Linking social and environmental priorities has become imperative in working towards sustainable development goals (SDG). Inadequate investments in social sector by the governments assume critical importance and cause of concern for the economic development of countries. India’s social sector expenditure is around 2.6 percent which is said to be the lowest among the BRICS nations. World Bank estimated that India will grow at 7.3 percent and will become third largest economy in the world by 2030. Contrary to the growth prospects envisaged India trail behind in many of the social indicators to it neighboring nations like Srilanka and Nepal. It ranks lower in human development index and human capital index. Expenditure on public health is poor. Vast proportion of employment created about 80 percent is treated as ‘vulnerable employment’. It means that this employment is characterized by lack of adequate or formal working conditions badly wanting social security and also typified by productivity. 

Real GDP sliding below 5 percent

It is painful to see the real GDP of the country sliding below 5 percent and the unemployment rate increasing at 6 percent, a 45 year high record. India ranks 147 among 157 in Oxfam world inequality index. No doubt, there is increased awareness in India increased importance is given to provide state of the art health facilities, world class educational landscape, strong property rights in the holistic economic growth targets. This is not enough more quantum of social sector investments is called for and strict vigilance is needed in financial administration and strategic management, shedding populist short cuts.

States are better placed to spend

In our federal context, states are better placed to incur expenditure on social sector. The Fourteenth Finance Commission gave ample discretion to the states for utilizing untied resources from the share of central transfers. However there are several constraints and limitations because of the polycyclic nature of finances for spending on social sector components. In this context one argues for the need of getting more private sector participation along with public spending on this vital aspect.

CSR needs a fresh look

The Investment in social sector by the corporate bodies is steadily dwindling though more and more industries are springing up over years. The corporate social responsibility takes in its fold the integration of social and environmental concerns to business operations. India is the first and the only country to mandate spending of average 2 percent of the net profits for social development. The corporate bodies chose mainly there areas for spending on CSR namely, health, education and rural development. However there is no strict mechanism to oversee that the system works as intended. However, the sincerity of approaching CSR needs fresh look comparing it with advance countries.

New challenges in social sector development

The education and health components need special attention. Though universalisation of primary education is achieved to a great extent and the literacy rate increased and dropout rates decreased, ensuring quality education tackling the problem of exclusions remains vital. Bringing together affordability with access, quality and good governance are still of great concern. While a lot has been achieved on health front – child mother morality rates dramatically cut down and on several counts preventive measures for diseases taken up successfully; instances of failures are not uncommon. Incidence of the pandemic covid-19 opened up new challenges in social sector development.


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(This Article has been reposted with permission from Primepost)