Fiscal Prudence and Human Development Budget Analysis

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FISCAL PRUDENCE AND HUMAN DEVELOPMENT
TABLE OF CONTENTS
ACKNOWLDGEMENT 2
INTRODUCTION 4
OBJECTIVES OF THE PROJECT 6
RESEARCH METHODOLOGY 6
LITERATURE REVIEW 7
UNDERSTANDING HUMAN DEVELOPMENT IN VIEW OF UNION BUDGET 2019:

ANALYZING KEY AREAS 19
EDUCATION SECTOR 19
HEALTH SECTOR 21
INFRASTRUCTURE SECTOR 22
AGRICULTURE SECTOR 26
KEY OBSERVATIONS ON ODISHA BUDGET: A PERSPECTIVE FROM THE

EDUCATION SECTOR 27
EDUCATION SECTOR IN VIEW OF THE ODISHA BUDGET 32
SURVEY REPORT 35
CONCLUSION 38
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ACKNOWLDGEMENT
At the onset, the authors would like to express their earnest gratefulness and thank their
mentor Mrs. Madhubrata for instilling confidence in them and entrusting the task to carry out a
project on this topic. The authors are indeed privileged having being groomed in a prestigious
institution like National Law University Odisha, Cuttack. They would also like to express their
gratitude to their friends for their support and help. Their gratitude also goes out to the staff
and administration of National Law University Odisha, Cuttack for the library infrastructure and
IT lab that was a source of great help for the completion of this project.
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INTRODUCTION
Fiscal Prudence in economic terms means being conservative while estimating the revenues but
also accounting for the unforeseen costs at the same time while estimating the expenditures. It
means presenting the most unflattering view of your assets and liabilities. This fiscal prudence is
seen in the budget of the country taking its place in the policies of the government. Although
there are people’s values and choices about government and the budget, in the long run many
widely shared policy goals that require federal spending will be unattainable if the budget is not
on a sustainable path. It will be difficult to simply continue the programs that people have come
to expect, let alone allow sufficient flexibility for future generations to develop new policies for
a changing world. There are varied views of the nation’s priorities and how best to achieve
them, including the proper size and role of government.
We do not necessarily agree, about the extent to which the federal budget ought to aim at
expanding individual responsibility and choice or at promoting economic security; whether the
nation should limit the use of carbon fuels or eschew such limits to facilitate economic growth;
or how much to emphasize national security concerns versus expanding education and other
programs that may promote equality of economic and social opportunity. What the
government does agree on is the need for a set of straightforward criteria that anyone can use
to assess the fiscal responsibility of any budget proposal for the overall federal budget from a
long-term perspective.1
Fiscal prudence in most countries, including India, is focused on general government deficit.
Though there is strong merit in focusing on the public sector borrowing requirement (PSBR) to
judge fiscal health, paucity of data and its timeliness always prevented having a consolidated
view of public sector borrowing. In the Indian federal system also, the focus has always been in
controlling fiscal deficit reflected in the state and union government budgets without much
attention to PSBR. Deficit in the government budget is not a true reflection of public sector
1
“Choosing Nation’s Fiscal Future” (NAP), accessed on 25th August 26, 2019
<https://www.nap.edu/read/12808/chapter/5>
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indebtedness. However, this situation has changed significantly for some states in India with
the introduction of the Ujwal DISCOM Assurance Yojana (UDAY). 2 Under UDAY, a number of
state governments have taken over the debt of power distribution companies in their books of
accounts. Though this one-time intervention made both debt and deficit measures more
comprehensive in many states for two years, it has raised many challenges, including
comparability of deficit across states and long-term fiscal implications of power sector debt on
state finances.
The demonstration of fiscal prudence in the Union Budget 2019-2020 was accompanied by
according importance to reviving private investments, amidst the current slowdown in growth.
As envisaged in the Economic Survey, the budget deploys a multi-pronged support structure to
kick-start a virtuous cycle of investments. With a tight adherence to fiscal prudence norms
Finance Minister has taken firm steps to achieve the new horizons the government envisages
over the next five years.
Talking on the human development the Budget brings many more steps for the rural economy
such as strengthening of farmer producer organizations, setting up business incubators, and
developing 75,000 rural entrepreneurs. 3 With the acceleration of massive projects of
Bharatmala, Sagarmala, gas and water grids, and optical fiber connectivity across villages, the
costs of doing business are likely to be reduced. Furthermore in the project there are various
issues highlighted which include fiscal prudence in Human development
2
Lekha Chakraborty, “Beyond Fiscal Prudence and Consolidation” (EPW), accessed on 25th August 26, 2019
<https://www.epw.in/journal/2016/16/budget-2016%E2%80%9317/beyond-fiscal-prudence-and-
consolidation.html>
3
Chandrajit Banerjee, “The Focus on Fiscal Prudence is Welcome” (BusinessLine), accessed on 25th August 2019
<https://www.thehindubusinessline.com/opinion/the-focus-on-fiscal-prudence-is-welcome/article28312593.ece>
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OBJECTIVES OF THE PROJECT
1. To understand the various nuances of the Union Budget 2019 and its impact on Human
Development.
2. To gauge the implications of Fiscal Prudence in view of Union Budget, 2019.
3. To critically analyze the Education sector in view of the Odisha Budget.
4. To understand the practical application of the budgetary goals and human development.
RESEARCH METHODOLOGY
The researchers, have resorted to both primary and secondary modes of research. To present
an understanding of the topic on the basis of primary method of research wherein a survey was
conducted of 4 government funded schools. Additionally, the researchers have also utilized
secondary mode of research. There has been a thorough reading of books, journals, articles and
statistics report by various organizations.
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LITERATURE REVIEW
FISCAL POLICY RULES IN INDIA
SUMMARY
This paper assesses the potential usefulness of fiscal policy rules for India, in the light of rapidly
growing international experience in this area. As part of this assessment, it explores various
design options and institutional arrangements that seem relevant for India, in the context of
the Fiscal Responsibility and Budget Management Bill. To conclude, the paper outlines
preparatory steps for successful implementation
Fiscal policy means the use of taxation and public expenditure by the government for
stabilization or growth of the economy. By fiscal policy we refer to government actions affecting
its receipts and expenditures which ordinarily as measured by the government’s receipts, its
surplus or deficit. It also feeds into economic trends and influences monetary policy. When the
government receives more than it spends, it has a surplus. If the government spends more than
it receives it runs a deficit. To meet the additional expenditures, it needs to borrow from
domestic or foreign sources, draw upon its foreign exchange reserves or print an equivalent
amount of money. This tends to influence other economic variables.
On a broad generalization, excessive printing of money leads to inflation. If the government

