The Narendra Modi government has embarked on an effort to accelerate coverage of its flagship welfare programmes, with ministries pushing to utilise their budgets for 2023-24 as soon as possible so as to avoid a crowding of the budgets in the run-up to March 2024, the end of the financial year, people familiar with the matter said. Analysts believe that there could be another motive for this as well — the 2024 elections.
Among the efforts underway is a drive by the health ministry to add another 70 million families to its 100 million-strong flagship scheme Ayushman Bharat in the next four months; the agriculture ministry’s move to add 33.4 million eligible beneficiaries in the ₹60,000 crore Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and expand risk coverage under the ₹13,625-crore Pradhan Mantri Fasal Bima Yojana to 70 million farmers; and the water and sanitation ministry’s focus on providing 300,000 villages with a solid waste management system, and providing functional piped water connections to 40 million more households.
Besides outlays for individual schemes, ministries and other implementing agencies have been given measurable “outputs” and “outcomes” for accountability, three officials said requesting anonymity. “It is the basis for judging the performance of individual ministries,” one of them said.
While outlay means the budget allocated to a scheme in 2023-24, output is the measurable product, and the outcome is the ultimate result or qualitative improvement, this person added. This year, 2023-24 is the last full financial year for the second term of the Modi government before the crucial general elections by May next year. Four large states also go to polls later this year.
Prime Minister Modi has often spoken of “saturation coverage” of his government’s welfare schemes, and his Bharatiya Janata Party has effectively combined welfarism and Hindutva into a winning election platform. In an interview ahead of the Karnataka elections, home minister Amit Shah said the Modi government’s policies have created a new “caste” in the country — that of “beneficiaries”.
The cabinet secretary on Saturday chaired a ‘chintan shivir’ organised by the Union finance ministry that deliberated implementation of projects, flagship programmes, large schemes and other major budget announcements. “The objective of the ‘chintan shivir’ was to share insights and learnings on successful implementation of projects and schemes, discuss challenges and help ministries draw up a roadmap for timely and effective delivery on-ground,” it said in a tweet on Monday.
“The list [of schemes] is long, as the government is monitoring performance of 148 major schemes,” the first official said, adding that funds will not be a constraint for any welfare programme and if required more money could be given at the revised estimate (RE) stage.
The Ayushman Bharat scheme , the government’s health coverprogramme , provides medical insurance up to ₹5 lakh per family per year to over 100 million poor families (approximately 500 million beneficiaries). The plan is to register 70 million additional families in the next four months, the second official said.
The distribution of 7 crore (70 million) cards — mostly in Uttar Pradesh, Chhattisgarh, Madhya Pradesh ad Rajasthan — means an additional 350 million people will be covered under the world’s largest universal health care scheme, he said.
Officials involved in the planning maintained that a number of key schemes and projects with a large public outreach in six to seven ministries will see a further push and early deadlines.
The officials said good governance and welfare of the poor are the two key principles driving the Modi government’s political and economic developments, which was particularly evident during the pandemic period that hit India in March 2020.
“Free food to 800 million poor people, direct cash assistance to underprivileged and measured economic stimulus not only saved lives and livelihoods but also protected our MSMEs,” a second official said.
The government’s strict monitoring of capital expenditure and welfare programmes during that period saw front-loading of budgeted expenditure and the same approach has continued, he added. The official attributed India’s strong economic recovery post-pandemic, growing by 7.2% in 2022-23 (provisional estimates), to this approach. Much of the economy’s growth is powered by government spending.
On June 4, 2021, while reviewing the capital expenditure performance of various ministries and central public sector enterprises (CPSEs) under them, finance minister Nirmala Sitharaman said that enhanced capex will play a critical role in revitalising the economy post-pandemic and encouraged ministries to front-load their capital expenditure. That year (2021-22), the Union budget provided a capital outlay of ₹5.54 lakh crore, a sharp 34.5% jump over the budget estimate of 2020-21. In 2023-24, the budget has provided a capital outlay of ₹XXXX crore.
The third official said the government’s focus on front-loading capex is guided purely by economic considerations. “However, it had a multiplier effect. It helped in creating demand, providing jobs, and eventually generating resources for welfare work.”
The government made significant announcements in Budget 2023-24, both for social and economic development, and all ministries are expected to spend the budgeted amount according to a monthly expenditure plan (MEP) and quarterly expenditure plan (QEP) for proper implementation of schemes and to avoid last-minute rush, he said. “This is a prudent and efficient expenditure policy followed for several years to get the best value out of public money.”