India: Civil Society Keeping a Close Watch on Social Spending in Madhya Pradesh

by Dr. Yogesh Kumar, Samarthan— Apr 25, 2016

The Indian state of Madhya Pradesh is home to almost 75 million people, with a high proportion of scheduled castes and tribes. The state faces many social development issues: high incidences of poverty and malnutrition, low literacy levels, poor quality education, relatively high infant and maternal mortality rates, and persistent gender disparity.

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Samarthan, a civil society organization and IBP partner, works in Madhya Pradesh to address these issues by strengthening grassroots civil society groups. One of the ways we do so is through the People’s Budget Initiative (PBI), a large national network of CSOs that work together to influence budget policy. At the heart of PBI is the belief that public resources are more likely to be spent toward the greater good when representation from various societal sectors is incorporated into the budget process. The government is not only responsible for ensuring economic growth but also social justice, and those who are marginalized and poor need a louder voice and more representation in policy discourse, particularly how public resources are used.

In March, 2016, the Madhya Pradesh government presented the budget for financial year 2016-17, which Samarthan and PBI have been working hard to influence. As we shall see, however, our work doesn’t stop once the budget is released: translating what’s on paper into positive outcomes for the poor and marginalized requires constant vigilance and reassessment.

So What’s in the Budget?

The budget indicates that the government plans to take some steps to address some of the challenges faced by the state. There has been a consistent focus on agricultural growth over the last few years and, among other agricultural spending, this budget includes investing more in irrigation schemes to increase cultivable agricultural land area. To support local retail businesses by leveling the playing field, the budget also establishes a six percent entry tax for online purchases.

But systemic problems remain in how essential social services are being delivered that the budget does little to address, and its impact is visible on the ground.

Health Care: While the state’s Infant Mortality Rate (IMR) has improved from 69 deaths per 1000 births in 2005-06 to 51 in 2015-16, it remains far above the national IMR of 40. Community Health Centers (CHCs) are also understaffed: according to a 2015 Ministry of Health report, only around 20 percent of the specialists required at CHCs are actually in post. Primary Health Centre (PHC) facilities are also lacking, as only 37 percent have operation theatres. While the 2016-17 budget proposes opening 2,000 new sub-PHCs and allocating funds to improve tertiary care, it fails to address the lack of doctors, medicines, and infrastructure at existing sub-PHCs. Such deficiencies, along with improved roads, are already driving people to travel to more reliable PHCs rather than the sub-PHCs closer to their villages. Until conditions at existing sub-PHCs are addressed, constructing additional sub-PHCs is unlikely to improve people’s access to quality healthcare.

Education: There is a clear need to improve education in the state. Nearly 53 percent of secondary schools are without a school building and only 63.9 percent of children in rural areas are literate Furthermore, according to official records, the state’s student-teacher ratio is 48:1 at the primary level, and nearly 37:1 at the secondary level, in spite of the Right to Education constitutional amendment which states the student-teacher ratio should be 30:1. Adding to the critical teacher shortage is the state’s practice of short-term teacher contracts. Teachers are campaigning for their employment status to be made permanent, but regularizing and retaining the state’s teaching personnel would require a substantial increase in the education budget.

Rural Poor: The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is a massive public work support program that guarantees 100 days of paid employment per year to poor rural families in India. It is a critical program for poor workers. While the state’s 2016-17 MGNREGS allocation may appear to be higher than before, it fails to account for the devastating impact the current drought is having on the rural poor. Furthermore, there is a substantial shortage in the current balance available in the treasury for wage payments against the payments that are due. The MGNREGA website showed that at the end of 2015-16, 25 out of the 29 states in India had a negative balance and had no money to pay the outstanding dues, let alone open new works. The Supreme Court has intervened in the matter and the Ministry of Rural Development released INR 1233 million to the states as central share to meet the previous year’s expenditure as well as to initiate new works.

Sustainable Development Goals: Despite the national government recently committing to achieving the Sustainable Development Goals (SDGs), there is nothing substantially different in the present budget to support SDG progress.

What We See May Not be What We Actually Get

The issues that the current budget fails to address notwithstanding, there is also the challenge that what we see in the budget as published may not be what we actually get when it comes to implementation.

If past experience holds true, we can expect significant adjustments during the financial year that may impact important social sector programs. For example, in FY 2015-16, many social sector programs received substantially less funding than what appeared in the published budget. Middle schools received only 32 percent of the funding that was budgeted for them, programs to help scheduled castes and tribal people receiving just 25 to 50 percent of their budget, and the social security and welfare budget was reduced by 60 percent, which affected disbursement of pensions to the elderly, disabled, and widowed citizens.

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These are just a few examples of how MP’s current budget allocations are likely to change throughout the budget year. The government is not obligated to adhere to its budget commitments and, in the past, it clearly has not — either due to weak political will to fulfill socially desirable goals or uncertainty in receiving allocated funds from the central government. Even when the state does receive the funds it was promised, however, actual expenditures have historically been lower than even the reduced line items.

This will likely remain true when actual expenditures for FY 2015-16 are released. As per the recommendations of the 14th Finance Commission, the Government of India agreed to increase the states’ share in the net proceeds of Union tax revenues by 10%. It was expected these funds would be more rationally distributed among state services and programs, as the additional resources provided the state an opportunity to demonstrate its willingness to address development challenges. This, however, was not done, and the previous year’s revised estimates have not indicated any such signs.

With the Budget in Place, What Is Civil Society’s Action Plan?

Public money should be judiciously spent with an eye to the greatest impact, applying the principles of equity and social justice. Samarthan, along with other PBI members, are pushing the government of Madhya Pradesh to improve.  Budget groups in Madhya Pradesh will regularly monitor state social sector spending and the impact of budget reductions at the district level and below. PBI network members will track the expenditure patterns for their priority social sector programs and engage with and question the elected representatives of the Assembly. A stakeholder consultation meeting will be planned at which CSOs will present evidence on how the budget is being spent in communities and across sectors, and monitor the revised estimates of social sector budgets in the third quarter of the financial year.


The author would like to thank Ravi Duggal for his valuable inputs and guidance in finalizing this article.

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