borrows too much from abroad it leads to a debt crisis. Excessive domestic borrowing by the
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government may lead to higher real interest rates and the domestic private sector being unable
to access funds resulting in the “crowding out” of private investment. So it can be said that the
fiscal deficit can be like a double edge sword, which need to be tackled very carefully.
Following are some of the important objectives of fiscal policy adopted by the Government of
India:
1. To mobilise adequate resources for financing various programmes and projects adopted for
economic development.
2. To raise the rate of savings and investment for increasing the rate of capital formation;
3. To promote necessary development in the private sector through fiscal incentive;
4. To arrange an optimum utilisation of resources;
5. To control the inflationary pressures in economy in order to attain economic stability;
6. To remove poverty and unemployment;
7. To attain the growth of public sector for attaining the objective of socialistic pattern of
society;
8. To reduce regional disparities; and
9. To reduce the degree of inequality in the distribution of income and wealth.
GAP/ISSUE
Following are the major shortcomings of the fiscal policy of the country
(i) Instability: Fiscal policy of the country has failed to attain stability on various fronts. Growing
volume of deficit financing has created the problem of inflationary rise in price level.
Disequilibrium in its balance of payments has also affected the external stability of the country.
(ii) Defective Tax Structure: Fiscal policy has also failed to provide a suitable tax structure for
the country. Tax structure has failed to raise the productivity of direct taxes and the country has
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been relying much on indirect taxes. Therefore, the tax structure has become burdensome to
the poor.
(iii) Inflation: Fiscal policy of the country has failed to contain the inflationary rise in price level.
Increasing volume of public expenditure on non-developmental heads and deficit financing has
resulted in demand-pull inflation. Higher rate of indirect taxation has also resulted in cost-push
inflation. Moreover, the direct taxes have failed to check the growth of black money which is
again aggravating the inflationary spiral in the level of prices.
(iv)Negative Return of the Public Sector: The negative return on capital invested in the public
sector units has become a serious problem for the Government of India. In-spite of having a
huge total investment to the extent of Rs 4,21,089 crore in 2007 on PSUs the return on
investment has remained mostly negative or lower. In order to maintain those PSUs, the
Government has to keep huge amount of budgetary provisions, thereby creating a huge
drainage of scarce resources of the country.
(v) Growing Inequality: Fiscal policy of the country has failed to contain the growing inequality
in the distribution of income and wealth throughout the country. Growing trend of tax evasion
has made the tax machinery ineffective for the purpose. Growing reliance on indirect taxes has
made the tax structure regressive.
III. REMARK
Following are some of the important measures suggested for necessary reforms of the fiscal
policy of the country:
(i) Progressive Taxes: The tax structure of the country should try to infuse more progressive
elements so that it can put heavy burden on the rich and less burden on the poor. Necessary
amendments should be made in respect of irrigation tax, sales tax, excise duty, land revenue,
property taxes etc.
(ii) Agricultural Taxation: The tax net of the country should be extended to the agricultural
sector for rapping a huge amount of revenue from the rich agriculturists.
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(iii) Broad-based Tax Net: Tax net of the country should be broad-based so that it can cover
increasing number of population having the taxable capacity.
(iv)Checking Tax Evasion: Adequate measures be taken to check the problem of tax evasion in
the country. Tax laws should be made stricter for prosecuting the tax evaders. Tax machinery
should be made more efficient and honest to gear up its operations. Tax rate should be reduced
to encourage the growing trend of tax compliance.
(v) Increasing Reliance on Direct Taxes: Tax machinery of the country should attach much more
reliance on direct taxes instead of indirect taxes. Accordingly, the tax machinery should try to
introduce wealth tax, estate duty, gift tax, expenditure tax etc.
(vi) Simplified Tax Structure: Tax structure and rules of the country should be simplified so that
it can encourage tax compliance among the people and it can remove the unnecessary
harassment of the tax payers.
(vii) Reduction of Non-Development Expenditure: The fiscal policy of the country should try to
reduce the non-developmental expenditure of the country. This would reduce the volume of
unproductive expenditure and can reduce the inflationary impact of such expenditure.
(viii) Checking Black Money: The fiscal policy of the country should try to check the problem of
black money. In this direction schemes like VDIS should be repeated. Tax rates should be
reduced. Corruption and political interference should be abolished. Smuggling and other
nefarious activities should be checked.
(ix) Raising the Profitability of PSUs: The Government should try to restructure its policy on
public sector enterprises so that its efficiency and rate of return on capital invested can be
raised effectively. PSUs should be managed in rational manner with least government
interference and on commercial lines. Accordingly, the policy of budgetary provisions for
maintaining the PSUs should gradually be eliminated.
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FISCAL PRUDENCE AND POPULISM
I. SUMMARY
Himadri Bhattacharya in her article about the Union Budget 2019 and populism states some
important facts and numbers and further relates it with the growing populism.
The fiscal deficit target which was missed for two years in a row has put the financial markets at
unease as a consequence. A target of 3.4 per cent (to GDP) in 2019-20 against an expectation of
3.1 per cent had increased this unease. As acknowledged in the Budget speech, the slippage in
2018-19 and the higher deficit target in 2019-20 are the result of the scheme for providing
income support of ₹6,000 per year to the small and marginal farmer families.
The yield on the benchmark 10-year government security, which has been exhibiting a rising
trend since the end of 2018, went up further by about 12 basis points during the post-Budget
trading. A sub 3 per cent fiscal deficit is now quite a distance away. To the credit of the
government, and contrary to the flurry of speculations in this regard, the RBI has not been
called upon to boost the government’s revenue by way of any untimely or special dividend
payment. The government has done well to await the recommendations of the committee that
has been set up to comprehensively examine relevant issues.
The Budget’s proposals to ensure a minimum monthly income of 15,000 for persons working in
the unorganised sectors and to bring them under some modest social security coverage
are increasing signs of populism in the Budget. Given the fact that India’s past and current high-
growth phases have not been employment-generating, particularly in the organised sectors; a
fiscal push in this regard targeting the large expanses of the various unorganised sectors seems
to be a practical and pragmatic solution.
In India, the Budget is expected to fulfil the wish-lists of all and sundry. The political classes now
seem to have a good understanding of this phenomenon which means that the Budget exercise
entails not only a fiscal balancing act but also an intricate act of managing the expectations and
perceptions of the electorate.
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This Budget follows this line to boot with some sops aimed at electorally important sections of
the population, on the one hand, and to showcase some of its policy achievements during the
last five years, on the other. The presentation of a vision statement is a logical extension of this
approach, especially in an election year. These are fully legitimate actions in a functioning and
highly competitive democracy like India.
GAP/ISSUE
The Union Budget 2019 includes a vision statement of the government for the next decade.
Quite obviously, the Budget proposals and the vision will make sense if the government returns
to power. It is not clear if the present Parliament has the mandate, legal or political, to approve
Budget outlays for a period beyond its current term. Be that as it may, the ruling party has set
the agenda for the forthcoming electoral debate.
REMARK
The Budget indeed makes few populist promises, but refrains from having any frivolous or
extravagant expenditure outlay. Even if the government does not get re-elected, it will be
difficult for the new government to completely reverse the proposals.
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INCLUSIVE GROWTH WITH FISCAL PRUDENCE
SUMMARY
Ravneet Gill in his article about the Budget focussing on inclusive growth states that the budget
can be seen as an enhancement over the interim budget. The finance minister has skilfully
balanced the current needs of a slowing economy with the medium-term goal of scaling up the
Indian economy to a level of $5 trillion by 2024-25.
The single largest feel-good (factor) obviously came from the headline of the budget arithmetic,
with a reduction in FY20 fiscal deficit target to 3.3% of GDP from 3.4% announced in the interim
budget.
This along with unchanged gross market borrowings of the government (pegged at Rs 7.1 lakh
crore) and the idea of tapping overseas markets for borrowings favourably tip the demand-
supply balance for G-secs, validated by the softening seen in yields on 10-year G-secs post the
budget.
Going more granular, the reliance on increased (1) custom duties on several items (2) excise
duties on petroleum products (3) spectrum auction proceeds of Rs 50,500 crore along with (4)
disinvestments and (5) dividends from RBI/financial institutions on the revenue side make room
for the envisaged double-digit growth of 21% in spending.
The demonstration of fiscal prudence was accompanied by according importance to reviving

