Article 41 of the Constitution directs the State to secure public assistance in cases of unemployment, old age, sickness, and disablement. While the 1991 economic reforms accelerated Gross Domestic Product (GDP) growth, aligning public social expenditure with equitable human development remains an ongoing governance challenge. In recent years, combined Centre-State expenditure on social services has hovered around 7.5% to 8% of GDP (roughly 7.8% in 2023–24).

Pattern and Trend of Public Expenditure in Post-Reforms India

• Transition from Price Subsidies to Direct Welfare Entitlements: Post-1991 budgetary allocations have gradually shifted from universal, distortionary price subsidies (e.g., fuel and fertilizer subsidies) toward targeted social investments such as Pradhan Mantri Awas Yojana (PMAY) for affordable housing and Ayushman Bharat for secondary and tertiary healthcare coverage.
• Prioritizing Human Capital (Education and Health): Budgetary allocations for school education and public health have expanded to address human capital gaps. Total education outlays crossed ₹1.12 lakh crore in 2023–24, while health spending increased by 13% to reinforce post-pandemic public medical infrastructure.
• Fiscal Devolution to Sub-National Tiers: Following the 14th and 15th Finance Commissions, states receive a higher untied tax share (41–42%), placing greater responsibility for social service expenditures on State Governments.
• Targeted Livelihood and Social Safety Nets: Continued prioritization of rural employment and poverty alleviation through rights-based and targeted schemes like MGNREGA, PM Jan Dhan Yojana, and PM-KISAN.
• Direct Benefit Transfers (DBT) and Cash Support: Expanding adoption of cash-support models (e.g., PM Matru Vandana Yojana, state-level cash transfers) directly into bank accounts to reduce intermediary leakages.

Extent of Alignment with Inclusive Growth

1. Positive Alignments (In Consonance)

• Educational Attainment: Programs like Sarva Shiksha Abhiyan and the RTE Act, 2009 increased national literacy from 52.2% in 1991 to 77.7% by 2021, bridging primary school gender gaps.
• Healthcare Protection: Ayushman Bharat PM-JAY has extended health coverage to over 120 million vulnerable families, mitigating catastrophic out-of-pocket health expenditures.
• Food and Nutrition Security: The National Food Security Act (NFSA), 2013 provides subsidized foodgrains to roughly 800 million citizens, creating a critical safety net against malnutrition.
• Pandemic Livelihood Cushion: Enhanced outlays under MGNREGA (surpassing ₹1.11 lakh crore in 2020–21) absorbed reverse-migrant labor during economic distress.

2. Persistent Deficits (Not in Consonance)

• Low Baseline Public Allocations: India’s public health spending (approx. 1.3–1.4% of GDP) and public education spending (approx. 3.1% of GDP) remain below the targets recommended by the National Health Policy 2017 (2.5%) and the National Education Policy 2020 (6%).
• Inter-State Regional Asymmetries: Social spending growth has been uneven; socio-economic indicators in economically weaker states continue to lag behind coastal and southern states (e.g., significant disparities in Infant Mortality Rates).
• Quality and Execution Gaps: Budgetary increases have improved physical access and enrollments, but foundational learning outcomes (as documented by ASER reports) and primary health center staffing in rural areas continue to face quality bottlenecks.

To fully realize inclusive growth, public social expenditure must focus on institutional accountability, outcome-based budgeting, and targeted regional allocations to build resilient human capital.