Budget may offer little to social sector

The Union Budget for 2011-12 is likely to be a low-key affair for social sector spending, as the government is unlikely to come up with any big-ticket announcement for the sector in the next financial year.

During the previous Budget also, the finance minister refrained from announcing any additional social sector scheme.

This time, the government is expected to channelise its resources towards improving the existing schemes and keeping space for the promised ones like the Right to Food Act, which is yet to take a concrete shape, officials say.

Though social sector spending will continue to be the government's top priority with a major chunk of allocation expected to be made towards existing schemes like the Mahatma Gandhi Rural Employment Guarantee Scheme (MGREGS), many social sector ministries have got broad hints from the finance ministry that no new schemes would be entertained and the government's emphasis in the Budget is likely to be on the existing schemes in agriculture, education and infrastructure.

A decent dose of funding is expected in health and education sectors, especially in view of the poor progress in controlling maternal and infant mortality rates, say these officials.

According to Planning Commission officials, both these sectors are likely to get a 20 per cent increase each over their 2010-11 Budget allocations.

That the next financial year would be the last year of the 11th Five-Year Plan may be one of the reasons for this restraint, but government officials said concerns over inflation and the fiscal compulsion to curb deficit were equally important factors.

An official in the Ministry of Women and Child Development, which enforces the nutrition-based ICDS scheme for pre-school children, said: "We were told not to come with any new schemes before the Budget."

The schemes which will be funded anyway are the proposed Food Security Bill and the Right to Education Bill, which has already started receiving funds.

Health and education - two of the priority sectors under the Eleventh Plan (2007-12) - did not receive adequate allocations in the first four years of the Plan.

However, the ministries of rural and urban development got more than estimated, because both the ministries did not have adequate absorptive capacity.

Therefore, the Planning Commission is looking to bridge some of the gap between the spending in health and education sectors in the last year of the Plan.

The surprise winner this Budget may be agriculture and agricultural research, as officials say the finance minister's priority is to keep fiscal deficit in check while facilitating inclusive growth.

And while contribution of agriculture to the gross domestic product (GDP) is 14.6 per cent, about 65 per cent of the population was dependent on it. Hence, it may get more Budgetary push for increasing productivity.

The funding may go to areas of research, as for a long time there has been little improvement in terms of new strains of crops, an official in the finance ministry said.

The agriculture sector is also anticipating tax benefits on import of agricultural tools and other mechanisation equipment.

Sarva Shiksha Abhiyan, which has turned into a vehicle for implementing the Right to Education, has already got a boost in funding, as the Centre's share of funds has increased to 65 per cent from 50 per cent, officials say.

So, this year again, the allocation may see a slight increase from the Rs 31,000-crore (Rs 310 billion) allocation in 2010-11.

The flagship MGNREGS, under criticism for inefficiency and leakage of funds, might not get the expected increase sought by the Ministry of Rural Development, the officials said.

The ministry has sought Rs 64,000 crore (Rs 640 billion_, up 60 per cent from the present allocation of Rs 40,000 crore (Rs 400 billion).

However, with the pay being revised according to the inflation index, the government is expected to continue making it one of the major beneficiaries.

"Even as spending should ideally be cut on MGNREGS and other schemes which have received excess funding with respect to the Plan in the previous years, we will have to sustain the expenditure," said a senior Planning Commission official on the condition of anonymity.

The schemes likely to suffer from lower budgetary allocation might be the social security of workers. The new Bill for equal remuneration for regular and contract workers might not happen, labour ministry officials said.