private investments, amidst the current slowdown in growth. The budget deploys a multi-
pronged support structure to kick-start a virtuous cycle of investments via 1) reduction in
corporate tax to 25% for 99.7% of companies 2) infusion of Rs 70,000 crore into public sector
banks 3) one-time partial guarantee to high rated pooled assets of NBFCs 4) further relaxation
of FDI in select sectors along with easing local sourcing norms in single brand retail and 4)
eliminating the angel tax issue for start-ups.
This should, in turn, help job creation and augment incomes. From a medium term perspective,
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the FM used the budget to lay down the government’s vision for the next 5 years; taking
forward the reforms and achievements of the last term.
Combining the signals from the interim and full budget, one can infer that the government has
put an equal thrust on domestic consumption and private investment, with growth recovery
being a derivative of both. The combined focus on lending support to rural economy, along with
MSMEs, affordable housing and ease of living sends an emphatic message that growth must
also be inclusive.
GAP/ISSUE
At first glance it might seem that the issues of growth and unemployment are linked and solving
the former would address the latter. However, this would be a dangerous assumption to make
for India.
REMARK
To address the issue of growth slowdown, it is necessary to go to its root cause. There are two
sides to the story: supply and demand. In the supply side, to put it simply, India's credit system
is clogged. The capital of Indian banks is locked up in Rs 14 lakh crore of stressed assets and,
despite all efforts to the contrary, the resolution mechanism is still slow. The public sector
banks (PSBs), which account for two-thirds of the banking system, are facing serious capital
shortages, which has made them risk-averse and, thus, wary of lending. As credit availability
dries up, the fuel that drives investment vanishes, slowing the latter.
Meanwhile, the demand side of the issue lies in falling domestic consumption. However, this is
only a sign of the slowing economy as people are left with less disposable income to spend on
goods. Once investment revives, money will flow through the system and consumption will pick
up.
So, the Budget needs to focus on reviving investment and the obvious tool of boosting public
investment is also not available as the fiscal deficit is well above its target already.
The second issue of job crisis is a long-standing problem for India and cannot be resolved in a
Budget or two. The Budget can only provide a fiscal
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stimulus package like the one India saw implemented in 2009 as a response to the financial
crisis.
Improving the productivity of India's labour through education and skilling is indispensable.
Beyond that, a data-based approach towards policy making can also prove helpful here.
Employment elasticity, a measure of how employment varies with economic output, can be
measured for the economy and each sector within it. Targeting investment within sectors with
the highest employment elasticity can maximise the job-creating capacity of the economy.
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FISCAL PRUDENCE AND GROWTH

SUMMARY
Fiscal prudence remains a positive quality whether the economy is doing well or badly.
However, pressures to abandon such prudence and embrace fiscal profligacy become
dangerously seductive during a slowdown.
A key question demanding an answer in the current context is whether fiscal policy can play a
significant role in the revival of the economy. The problem is that this question has had to be
posed in the context of deteriorating fiscal balances at the level of the central and state
governments. Had the state of fiscal balances been healthy, the dilemma in the use of fiscal
policy would not have been as acute as it seems currently
The crucial issue, which needs elaboration, is whether the creation of deficits in order to revive
the economy is likely to have an adverse effect on the economy. All arguments in favour of
fiscal prudence seem to indicate that generation of deficits is likely to retard growth and could,
in fact, be hostile to growth
The results stress the need for restructuring of the composition of government expenditure in
favour of investment in infrastructure while ensuring that (a) the fiscal deficit is unchanged or
even reduced, and (b) such investment is contingent upon enforced financial discipline
emphasising cost recovery and productivity gains.
It can be noted that government expenditure has been one of the biggest drivers of
consumption growth and in turn aided growth process in the last few years, when private
investments have been lacklustre.
The report also raised concerns on the off-balance sheet borrowings by the government, stating
while such moves help contain fiscal deficit closer to the glide path, but is an "expensive way of
mobilising resources".
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GAP/ISSUE
The Narendra Modi government has done well by following the fiscal consolidation path. But
the next year will be another difficult year for fiscal management as the government will need
to push capital expenditure.
There are at least two issues that will affect government finances.First, the fiscal gains from
lower oil prices will wane. Second, if the revenue growth is less than 14%, the Union
government will have to compensate the state governments for the shortfall after the
implementation of the goods and services tax.
REMARK
The government needs to ensure that it maintains a balance between fiscal prudence and
investment-driven growth; an imbalance could either lead to a slowdown or rise in inflation. It
is possible for the government to go for an option such as to increase investments to provide a
temporary boost, but it has to proceed with extreme caution especially as direct tax collections
—a key source of investment—have not been satisfactory during the year.
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FISCAL PRUDENCE AND AUSTERITY
SUMMARY
Chandrajit Banerjee in his article about the focus on Fiscal prudence states the facts and figures
of the Union Budget n relation to the welcome of fiscal prudence. With a tight adherence to
fiscal prudence norms, the Union Budget has taken firm steps to achieve the new horizons the
government envisages over the next five years. The overall objective of the Budget is clearly to
work towards ensuring that India reaches the milestone of $5 trillion GDP by 2025. In this, it
activates the growth drivers of consumption, investment and infrastructure connectivity. At the
same time, there has been strong emphasis on future technologies, sustainability, agriculture,
and manufacturing.The Budget is well-balanced and pragmatic. At this stage, the economy
needs a stable and sound foundation that will impart confidence to both investors and ordinary
consumers, and this is adequately covered through the Budget.
GAP/ISSUE
If governments followed adequate fiscal policies most of the time, we would almost never need
austerity. Economic theory and good practice suggest that a government should run deficits
during recessions — when tax revenues are low and government spending is high as a result of
the working of fiscal stabilisers such as unemployment subsidies — and during periods of
temporarily high spending needs.
REMARK
These deficits should be balanced by surpluses during booms and when spending needs are
low. In addition, forward-looking governments might want to accumulate funds for ‘rainy days’
to be used when spending needs are temporarily and exceptionally high. If governments
followed these prescriptions, austerity would never be needed. Instead, periods of austerity are
relatively common, for two reasons.
First, most governments do not follow the foregoing prescriptions: deficits often accumulate
even when the economy is growing and the deficits produced during recessions are not
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compensated for by surpluses during booms. So, many countries have accumulated large public
debts even in ‘normal’ times.
The second reason why austerity may be needed is that sometimes extremely large amounts of
government spending, perhaps even larger than anticipated, create so much debt that it cannot
be reduced simply with economic growth. In some cases, countries have grown out of debt.
UNDERSTANDING HUMAN DEVELOPMENT IN VIEW OF UNION BUDGET 2019: ANALYZING KEY

