a Rs 5,324 crore or 6.7% rise from 2017-18, when Rs 79,685 crore was allocated. However, as a share of the total Union Budget, the HRD ministry’s allocation has dropped 0.23% points to 3.48% in 2018-19, the lowest since 2014-15. 

The Budget does not address the vacancies in government-run schools. In 2016, a million teaching post - 900,000 in elementary schools and 100,000 posts in secondary schools-were vacant. The Budget has provided no emphasis on filling up the vacancies.

According to the latest Economic Survey, India’s spending on Research and Development (R&D) in terms of percentage of GDP has been stagnant at 0.6 to 0.7% in the last two decades, much lower than the US, China, South Korea, and Israel. Although India’s investment in science, which is measured in terms of Gross Expenditure on R&D (GERD), has tripled in the last decade, the ratio was stagnant at 0.6 to 0.7% of the GDP.

“According to one analysis (Forbes, 2017) there are 26 Indian companies in the list of the top 2,500 global R&D spenders compared to 301 Chinese companies. 19 (of these 26) firms are in just three sectors - pharmaceuticals, automobiles and software,” said the Survey. India still has a long way to go when it comes to transforming itself into a knowledge based economy. Even though the government boasts about high enrolment,
according to ASER, students in age group 14-18 demonstrated lack of basic skills despite the many years of schooling behind them.

Out of all children in Std. VIII, 27% are unable to read a Std. II level text. While, 42% children in age group 14-18 cannot carry out basic tasks like reading simple sentences in English. The quality of education is degrading in the educational institutions. Students’ general knowledge needs to improve. More than half the children, 58% could not recognise their state on the map of India while 36%, were unable to correctly name the capital of the country. The boy versus girl enrolment ratio starts to increase with growth in age. According to ASER, at the age of 18, only 68% girls are enrolled in school as against 72% boys.

Lack of skills is another major disadvantage that the youths in India face today. According to the National Sample Survey, out of the 470 million people of working age in India, only 10% receive any kind of training or access to skilled employment opportunities. There is a huge mismatch between demand and supply when it comes to skilled workforce and employment opportunities. According to the International Labour Organisation, in 2016, the global unemployment rate for youth stood at 13.1%. Data by the Labour Bureau suggest that, during that period, India was on par with the global average -13.2% of those between 18 and 29 years of age who were seeking a job in 2015-2016 remained unemployed.

According to a 2015 report (Skill Development in India), there were about 12,000 Industrial Training Institutes (ITI) with a capacity for 1.7 million seats. The report also cited that it will need about 110 million skilled workers by 2022 across 24 key sectors.


According to a report by IndiaSpend on January 31, 2018, inadequate sanitation, management of human excreta, solid waste, and drainage costs India Rs 2.4 trillion ($53.8 billion) every year in losses due to health, damage to drinking water and tourism costs.

Keeping in mind India’s mission to make India open-defecation free by 2019, the Finance Minister reiterated the government’s focus on toilet construction. In 2018-19, the government aims to build 18.8 million toilets under the Swachh Bharat-Gramin (Clean India-Rural) scheme. Jaitley informed, “This will create employment of 170 million person days.”

While Budget estimates for the Swachh Bharat Mission (SBM) in 2018-19 are the highest since its inception in 2014, the Modi government has actually cut allocation to the mission by 7% as the allocation stands at Rs 17,843 crore in 2018-19 from Rs 19,248 crore in 2017-18. According to a report by IndiaSpend, only 4% of funds allocated to the SBM have been spent on information and education which is well below the recommended 8-12 %. A budgetary provision of Rs 2.5 crore has been made for installation of sanitary napkin-vending machines and sanitary incinerators in 159 civic run schools.

Prime Minister Narendra Modi, after coming to power, announced that India would become open defecation free (ODF) by October, 2019. But according to the UN figures, 524 million Indians (till June 2017) still defecate in the open every day.  A study conducted by the Institute of Development Studies, Water Aid and Praxis, which was published in October 2017, claimed that several ODF villages are not free from open defecation. The study was done in three villages of Madhya Pradesh’s Sehore district, two of Uttar Pradesh’s Shamli district and three of Rajasthan’s Pali district. In all the surveyed villages of UP and Rajasthan, the researchers found open defecation prevalent and even identified the areas of open defecation in a few of them. In one of the villages of Pali, where 900 households were surveyed, they found that the total current usage of toilets was only 1%.  While in two villages of Shamli, it was 63% and 16%, respectively.

According to the CAG report, the ministry failed to utilise funds approved under monitoring and evaluation (M&E) head. Only Rs 0.32 crore out of Rs 22.40 crore allocated was utilised on the activities covered under M&E from 2009-10 to 2013-14, diverting the remaining Rs 22.08 crore to other activities. Joint secretary Arun Baroka evaluated how lack of proper monitoring is killing the programme in his letter to all the states written towards the end of 2017. He wrote, “Reports  show that toilets  constructed  in the villages  are incomplete  and of  poor  quality  resulting in instances where  these  toilets  are  not  being  used  by people. Such instances have also been found in villages that have been declared as open defecation free. This is a serious lapse and tantamount to false and incorrect reporting on the programme status. In test-checked 53 districts of eight states, proportion of defunct toilets was found to be more than 33% due to reasons like poor quality of construction, incomplete structure, non-maintenance etc.”

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