Since the 1991 reforms, India shifted to a market-oriented growth model. Public expenditure on social services increased from 5% of GDP (1990s) to 8% (2024-25)
Trend of Public Expenditure on Social Services in the Post-Reforms Period
Early Post-Reform Phase (1991-2005)
Low and stagnant spending around 5% of GDP due to fiscal consolidation.
Prioritisation of basic education – expansion of SSA, mid-day meal.
Health expenditure remained low at 1% of GDP, high OOPE.
Rights-Based Expansion Phase (2005-2015)
Public expenditure rose to 6-7% of GDP.
Introduction of major rights-based entitlements: MGNREGA (2005), RTI, RTE (2009), NFSA (2013).
Focus on rural livelihood missions, inclusion programmes. Eg- DAY-NRLM
Post-2015 Period
Social sector spending increased to 8% of GDP (2021-22).
Health spending reforms – decline in OOPE from 65% to 40% (2014-2024).
Women Specific schemes: Eg- Ujjwala (10 crore LPG connections)
Emphasis on social security. Eg- e-Shram, PM Garib Kalyan Anna Yojana.
Increased focus on skill development, digital inclusion. Eg- JAM Trinity, PM-KVY
In consonance with Inclusive Growth
Extreme poverty fell from 16.2 % in 2011-12 to just 2.3 % in 2022-23
MGNREGA, NFSA ensured income security and food security (67% population coverage).
Human Capital Improvement – Life expectancy increased from 58 years (1990) to 73 years.
Regional Inclusion – Aspirational Districts improved health, education, and infrastructure indicators in 112 lagging districts.
Women Empowerment – Eg- 45% women representation in PRIs
Limitations and Challenges
Rural-Urban Divide Persists – Urban per capita income is 2x rural.
Only 24-25% of the population has any formal social protection.
Poor Learning Outcomes
50% of Class 5 students cannot read Class 2 text (ASER).
50% of graduates are employable only (India Skills Report).
Low Public Health Spending – Still around 1.9% of GDP, below the global average of 6%.
Inclusion-Exclusion errors and Leakages in PDS.
High Inequality – Top 10% hold 77% of national wealth (Oxfam).
Capability Approach (Amartya Sen) by increasing Education and health spending to 6% and 2.5% of GDP respectively is needed for ‘Sabka Saath, Sabka Vikas.’