TN's social sector spending up to ₹1.23 lakh in 2021-22: RBI stats

Tamil Nadu’s social sector spending increased from a meagre ₹13,616 crore in 2003-04 to ₹1.23 lakh crore in 2021-22, as per the latest Reserve Bank of India statistics on state finances, based on the respective budgets presented over the years.

The social sector spending includes provision for free rice and other welfare measures undertaken by the two Dravidian parties in the state.

In the revised budget of 2020-21, the state government said that ₹1,16,829 crore will be spent on the social sector. But the 2021-22 budget estimated that the expenditure under the social sector will be ₹1,49,151 crore, an increase of 27.6 per cent in a single year.

Under the social sector spending, urban development took the majority share of ₹69,398.81 crore, followed by water and sanitation with a share of ₹35,564.29 crore, and health and family welfare getting the third maximum share of ₹27,065.87 crore.

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The share for medical and public health has increased in the last two years due to COVID-19. In 2019-20, the share of medical and public health under the social sector was ₹4,626.31 crore but increased to ₹25,875.33 crore in 2020-21 revised budget.

“The government of Tamil Nadu incurred additional expenditure of ₹17,618.8 crore on COVID-19 related relief, including cash support and additional food subsidies,” said the RBI report on state’s budgets.

Another head of social security and welfare has also seen a huge increase in the last two years.

While in the revised budget for 2021-22, the total spending under social security and welfare was expected to be ₹227.80 crore, a total of ₹609 crore has been allocated under the head.

A senior official of the Tamil Nadu government hinted that the State’s “unique position,” in respect of certain subsidy schemes, has not been brought out adequately in the study.

“No other state is making the pay-out as Tamil Nadu does. Food subsidy accounts for around ₹11,500 crore and power subsidy ₹9,000 crore. As for old age pension, beneficiaries in Tamil Nadu are getting a higher amount than their counterparts in other states,” the official said.

The RBI report says that state’s total expenditure is budgeted to increase moderately in 2021-22. This expenditure growth is expected to be driven by capex, while revenue spending (as a per cent of GDP) will be compressed.

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States have also budgeted a higher capital outlay in 2021-22 (BE) vis-à-vis 2020-21(RE), mainly in social services. As a result of the need to upscale health infrastructure in the face of the multi-year nature of pandemic, higher spending is budgeted in medical and public health.

Capex outlays have also been increased for urban development, water supply and sanitation, irrigation and transport.