Budgetary Allocation Trends on Education and Health

The Union Budget was tabled in the Lok Sabha on 1st February, 2020. The overall budget allocation witnessed a 7.6% increase from the last budget. This growth in overall budget allocation has been the lowest in the last 5 years. The increase was as high as 21.2% in 2018-19. But since then it has seen a slow growth.

Source: Union Budgets, Ministry of Economic Affairs, Government of India

While there has been a 7.6% increase in the overall allocation in 2020-21, the same increase has been 4.7% in terms of allocation to education and 3.9% in terms of allocation to health. This has been lower in terms of last year for both education and health. The retail inflation is as high as 7.5% in January. So effectively in real terms there is deceleration in the growth rate of allocation to health and education.

Source: Union Budgets, Ministry of Economic Affairs, Government of India

The allocation to education has been 3.26% of the total budgetary allocation which is lower then last year when it was 3.36% of the total budget, This is also significantly lower as compared to the previous years. This has been been the lowest in last ten years. The same percentage hovered around 5% till 2016-17. Since then there has been a decline.

Source: Union Budgets, Ministry of Economic Affairs, Government of India

The allocation to health has been 2.21% of the total budgetary allocation with a marginal decline from last year. The percentage of allocation to health in the total budgetary allocation has seen a constant increase since 2015-16 with the highest being 2.4% in 2017-18. It has hovered around this range as against 1.7-1.9% during 2014-15 to 2016-17. The same was around 2.3% during 2011-12 to 2013-14.

The budget also gives the actual estimates of the money spent in previous years. This year the actual estimates of 2018-19 was reported. There has been a 14% growth in the actual estimates of the total spending in 2018-19 as compared to the previous year. This has been the highest in the last three years.

Source: Union Budgets, Ministry of Economic Affairs, Government of India

While the overall actual estimate saw a significant rise, the same was not visible for education and health. The growth in actual estimates has been as low as 0.2% in 2018-19 and this is significantly less than the previous year. The growth of health allocation has been as high as 36% in 2017-18. But this also saw a decline and the growth in 2018-19 is 2.9%.

Source: Union Budgets, Ministry of Economic Affairs, Government of India

A comparison of the percentage of the total allocation of the budgetary estimate and the actual estimates for education shows that while there has significant gap in the two estimates with the actual estimates lower than the budgetary estimates till 2016-17, for 2017-18 and 2018-19, 100% of budgetary allocation was spent on education. However as discussed above there has been decline over time with the actual spending on education which was 4.6% of the actual spending as of 2011-12, stood at 3.3% in 2018-19.

The comparison of budgetary and actual estimates for health shows a reverse picture. Since 2014-15 there has been more than 100% spend on health actually as compared to the budgetary estimates. Overall also there has been a steady increase with the actual spending on health stood at 1.9% of the total spending in 2011-12, the same is at 2.2% in 2018-19.

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