Friday, June 27, 2008

India’s social sector spending low

by Jenny Hodge

A recent study conducted by ASSOCHAM Eco Pulse (AEP) has revealed that while India with its unabated growth momentum stands out as a preferred investment destination, the country lags far behind its peers in social sector achievements.

The study says that despite the sustained rise in budgets over the years, India’s public spending on health as a percent of GDP is second lowest among the BRIC countries and lowest in terms of education.

According to the ASSOCHAM, public health and education expenditures among the BRIC countries revealed that India’s public expenditure on the two most significant social sectors, health and education stood at 5 per cent and 9.2 per cent respectively as a per cent of GDP in FY 2005-06.

In comparison Brazil and Russia spent 7.9 per cent and 5.2 per cent on health as a per cent of GDP in FY 2005-06.

India is a notch above China with public expenditure on education at 5 per cent of GDP in 2005-06.

Surprisingly, China ranked lowest among the BRIC countries with a minimal share of 4.9 per cent of public expenditure on health.

India needs to keep pace with other developing countries in its social sector development, to meet the twin objectives of rapid progress and inclusive growth.

It needs to invest in more quality education and health services, said Mr. Sajjan Jindal, President ASSOCHAM.

The compression of the public spending by India on health is also reflected in terms of high infant mortality rate as a consequent of rising population and poverty of the country.

In FY 2006-07, India’s mortality rate under-5 (per 1000) stood at 76, the highest among the BRIC countries.

In contrast, Russia was ranked lowest infant mortality rate at 16 per 1000 deaths in FY 2006-07.

China and Brazil ranked second and third with mortality rates 24 and 20 per 1000 deaths respectively.

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