AREAS
EDUCATION SECTOR
● The Union Budget, allocated ₹94,853.64 cr for education sector in 2019-20, an increase
of nearly ₹10,000 cr of what 2018-19 budget estimates had pegged for the sector. While
in 2018 budget estimate had pegged ₹85,010 cr, the revised budget had curtailed this
number to ₹83,625.86 cr.
● Of the total ₹94,853.64 cr education budget, ₹56,536.63 cr has been pegged for the
school sector and rest ₹38,317.01 cr has been allocated to the higher education. In the
school sector the bulk of the allocation (₹36,322 cr) will be allotted to “Samagra Shikha
Abhiyan”, a new scheme that amalgamates several school schemes including the Sarva
Shiksha Abhiyan. The mid-day meal program has been allocated ₹11,000 cr or ₹500 cr
more than what 2018-19 budget estimates had pegged.
KEY FEATURES OF EDUCATION SECTOR
New Education Policy
With an aim to transform India’s higher education system to one of the global best education
systems, the government proposed a New National Education Policy. The policy proposes
significant changes at both secondary and higher education levels and lays greater focus on
research and innovation. The policy aims to equip students with the necessary skills and
knowledge, remove the hurdle of manpower shortage in science, technology, academics and
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industry.
National Research Foundation (NRF)
The government has proposed to set up National Research Foundation (NRF) that will help in
the funding, coordination and promotion of research in the country. The foundation will also
assimilate independent research grants given by different Ministries. NRF will be chaired by
Prime Minister and co-chaired by Principal Scientific Advisor, Government of India. It proposes
better governance systems and focuses on research & innovation. Funds available in all
ministries will be integrated under NRF. The new foundation will aim to build a "comprehensive
collaborative mechanism between the Central and State governments, public agencies,
research organisations, educational institutions and industries." It will enable centralised
funding and outcome monitoring mechanism, thus ensuring "coordinated research and
innovation efforts, especially in problems areas critical for India and also globally relevant".
World-Class Institutions
For the financial year, 2019-20, Rs 400 crore has been allocated to establish world-class
institutions in the country. The allocation amount is more than three times the revised
estimates for the last year. As per Finance Minister, “There was not a single Indian institution in
the top 200 in the world university rankings five years back. Due to concerted efforts by our
institutions to boost their standards and also project their credentials better, we have three
institutions now – two IITs and IISc Bangalore – in the top 200 bracket.”
Study in India Scheme
With an aim to make India a hub of higher education, the government has proposed Study in
India scheme. The scheme will help in getting foreign students to study in Indian higher
educational institutions.
Khelo India Scheme
The Khelo India scheme, launched in October 2017, will be expanded with all needed financial
support. A National Sports Education Board will also be established under the scheme to
popularize sports at all levels. To sensitise youth about Mahatma Gandhi's ideas, Sitharaman
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said a ''Gandhi-pedia'' is being developed.
Value Added Skills
In order to prepare the youth of India for overseas jobs, increased focus will be laid on
enhancing globally valued skill-sets such as Big Data, 3D Printing, Virtual Reality, Artificial
intelligence & Robotics, and language training. The govt focuses on new-age skills for youth to
get high-paying jobs. To make the Indian youth ready to take up jobs in foreign countries, there
will now be a renewed focus on imparting relevant skills to students.
HEALTH SECTOR
The Union Budget allocated Rs 62,659.12 cr for the health sector in the 2019-2020, the highest
in the last two financial years. The health outlay for this financial year saw an increase of
around 19 per cent over the 2018-2019 fiscal when it was Rs 52,800 cr. The healthcare
ecosystem has seen significant evolution in the past few years, both in terms of services as well
as technology. The bulk of the credit for that goes to the Modi 1.0 government. Between FY15
and FY19, a whopping Rs 2.11 lakh crore was allocated to the Ministry of Health and Family
Welfare in total while the actual expenditure during this period stood at Rs 2.13 lakh cr. The
government consistently overspent by 2-9 per cent in the last four years.
KEY FEATURES OF HEALTH SECTOR
Ayushman Bharat- Pradhan Mantri Jan Arogya Yojna (AB-PMJAY)
The budgetary allocation for the sector is Rs 60,908.22 cr, with Rs 6,400 cr earmarked for the
centre's flagship health insurance scheme Ayushman Bharat- Pradhan Mantri Jan Arogya Yojna
(AB-PMJAY). It is a scheme of the Union government that aims at providing annual health cover
of up to Rs 5 lakh per family for secondary and tertiary care hospitalisation to over 10.74 cr
vulnerable families (approximately 50 crore beneficiaries).
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Ayushman Bharat Health and Wellness Centre
Rs 249.96 cr has been allocated for setting up Ayushman Bharat Health and Wellness Centres
under the National Urban Health Mission to provide comprehensive primary care close to the
community, while Rs 1,349.97 cr has been earmarked for setting up health and wellness centres
under the National Rural Health Mission.
Under the programme, nearly 1.5 lakh sub-centres and primary health centres will be
transformed as health and wellness centres by 2022. These centres will be equipped to provide
treatment for diseases such as blood pressure, diabetes, cancer and old age-related illness.
National Health Mission
The allocation for the National Health Mission (NHM) for 2019-20 was raised to Rs 32,995 cr
from the last budgetary allocation of Rs 30,129.61 cr. The Rashtriya Swasthya Bima Yojna (RSBY)
which features under the NHM saw an allocation of Rs 156 cr, a decline of Rs 1,844 cr from the
last fiscal.
Miscellaneous
● The government allocated Rs 2,500 cr to its National AIDS and STD Control Programme
an increase of Rs 400 cr from last budget’s allocation of Rs 2,100 cr.
● The budgetary allocation for the AIIMS has been increased to Rs 3,599.65 cr from Rs
3,018 cr in the 2018-2019 fiscal.
● The National Mental Health Programme saw a decline from Rs 50 cr to Rs 40 cr while
the budgetary allocation for the National Programme for prevention and control of
Cancer, Diabetes, Cardiovascular Disease and Stroke has reduced to Rs 175 cr from Rs
295 cr.
INFRASTRUCTURE SECTOR
The Union Budget for 2019-20 was announced by Ms Nirmala Sitharaman, Minister for Finance
and Corporate Affairs, Government of India, in Parliament on July 05, 2019. India is all set to
become US$ 3 trillion economy by the end of FY20. The budget focuses on reducing red tape,
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making best use of technology, building social infrastructure, digital India, pollution free India,
make in India, job creation in Micro, Small and Medium Enterprises (MSMEs) and investing
heavily in infrastructure.4
The Central government plans to spend Rs 100 lakh crore on infrastructure upgradation over
the next five years, projects to bridge urban-rural divide highlighted. The total expenditure for
2019-20 is budgeted at Rs 2,786,349 crore (US$ 417.95 billion), an increase of 14.09 per cent
from 2018-19 (budget estimates). An expert committee would be set up to recommend
structure and flow of funds through development finance institutions.
It was also proposed that the Central government has set to generate Rs 1.05 lakh crore through
disinvestment during the current financial year - 2019-20.In addition to this strategic
disinvestment of Air India (AI) will be reinitiated, while presenting the Union Budget 5 2019-20
in the Lok Sabha on Friday. Strategic disinvestment of select Central Public Sector Enterprises
(CPSEs) will continue to be a priority. Strategic disinvestment of Air India will re-initiate. The
Finance Minister also said the government is considering to go below 51 per cent to an
appropriate level of an ownership stake in non-financial public sector undertakings on a case by
case basis.
The Finance Minister announced a slew of steps to scale up India's infrastructure including
augmenting 1,25,000 kilometres of rural roads under the Pradhan Mantri Gram Sadak Yojana at
a cost of Rs 80,250 crore and creating a national highways grid. Steps are also taken to boost
infrastructure in sectors like roads, waterways, metro, and rail. "The government proposed to
invest in infra, digital economy and job creation in small and medium enterprises. Schemes
such as Bharatmala, Sagarmala, and Udaan are bridging rural-urban divide and improving our
transport infrastructure.
4
Indian Brand Equity Foundation, ‘Union Budget of India 2019-20’ (20 June 2019)
<https://www.ibef.org/economy/union-budget-2019-20> accessed 18 August 2019
5
ANI, ‘Union Budget proposes Rs. 100 lakh crore for infrastructure’ Business Standard (Delhi,5 July 2019)
<https://www.business-standard.com/article/news-ani/union-budget-proposes-rs-100-lakh-crore-for-infrastructure-
119070500578_1.html > accessed 20 August 2019
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KEY FEATURES OF INFRASTRUCTRE

