Are better human development outcomes the result of more public spending? Does the quality of spending matter, or can we make up for poor spending quality by throwing more money at the job? What has been the Indian experience? Unfortunately, there is little to go by. In the absence of data linking measurable outcomes to outlays, financial journalists like this columnist have often been forced to rest content with analysing Budget numbers while rating government performance. But such analyses suffer from a major drawback.
They are essentially theoretical exercises , limited to numbers on paper. When in reality the most meaningful analysis of government performance is not in cold numbers but what these numbers translate into by way of outcomes for people. After all, that is the whole purpose of the Budget exercise. That was also the genesis of the 'Outcome Budget' introduced by the former finance minister P Chidambaram in February 2005.
Warning "outlays do not necessarily mean outcomes" , he promised to put in place "a mechanism to measure the development outcomes of all major programmes" . Well said! Except that over the years, Outcome Budgets have not been of much help. They do not shed light on whether the end-objective of government spending - has life become better for the aam janta, are they better educated , do they live longer, is there better gender-balance , etc - has been served.
Of course, the 2011 Census data does suggest life has got better for all of us on most of these parameters. Sex ratios (bar in the 0-6 years' age group) have improved, female literacy is up, as is longevity . But is this improvement the result of government spending priorities ? Can differences between states be explained by variations in inter-state spending priorities?
This is where linking Census numbers with data from the Reserve Bank of India's (RBI) latest study on state finances shatters some myths and offers some interesting insights. Thus, contrary to widespread belief, Kerala's spending on the social sector is not the highest among states.
Not only does it rank below states like Rajasthan, Bihar and Maharashtra, its spending has come down in the decade to 2011. Also, the improvement in human development indicators is not so much the result of providence or faster economic growth but the outcome of an across-the-board increase in the share of social sector expenditure in total expenditure in almost all states.
The Centre may claim the aam aadmi slogan for itself, but states seem to have imbibed the same spirit. Thus, the share of social sector expenditure has increased, both as a percentage of GDP and as a percentage of total expenditure .
Such expenditure averaged just 5.8% of GDP in the period 1990-95 but increased to 6.4% by 2009-10 . As a percentage of total expenditure too, the share of social sector expenditure rose from 36.8% in 1990-95 to 39.1% by 2009-10 . But in a country as diverse as India , any study that looks at the aggregate picture is bound to conceal more than it reveals .
A more granulated look at state-wise performance on human development indicators and governments' spending priorities throws up some unexpected conclusions. Punjab's continuing adverse sex ratio, for instance, has long puzzled observers.
They are essentially theoretical exercises , limited to numbers on paper. When in reality the most meaningful analysis of government performance is not in cold numbers but what these numbers translate into by way of outcomes for people. After all, that is the whole purpose of the Budget exercise. That was also the genesis of the 'Outcome Budget' introduced by the former finance minister P Chidambaram in February 2005.
Warning "outlays do not necessarily mean outcomes" , he promised to put in place "a mechanism to measure the development outcomes of all major programmes" . Well said! Except that over the years, Outcome Budgets have not been of much help. They do not shed light on whether the end-objective of government spending - has life become better for the aam janta, are they better educated , do they live longer, is there better gender-balance , etc - has been served.
Of course, the 2011 Census data does suggest life has got better for all of us on most of these parameters. Sex ratios (bar in the 0-6 years' age group) have improved, female literacy is up, as is longevity . But is this improvement the result of government spending priorities ? Can differences between states be explained by variations in inter-state spending priorities?
This is where linking Census numbers with data from the Reserve Bank of India's (RBI) latest study on state finances shatters some myths and offers some interesting insights. Thus, contrary to widespread belief, Kerala's spending on the social sector is not the highest among states.
Not only does it rank below states like Rajasthan, Bihar and Maharashtra, its spending has come down in the decade to 2011. Also, the improvement in human development indicators is not so much the result of providence or faster economic growth but the outcome of an across-the-board increase in the share of social sector expenditure in total expenditure in almost all states.
The Centre may claim the aam aadmi slogan for itself, but states seem to have imbibed the same spirit. Thus, the share of social sector expenditure has increased, both as a percentage of GDP and as a percentage of total expenditure .
Such expenditure averaged just 5.8% of GDP in the period 1990-95 but increased to 6.4% by 2009-10 . As a percentage of total expenditure too, the share of social sector expenditure rose from 36.8% in 1990-95 to 39.1% by 2009-10 . But in a country as diverse as India , any study that looks at the aggregate picture is bound to conceal more than it reveals .
A more granulated look at state-wise performance on human development indicators and governments' spending priorities throws up some unexpected conclusions. Punjab's continuing adverse sex ratio, for instance, has long puzzled observers.
