Social Sector Budgeting: An Analysis Of Expenditure Patterns And The Budget Making Process In India In The 1990s.

The study is undertaken as part of the 'Revisioning Social Policy for the 21st Century' programme of the Institute of Development Studies in Sussex and funded by DFID. 

If the government's ostensible claim were to be believed, the prime objective of most policies today is to help the poor and reduce their numbers. This claim is even made with regard to the reforms. An attempt has been made in this study to examine the genuineness of this claim through analysing budgets and social sector expenditures in the 1990s. Budgets constitute the most crucial policy documents to assess the social and economic priorities of governments. 

Budget can be analysed from three perspectives. First, budget content viz, type of allocations, and their trends. The second perspective is the justification of these decisions. That is the manner in which government legitimises its allocation decisions. The third perspective is the budget making process. One has to examine if it is participatory, which kinds of stakeholders are involved; whose interests are mainly represented; which ideas have dominated the process.

An analysis of trends revealed that not much priority is given in India to social sector expenditure. Since the mid 1990s, though a higher proportion of government expenditure has been allocated to the social sector, as compared to the first years of the 1990s, social sector spending as a proportion of GDP has not increased much.

The analysis of the budget speeches revealed that the poor are considered very important in the justification of the budgets. The official argumentation is that the poor would benefit from the economic reform process. Nothing, however, is said about social inequality and redistribution of wealth.

The budget making process has neither been very participatory nor democratic. The Finance Ministry played a greater role in the process of Plan and budget making in the 1990s. Many policy makers and/or economic advisors to the government seem to regard the Plan in general, and social sector spending in particular, as residual.

The study highlights the need to increase budget allocations for the social sector, but it is unlikely that this will happen in the near future, without some substantial changes in the budget making process.

(The study has been published as CESS Working paper No. 43 (2002) and in the course of 2002, an IDS Working paper will also be published).