Finance Minister P Chidambaram was all praise for the women and child development ministry for spending its funds efficiently. The ministry was rewarded with a significant increase in allocation this year.
What the ministry did was funnel its funds to pay salaries to anganwadi workers. That a long-term goal, such as paying salaries, was made part of Plan expenditure and Central funds were allowed to be spent on it made all the difference, says an analyst.
In the case of social sector ministries, Planning Commission has forbidden states from spending Central funds on long-term goals which come under non-Plan expenditure. So, while states fall short of funds for long-term goals, Central funds remain unused, says Subrat Das, executive director, Centre for Budget Governance and Accountability, which analyses the Budget for its social sector spending. Schemes such as Sarva Siksha Abhiyan and National Rural Health Mission prevent the states from spending Central allocations on long-term goals, Das points out. As a result, ministries of health and education have their allocations cut drastically in the revised estimates. The allocations this year were based on the revised estimates last year and have, therefore, meant lesser funds for the social sector.
While allocations for Integrated Child Development Services (ICDS) went up from Rs 10,000 crore to Rs 15,000 crore, because of "efficient spending", the allocation for health stood at Rs 37,330 crore this year against Rs 34,388 crore in the last Budget. The revised estimate for health was Rs 29,273 and this has affected the allocations this year.
Similar is the case of education. It has been allocated Rs 79,451 crore this year, while in the previous Budget it got Rs 74,056 crore. The revised estimate was cut to Rs 66,819 crore.
A similar slashing of funds can be seen in rural development where Budget estimates were Rs 80,000 crore and the revised estimates are as low as Rs 55,000 crore. The allocation now has, however, touched the earlier level.
If the government follows the approach it adopted in the case of ICDS, then not only would states be able to recruit adequate number of teachers and doctors and pay their salaries, they would also spend the funds efficiently, says Das.
Bihar Health Secretary Amarjit Sinha, however, differs. He says that funds have been squeezed because the Centre did not have enough money and thus, went back on its commitment to the social sector. If you want the Right to Education to be justiciable from April 1, then you are bound to provide funds for Sarva Siksha Abhiyan, he says. Instead, the government has slashed allocation to education in the revised estimate, Sinha adds.
He dismisses Das's contention that states are not allowed to spend Plan funds on non-Plan goals. The Centre, says Sinha, is now flexible in this matter for schemes like Sarva Siksha Abhiyan and National Rural Health Mission.