High On Cause, Low On Effect

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It is our intention to give rural India a new deal,” was the clarion call of P. Chidambaram, the then finance minister, in his 2005 budget speech, setting the agenda for a social sector thrust by the central government that looks likely to continue. Sources in the finance ministry say the current finance minister, Pranab Mukherjee, is likely to reiterate that call when he presents the first full budget of the United Progressive Alliance (UPA) government’s second term on 26 February 2010.

That social sector spending — funding schemes devised to focus on growth in rural areas — is a necessity and not an ideology is borne out by a simple, stark fact. Sixty-five per cent of India’s 1.1 billion population relies on agriculture for subsistence, but the sector contributes a mere 17 per cent to the country’s $1-trillion GDP. This means that a large section of the population is unable to earn enough to live with dignity, a situation that the government has been trying to address.

Real results, though, have not been forthcoming. Despite huge money being spent on healthcare, most rural Indians have to travel to cities for medical care. Ditto for education, where, despite a lot of money spent and several ongoing schemes, the dropout rate remains high. Poor coordination between central and state government agencies even results in allocated funds being returned unspent.

The challenge today, therefore, is to ensure that the myriad schemes actually deliver what they are meant to, through more performance- and result-oriented sub-clauses in their Acts. Hopefully, Mukherjee will address a few of these issues in this year’s budget.