BHARATMALA: The development of any nation depends on the transportation networks and
the ways in which they are being maintained. The same holds true for the development of a
huge and populous nation like India. For connecting the areas and maintaining smooth flow of
traffic, the construction of new and developed roads are a must. The same will be achieved
with the implementation of the Bharatmala project. Under the scheme, a host of new roads will
be laid down in the nation.6
Bharatmala Pariyojana is a new umbrella program for the highways sector that focuses on
optimizing efficiency of freight and passenger movement across the country by bridging critical
infrastructure gaps through effective interventions like development of Economic Corridors,
Inter Corridors and Feeder Routes, National Corridor Efficiency Improvement, Border and
International connectivity roads, Coastal and Port connectivity roads and Green-field
expressways.
SAGARMALA: The Sagarmala is a series of projects to leverage the country’s coastline and
inland waterways to drive industrial development. It was originally mooted by the Vajpayee
government in 2003 as the waterways equivalent of the Golden Quadrilateral. Sagarmala,
integrated with the development of inland waterways, is expected to reduce cost and time for
transporting goods, benefiting industries and export/import trade.
The project is mammoth with 150 initiatives with a total outlay of ₹4 lakh crore, spread across
four broad areas. One, modernise port infrastructure, add up to six new ports and enhance
capacity. Two, improve port connectivity through rail corridors, freight-friendly expressways
and inland waterways. Three, create 14 coastal economic zones or CEZs and a special economic
zone at Jawaharlal Nehru Port Trust in Mumbai with manufacturing clusters to enable port-led
industrialisation. Four, develop skills of fishermen and other coastal and island communities.
To implement this, State governments would set up State Sagarmala committees, headed by the
chief minister or the minister in charge of ports. At the central level, a Sagarmala Development
6
National portal of India, ‘Bharatmala Pariyojana - A Stepping Stone towards New India’ (2019)
<https://www.india.gov.in/spotlight/bharatmala-pariyojana-stepping-stone-towards-new-india> accessed 21 August
2019
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Company (SDC) will be set upto provide equity support to assist various special purpose
vehicles (SPVs) set up for various projects.7
Pradhan Mantri Gram Sadak Yojana: Phase 3 of Pradhan Mantri Gram Sadak Yojana
envisages to upgrade 1.25 lakh km of road length at an estimated cost of Rs 80,250 crore. The
primary objective of the PMGSY is to provide Connectivity, by way of an All-weather Road
(with necessary culverts and cross-drainage structures, which is operable throughout the year), to
the eligible unconnected Habitations in the rural areas with a population of 500 persons and
above in Plain areas. In respect of the Hill States (North-East, Sikkim, Himachal Pradesh, Jammu
& Kashmir and Uttarakhand), the Desert Areas (as identified in the Desert Development
Programme), the Tribal (Schedule V) areas and Selected Tribal and Backward Districts (as
identified by the Ministry of Home Affairs and Planning Commission)* the objective would be
to connect eligible unconnected Habitations with a population of 250 persons and above.
Pradhan Mantri Gram Sadak Yojana 2.2 The PMGSY will permit the Upgradation (to prescribed
standards) of the existing roads in those Districts where all the eligible Habitations of the
designated population size) have been provided all-weather road connectivity. However, it must
be noted that Upgradation is not central to the Programme. In Upgradation works, priority should
be given to Through Routes of the Rural Core Network, which carry more traffic.
Union Budget 2019 Infrastructure Highlights

Some of the major highlights of Union 2019-20 for Infrastructure are given below:
● The Government of India has allocated Rs.94,071 crore (US$ 14.11 billion) in 2019-20 to Indian
Railways.
● An investment of Rs 5,000,000 crore (US$ 750 billion) has suggested by the Central Government
which aims to improve the railway infrastructure between 2018 – 2030.

● The Central Government has also announced that it will invest Rs.10,000,000 crore (US$ 1.5
trillion) in infrastructure in the next five years.
7
Meera Siva, ‘All you wanted to know about Sagarmala’ The Hindu (New Delhi,24 June 2019)
<https://www.thehindubusinessline.com/opinion/columns/all-you-wanted-to-know-about-
sagarmala/article8640858.ece#> accessed 18 August 2019
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● Under the Government’s Pradhan Mantri Gram Sadak Yojana-III (PMGSY), it is contemplated
that it will cost Rs.80,250 crore (US$ 12.03 billion) to upgrade 1,25,000 kms of road length in
the next five years.
● The Government has been able to build 30,000 kms of PMGSY Road using Waste Plastic, Green
Technology, and Cold Mix Technology.
● It has been announced that a proposal has been made by the Government of India to permit
investments by Foreign Portfolio Investments (FPIs)/ Foreign Institutional Investments (FIIs)
in debt securities as issued by Infrastructure Debt Fund.
● The Central Government of India has ensured that all the states in India will have access to the
availability of power at affordable rates under the model – One Nation, One Grid.
● The Government of India will launch the Road - Bharatmala phase 2 to improve the state road
networks.
● The model tendency law – promotion of rental housing has been finalised by the Government
of India.
● The metro rail network in India has reached up to 657 km.
● There has been an improvement in the operating ratio by 95% in 2019-20.
AGRICULTURE SECTOR
A truly agricultural and rural-development focused budget, it has adequately met the twin
objectives of growth and inclusiveness. An announcement of formation of 10000 new FPO’s
over the next five years is a step towards the same. With this, the economies of scale can be
harnessed to achieve the goal of doubling farmer’s income by reduction in input costs and
assuring better price realizations by the farmers for their output.
In the Union Budget, the allocation for the Ministry of Agriculture is Rs 1,30,485 crore and
fertiliser subsidy is Rs 79,996 crore for the year 2019-20. The budgetary estimate for the
Agriculture Ministry for 2019-20 is 140 per cent higher than that for 2018-19 at Rs 57,600 crore,
primarily due to Rs 75,000 crore allocation to PM-Kisan. However, this is Rs 10,000 crore lesser
than the allocation in the interim budgetary estimate 2019-20.
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While fertiliser subsidy allocation increased from Rs 70,090 crore to Rs 79,996 crore, innovative
pilots of 'zero budget farming' will be replicated across the country to reduce fertiliser
dependency. Zero budget farming is a set of farming methods that involve zero credit for
growing agricultural produce and no use of chemical fertilizers. 8 The newly carved out Ministry
of Fisheries, Animal Husbandry and Dairying have been allocated Rs 3,737 crore. Of this, Rs 805
crore has been allocated to Pradhan Mantri Matsya Sampada Yojana (PMMSY) to address
critical gaps in the value chain, including infrastructure, modernisation, traceability, production,
productivity, post-harvest management and quality control.
Allocation under Pradhan Mantri Krishi Sinchai Yojana (PMKSY) remains unchanged from the
interim budget at Rs 3,500 crore. The focus is also on the creation of 10,000 new farm producer
organisations (FPOs) to improve economies of scale over the next five years. The Budget also
outlines setting up of 80 livelihood business incubators (LBIs) and 20 technology business
incubators (TBIs) to develop 75,000 skilled entrepreneurs in the agro-rural industry sector. The
budget overall was dominated by schemes to reduce financial stress and boost complementary
income opportunities towards the goal of doubling farmers' income by 2022. 9
The government’s impetus is to promote non-farm activities to boost economic viability of
farmers. Owing to climate change challenges, it has become imperative to explore viable and
sustainable non-farm means of income generation.
A new scheme Pradhan MAntri Matsya Sampada Yojana will give enough confidence to those
who are in fisheries sector. As the government wants to extend the parameters of ease-of-
doing business and ease-of-living to the rural areas too, the emphasis of ‘Gaon, Garib and Kisan’
will see the uplift of rural lives of farmers and the poor equally.
Enhancing the prospects of agripreneurs, the ASPIRE scheme will create 50000 skilled rural
entrepreneurs, especially in the rural agricultural sector.
8
India Today Web desk, ‘Nirmala Sitharaman's Budget 2019: 75% hike in allocation for agriculture’ India Today
(New Delhi, 5 July 2019) <https://www.indiatoday.in/budget-2019/story/nirmala-sitharaman-s-budget-2019-75-
hike-in-allocation-for-agriculture-1562863-2019-07-05> accessed 22 August 2019
9
Anand Ramanathan, ‘Budget 2019: What Nirmala Sitharaman offers to agriculture sector’ Business Today (New
Delhi, 6 July 2019) <https://www.businesstoday.in/union-budget-2019/decoding-the-budget/budget-2019-what-
nirmala-sitharaman-offers-to-agriculture-sector/story/362166.html> accessed 21 August 2019
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Key Observations on Odisha Budget: A Perspective from the Education Sector
Odisha presented a revenue surplus Budget, pegging the outgo at Rs.1.39 trillion for 2019-20,
higher by 16 per cent over FY19. The Budget seeks to strike a balance between fiscal
prudence10 and funding a bevy of social security & welfare schemes, by restraining the fiscal
deficit for FY20 at 3.49 per cent within the limit of 3.5 per cent mandated under Fiscal
Responsibility & Budget Management (FRBM) Act.11
The Budget forecasts a growth rate of 8-8.5 per cent for the state Gross State Domestic Product
(GSDP), continuing the high growth trajectory over the last five years.12
The outlay is proposed to be financed mainly through revenue receipts of Rs. 1.15 trillion and
borrowing & other receipts of Rs.23,734 crore. The State's own tax/GSDP ratio is pegged at 6.1
per cent in 2019-20. The outstanding debt to GSDP ratio is estimated at 19.7 per cent at the
end of FY20 which is below the FRBM limit of 25 per cent. The budget outlay is split into total
programme expenditure (Rs.74,600 crore) and administrative expenditure estimated (Rs.
57,310 crore).13
The budget focussed on borrowing agriculture production & productivity, expanding irrigation,
improving health care, education and skills for our people, investing in the youth and providing
safe drinking water, sanitation, better livelihood opportunities, social security, electricity and
rural connectivity. With substantial increase in investment in physical infrastructure, it aimed
increasing economic activities and attracts manufacturing and service industries and service
industries.
10
Henry Campbell Black, Bryan A. Garner, ‘Black’s Law Dictionary’ (10th ed. Aspatore Books 2014)
11
BS Reporter, ‘Odisha Budget outgo up 16% to Rs 1.39 trn, stake eyes 8-8.5% growth in FY20’(2019)
<https://www.business-standard.com/article/economy-policy/odisha-budget-outgo-up-16-to-rs-1-39-trn-stake-eyes-
8-8-5-growth-in-fy20-119062801172_1.html> accessed 20 August 2019
12
‘Odisha Budget 2019-20’ The Times Of India (Odisha, 7 February 2019)
<https://timesofindia.indiatimes.com/city/bhubaneswar/odisha-budget-2019-20-
highlights/articleshow/67885311.cms> accessed 20 August 2019
13
‘Odisha Budget Analysis’, PRSindia <https://prsindia.org/parliamenttrack/budgets/odisha-budget-analysis-2019-
20> accessed 21 August 2019
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Carrying ahead its tradition since 2013-14, the Odisha government presented an exclusive
budget for agriculture with an outlay of Rs 20,714 crore for FY20. Besides the budgeted outlay,
about Rs.8000 crore is being invested through extra budgetary resources every year to ensure
timely payments to farmers for paddy procurement. The agriculture budget has earmarked
Rs.5611 crore for the state government's much lauded “Krushak Assistance for Livelihood and
Income Augmentation” or KALIA scheme for 2019-20. 14In this financial year, the state has fixed
a target to create additional irrigation potential of 265,000 hectares. To boost farm credit, the
budget has set aside Rs 800 crore for interest subvention on crop loans for this fiscal.
Biju Swasthya Kalyan Yojana (BSKY), another flagship programme of the Odisha

