COVID-19: Boost to health budget came at the cost of education, nutrition, says study

NEW DELHI: An analysis of the state budgets of 2019-20 and 2020-21 has shown that the increase in health spending during the COVID-19 pandemic was made possible with reduced spending on education and nutrition.

The analysis by the National Institute of Public Finance and Policy (NIPFP) said growth in aggregate spending on education and nutrition in states was less than 0.5 percent while the health sector saw a 16 percent increase in spending.

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The study analysed budget actuals and revised estimates during the period between 2019-20 and 2020-21, of 15 states of India.

“A disaggregation of social sector expenditures suggests that there was a steep rise in health

expenditures in the pandemic year. Health expenditures grew at around 16 percent in the 15 major states under study. These have, however, come at a cost of negligible or very low growth in a number of other important sectors like education and nutrition,” the study said.

Education budget increase negligible

Education services only saw an increase of 0.3 percent in aggregate spending while nutrition services stagnated with no increase.

According to the study, education expenditures fell in seven of the 15 states during this period.

Karnataka and Chhattisgarh registered the highest fall in education expenditures at around 10 percent deficit. Nutrition expenditures also fell sharply in Jharkhand, Telangana, Chhattisgarh, Madhya Pradesh and Tamil Nadu.

Andhra Pradesh saw the highest increase in aggregate spending on education (source: Shutterstock)

At the same time, Tamil Nadu, Karnataka, Jharkhand, Odisha, Andhra Pradesh and Chhattisgarh also registered a growth rate of more than 25 percent in aggregate spending on health expenditures.

The study said that states’ own revenues were lower by about 12 percent and disbursal of tax money from the central government to the states declined by 22.9 percent in the same period.

Difference in state budgets

Andhra Pradesh saw the highest increase in aggregate spending on education during the pandemic with a 17 percent growth. Uttarakhand and Gujarat also saw a growth of more than six percent in aggregate expenditure on education during the same time.

Rajasthan, Himachal Pradesh, Telangana and Jharkhand are the other states to record a positive growth in education expenditure.

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“Our analysis highlights the inter-state differences in bridging the revenue-expenditure gap, social sector priorities vis-à-vis economic services and growth of spending in core sectors like health and education,” the study said.

The study also found that there was an increased expenditure on social services during the pandemic. According to the study, Social services grew by about 6.1 percent, as against 3.7 percent in economic services during 2019-20 to 2020-21.