government launched as an antidote to the Central government's Ayushman Bharat has
received an allocation of Rs.1203 crore. The Budget talks of creation of disaster resilient power
infrastructure after being pounded by Fani, a very severe cyclonic storm recently. A sum of
Rs.100 crore has been provisioned for Odisha Skill Development Project with assistance from
the Asian Development Bank (ADB). Moreover, Rs 237 crore has been set aside for industries
and attracting investment. The Budget bereft of any new tax or scheme has significant
allocations for flagship schemes and other programmes-
● Madhubabu Pension Yojana (Rs 2,120 crore),

● MAMATA scheme Rs (305 crore),
● Samagra Sikhsya (Rs 2,250 crore),
● Pradhan Mantri Gram Sadak Yojana (Rs 2900 crore),
● Smart City Mission (Rs 400 crore),
● Biju Krushak Yojana (Rs 420 crore),
● Mukhya Mantri Swasthya Seva Mission (Rs 578 crore) and,
● Ama Gaon Ama Bikash Yojana (Rs 400 crore).
14
‘Odisha government presents Rs. 1.39 lakh crore budget for FY20’, Money Control
<https://www.moneycontrol.com/news/business/economy/odisha-government-presents-rs-1-39-lakh-crore-budget-
for-fy20-4151261.html> accessed 21 August 2019
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Table showing major highlights of the Odisha budget:
%
2017- 2018- 2018- 2019- change
18 19 19 20 from RE
Sector Budget provisions for 2019-20
Actua Budget Revis Budget 2018-19
ls ed ed ed to BE
2019-20
● Rs 7,046 crore has been
allocated towards
government primary
schools, and Rs 2,535
crore has been allocated
14,53 17,89 towards government

Education 17,658 19,522 9%
4 4 secondary schools.
● Rs 150 crore has been
allocated towards the
Odisha Higher Education
Programme for
Excellence and Equity.
KALIA scheme.
Agriculture ● Crop loans of up to one
and allied 5,926 8,328 8,517 12,955 52% lakh rupees will be
activities provided interest free. A

sum of Rs 800 crore is
proposed for providing
the interest subsidy.
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● A corpus fund of Rs 500
crore will be created to
facilitate timely wage
Rural payments under

11,55
Developme 9,018 10,770 12,139 5% MGNREGA.
2
nt ● Rs 580 crore has been
allocated under the
Deen Dayal Antyodaya
Yojana.
allocated for relief for
Social
natural calamities.
Welfare
5,245 8,150 7,485 11,251 50% ● Rs 2,120 crore has been
and
Nutrition
Madhubabu Pension
Yojana.
Water 5,860 7,163 7,812 10,803 38% ● Rs 2,740 crore has been
Supply, allocated for rural water
Sanitation, supply and Rs 385 crore
Housing for urban water supply.
and Urban ● Rs 2,500 crore and Rs
Developme 300 crore has been
nt allocated for the rural
and urban component of
Swachh Bharat Mission,
respectively.
allocated towards rural
housing through
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convergence of PMAY
Gramin and Biju Pucca
Ghar. Rs 400 crore
towards urban housing.
allocated towards
10,20 PMGSY. Rs 500 crore

Transport 9,372 9,409 9,095 -11%
8 has been allocated
towards the Biju Setu
Yojana.
Health and ● Rs 1,203 crore has been
Family 4,927 6,097 6,132 6,804 11% allocated towards Biju
Welfare Swasthya Kalyan Yojana.

allocated for
construction of buildings
Police 2,972 3,242 3,344 3,571 7%
for courts, police, fire
services, jails, and police
modernisation.
Energy 2,095 1,842 1,980 2,018 2% allocated towards

electricity for all.
15
EDUCATION SECTOR IN VIEW OF THE ODISHA BUDGET
In the Odisha Budget 2019-20, highest allocation of Rs.20,714 crore has been made for
Agriculture and allied sectors, followed by Rs.18,419 crore for Panchayati Raj Department and
Rs.16,400 crore for School & Mass Education Department. The amount allocated for Higher
15
‘Odisha Budget Analysis’, PRSindia <https://prsindia.org/parliamenttrack/budgets/odisha-budget-analysis-2019-
20> accessed 21 August 2019
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Education is Rs.2375.34 crore.16 Some of the other allocations made in the education sector
under the Budget 2019-20 are:
● ₹300 crore is provided under Odisha Adarsha Vidyalaya to meet the establishment and
running the schools.
● ₹2,550 crore is provided for Samagra Sikshya and ₹844 crore for Mid‐day Meal Scheme
all of which will have a State share of 40 per cent.
● In addition, ₹375 crore is provided towards State’s support to Samagra Sikshya for
implementation of Samagra Sikshya and ₹58 crore is provided as cooking cost for the
Mid‐day meals.
● Allocation for ₹239 crore is made under the Gangadhar Meher Sikhya Manakbrudhi
Yojana (GMSMY) to provide school bags to all children from Class‐I to V, free text books
and school uniform including shoes to all children from Class‐I to VIII and free bicycles to
all students reading in Class‐IX of Government and Government aided schools, Sanskrit
Tols and Madrasas. 17
● A sum of ₹40 crore is provided under Mo School Abhiyan for infrastructure
development of schools. The Government will provide twice the amount donated by any
person for various purposes such as science laboratory, library, sports etc.
● ₹40 crore is provided for providing Laptop to meritorious students on their completion
of higher secondary education.
● ₹150 crore for infrastructure development of higher education institutions ϖ Allocation
of ₹225 crore is made under Rashtriya Uchatara Sikshya Abhiyan (RUSA) for improving
the overall quality of State higher education and Technical Education institutions.
● A sum of ₹190 crore is proposed for infrastructure development of Technological
Universities and Engineering Colleges, Engineering Schools and Polytechnics and ITIs.
In the Union budget 2019 the Finance Minister proposed a number of changes in the education
sector starting from introducing New National Education Policy and National Research
16
Odisha Sun Times Bureau, ‘Odisha Budget’19-20 pegged at Rs 1.39 lakh crore’, Odisha Sun times (Odisha, 25
August 2019) <https://odishasuntimes.com/odisha-budget-19-20-pegged-at-rs-1-39-lakh-crore/> accessed 22 August
2019
17
OB Bureau, ‘Highlights of Odisha Interim Budget 2019-20’, Odisha Bytes (Odisha, 7 February 2019)
<http://www.odishabytes.com/highlights-of-odisha-interim-budget-2019-20/> accessed 22 August 2019
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Foundation (NRF) to providing Rs 400 crore for World-Class Institutions. The major highlights of
the budget 2019 for education sector are:
● New National Education Policy

The policy proposes significant changes at both secondary and higher education levels
and lays greater focus on research and innovation.
● National Research Foundation (NRF)
The government has proposed to set up NRF that will help in the funding, coordination
and promotion of research in the country. The foundation will also assimilate
independent research grants given by different Ministries.
● World-Class Institutions
For the financial year, 2019-20, Rs 400 crore have been allocated to establish world-
class institutions in the country.
● Study in India Scheme
With an aim to make India a hub of higher education, the government has proposed
Study in India scheme. The scheme will help in getting foreign students to study in
Indian higher educational institutions.
● Higher Education Commission of India (HECI)
A draft legislation to establish HECI will be presented in 2019 to reform the regulatory
systems of higher education comprehensively, promote greater autonomy and focus on
better academic results.
● Value Added Skills
In order to prepare the youth of India for overseas jobs, increased focus will be laid on
enhancing globally valued skill-sets such as Big Data, 3D Printing, Virtual Reality,
Artificial intelligence & Robotics, and language training.18
Analysis of Odisha budget: Recent trends

Odisha had fared poorest among the 19 major States in spending on education vis-a-vis the
total budgeted expenditure. As per an analysis of the budget data available, the expenditure on
18
‘Highlights of Odisha Budget for Press Brief 2019-20’<https://finance.odisha.gov.in/Budgets/2019-
20/Vote_on_Account/Budget_Highlight_English.pdf> accessed 21 August 2019
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education in proportion to the total budget spending for the period of 2016-19 was around 14
per cent. The expenditure proportion for the successive years 2017-18, 2018-19 and 2019-20
interim was 15.5 %, 14.8 % and around 15.08%, respectively.
A look at the RBI data revealed that the proportion of education to total spending in Odisha had
nosedived post 2000-01 and continued till 2008-09. After a brief rise in 2009-11, the education
spending was again on the downslide till the year 2018-19. In the Interim Budget 2019-20, the
total allocation provisioned was Rs.19,911 crore. While the allocation for School and Mass
Education sector was Rs.16,400 crore, the Higher Education Department was allocated Rs.2,375
crore.19
However, the administrative expenditure accounted for around 60 per cent of the total
education expenditure in the State. The worry is such a high proportion of administrative
expenditure will in no way add to the quality of education services in the State. And the results
are simply disastrous. A whopping 78% of the elementary schools in Odisha are without
electricity connection. Despite so, during the period 2016-19, not a single school was brought
into the loop of electricity connection. The contrast on other hand is, nationally, a high of 61
per cent elementary schools have the privilege of power connection. Similarly, In comparison to
nearly 90 per cent electrification of secondary schools nationally, it is only 70% in Odisha. The
proportion in higher secondary stood at 93% to 87%.
Teacher vacancies: Though there is no teacher vacancy in elementary schools thanks to Sarva

Shikshya Abhiyan, the teacher vacancies in class 9 th and 10th were at a high of 1,033. As per
Rashtriya Madhyamik Shikshya Abhiyan (RMSA) for secondary schools, the total teacher and
headmaster vacancies in State’s secondary schools were at a whopping 4,919 in 2017-18. The
RMSA data shows Odisha is 5th in teacher vacancy and 6th in Principal vacancies in the country
SURVEY REPORT
A. SAMPLE
19
Finance Department, ‘Budget 2019-20 at a glance’ <https://finance.odisha.gov.in/Budgets/2018-
19/Annual_Budget/Budget_at_a_Glance_(Full).pdf> accessed 21 August 2019
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A thorough survey was conducted by the members of the team in order to analyze the conditions of the
government schools that were present in the vicinity. Our sample for the survey were the head
masters and faculty members of the 4 Government schools that were surveyed. All of them were
employed by the government.
The names of the schools are as following:-
1. Paramhansa Sanskruta Bidyapitha
2. Siddheshwar Nodal Primary School
3. Brajabiharipur Government Primary School
4. Bidya Bhusan Public School
B. DETAIL REPORT
I. Paramhansa Sanskruta Bidyapitha (School Timings: 9:30am to 4:00 pm)
Located at Naraj, Cuttack, the school had been functioning since 1976. The total strength of the school
was ‘130’ which included around ‘52’ boys and ‘51’ girls. There were 7 teachers including 1
guest lecturer. Every year around 30 students were enrolled. The salary of teachers along with
Maintenance charges for the campus were given by the government. Financial assistance was
provided to students from SC, ST and OBC background as shown below:-
Boys from classes 6th to 8th – Rs. 200
Girls from 6th to 8th – Rs. 300
Apart from ‘Mid Day Meal Scheme’ and supply of books and notebooks, there was no other provision
or policy for the students or faculty members. The school was provided assistance by the
‘Sarpanch’ of the village. The primary modes of teaching and communication were mainly Odia
and English.
II. Siddheshwar Nodal UP School
Established in 1936, the school was marked by a relatively bigger campus as compared to
others. The school comprised a total of 294 students with 154 girls and 143 boys. The strength
of the teachers remained extremely low at 8. Apart from the basic salary of the faculty and
staff, the school was provided with funding in the form of ‘improvement grants’ and ‘SC-ST
Stipend’. Apart from class 8th, all the other class students had to sit on floor. The school was
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given assistance by ‘Akhya Patra Foundation’. Mid-day meal scheme was also executed in the
school.
III. Brajabiharipur Government Upper Primary School
Functioning since 1956, the school was marked by the strength of only 77 students. Around 10
students were enrolled every year. The Girls: Boys ratio came down to 36: 31. A total of 5
teachers were employed which had only 1 science teacher. The government’s assistance was
given in the form of ‘Repairing and Maintenance Funding.’ Additionally, uniform and books
were also given to the students by the government. Though the salary was provided to the
teachers, there were no specific provisions or scheme to incentivize the same. The school
witnessed inspection by the government officials once in a year. Other important facilities such
as washroom and drinking facilities were present within the campus.
IV. Bidya Bhushan Schoo
Placed at Naraj, Cuttack, the school had been functioning since 1980. The total strength of the
school was ‘120’ roughly which included around ‘60’ boys and ‘56’ girls. There were 10 teachers
including 1 guest lecturer. Every year around 30 students were enrolled. The salary of teachers
along with Maintenance charges for the campus were given by the government. Barring ‘Mid
Day Meal Scheme’ and supply of books and notebooks, there was no other provision or policy
for the students or faculty members. The school was provided assistance by the ‘Sarpanch’ of
the village. The primary modes of teaching and communication were mainly Odia, Hindi and
English.
C. QUESTIONNAIRE
1. What is the Name of the Institution?
2. What is the Total Number students including Girls: Boys Ratio?
3. What is the enrollment ratio?
4. What is the total number of the teachers?
5. What is the primary mode of communication in the institution?
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6. What is the monthly/quarterly/annual fee of the institution?
7. Are there any particular incentive/scheme for the faculty members?
8. What are the various means of financial assistance?
9. Whether the government provides any specific funds to the Institution?
10. Are there any other schemes (e.g. Mid Day Meal Scheme) currently followed in the
institution especially after Union Budget 2019.
11. If there are any suggestions from the Institution’s side that could bring about positive
changes?
D. OBSERVATION REPORT
As per the Odisha Budget for the year 2019-20, has been pegged at Rs 1.39 lakh crore. Out
of this, Rs 16,400 cr has been allotted for School & Mass Education Department. Rs 2,550 cr
is provided for Samagra Sikshya and Rs 844 crore for Mid-day Meal Scheme all of which will
have a State share of 40 per cent. Rs 300 cr is provided under Odisha Marsha Vidyalaya to
meet the establishment and running the schools. Ironically, the big figures in the
budget portrayed a different picture if one saw the real conditions in the school buildings.
Allocation for Rs 239 cr is made under the Gangadhar Meher Sikhya Manakbrudhi Yojana
(GMSMY) to provide school bags to all children from Class-I to V, free textbooks and school
uniform including shoes to all children from Class-1 to VIII and free bicycles to all students
reading in Class-IX of Government and Government aided schools, Sanskrit Tots, and
Madrasas. While books and notebooks were provided to the students, additional sources
such as worksheets, regular exercise books were not given that created a hindrance in the
development of children.
Further, a sum of Rs 140 cr is provided under Mo School Abhiyan for infrastructure

development of schools. The Government will provide twice the amount donated by any
person for various purposes such as science laboratory, library, sports, etc. This came across as
a stark contrast to the real conditions as all the 4 schools that were surveyed primarily faced
the issue of lack of infrastructure. Most of the schools lacked a playground or a clean
washroom. The infrastructure also lacked with respect to the provision of table and chair. In
38 | Page
ECONOMICS PROJECT
neither of the schools, did we observe the presence of adequate infrastructure.
CONCLUSION
The Union Budget presented with a 10 year vision has its merits and demerits. The vision,
although far-fetched, seems optimistic and beneficial for the country. The Budget indeed makes
few populist promises, but refrains from having any frivolous or extravagant expenditure
outlay. Even if the government does not get re-elected, it will be difficult for the new
government to completely reverse the proposals.
This Research Paper included a survey (a sample questionnaire and observational report)
conducted at public government-funded schools of Cuttack, Odisha and found out whether or
not they receive any funds from government and if yes, how much and whether or not on
regular basis. The shortcomings of the allocations and the other needed requirements for
development were also catered to. The positive interaction with the headmaster of school and
the kids helped us understand the grievances and where the budget and the schemes and lack
in providing quality education for all, as promised.
Our secondary source analysis on the highlights of the budget keeping Education, Health,
Infrastructure, and Agriculture, critically examining the good and the bad and relating it to
study fiscal prudence in the Union Budget. The Research paper also dealt with the Odisha
Budget and its key highlights focussing on Education as our survey was based majorly on that
sector.
The literature review presents a compiled study of articles on fiscal prudence and policies in
India majorly focussing on the Union Budget. It also presents Gap or issues in the study and
remarks on how they could be overcome.
In conclusion, the Union Budget 2019 aims to take the Indian economy to the $5-trillion mark,
empower women, start-ups, farmers and agriculture. With reference to the infrastructure
39 | Page
ECONOMICS PROJECT
sector, the Government has reaffirmed its commitment to set goals and schemes initiated by
integrating state government participation to develop the road network. And in the context of
Education sector, a new education policy, and that higher education in the country will be
reformed comprehensively. Efforts will be made to bring in foreign students under a Study in
India plan.
40 | Page

Fiscal Prudence and Human Development Budget Analysis

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ECONOMICS PROJECT

FISCAL PRUDENCE AND HUMAN DEVELOPMENT

OBJECTIVES OF THE PROJECT 6

UNDERSTANDING HUMAN DEVELOPMENT IN VIEW OF UNION BUDGET 2019:

KEY OBSERVATIONS ON ODISHA BUDGET: A PERSPECTIVE FROM THE

EDUCATION SECTOR IN VIEW OF THE ODISHA BUDGET 32

OBJECTIVES OF THE PROJECT

FISCAL POLICY RULES IN INDIA

On a broad generalization, excessive printing of money leads to inflation. If the government

3. To promote necessary development in the private sector through fiscal incentive;

4. To arrange an optimum utilisation of resources;

5. To control the inflationary pressures in economy in order to attain economic stability;

6. To remove poverty and unemployment;

8. To reduce regional disparities; and

9. To reduce the degree of inequality in the distribution of income and wealth.

FISCAL PRUDENCE AND POPULISM

INCLUSIVE GROWTH WITH FISCAL PRUDENCE

The demonstration of fiscal prudence was accompanied by according importance to reviving

FISCAL PRUDENCE AND GROWTH

FISCAL PRUDENCE AND AUSTERITY

UNDERSTANDING HUMAN DEVELOPMENT IN VIEW OF UNION BUDGET 2019: ANALYZING KEY

KEY FEATURES OF EDUCATION SECTOR

New Education Policy

National Research Foundation (NRF)

Study in India Scheme

Khelo India Scheme

Value Added Skills

KEY FEATURES OF HEALTH SECTOR

Ayushman Bharat- Pradhan Mantri Jan Arogya Yojna (AB-PMJAY)

National Health Mission

KEY FEATURES OF INFRASTRUCTRE

Union Budget 2019 Infrastructure Highlights

which aims to improve the railway infrastructure between 2018 – 2030.

● There has been an improvement in the operating ratio by 95% in 2019-20.

Key Observations on Odisha Budget: A Perspective from the Education Sector

Biju Swasthya Kalyan Yojana (BSKY), another flagship programme of the Odisha

● Madhubabu Pension Yojana (Rs 2,120 crore),

14,53 17,89 towards government

Agriculture ● Crop loans of up to one

activities provided interest free. A

Rural payments under

10,20 PMGSY. Rs 500 crore

Health and ● Rs 1,203 crore has been

Family 4,927 6,097 6,132 6,804 11% allocated towards Biju

Welfare Swasthya Kalyan Yojana.

Energy 2,095 1,842 1,980 2,018 2% allocated towards

EDUCATION SECTOR IN VIEW OF THE ODISHA BUDGET

● New National Education Policy

Analysis of Odisha budget: Recent trends

Teacher vacancies: Though there is no teacher vacancy in elementary schools thanks to Sarva

II. Siddheshwar Nodal UP School

III. Brajabiharipur Government Upper Primary School

IV. Bidya Bhushan Schoo

Further, a sum of Rs 140 cr is provided under Mo School Abhiyan for infrastructure

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