Pushing welfare towards the States, Pg11

Key Highlights:

• Budget 2026-27 lacks new flagship schemes for the social sector, continuing a trend of low allocations for vulnerable populations.
• Allocations for critical schemes like NSAP, SAMARTHYA, PALNA, PM POSHAN, and Saksham Anganwadi show minimal nominal increases (0.2% to 5.2%).
• Revised Estimates (RE) for 2025-26 are lower than Budget Estimates (BE) for most social sector schemes, indicating underspending.
• Central Government is shifting the burden of welfare spending to State Governments, while reducing financial support.

Detailed Insights:

• Low allocations persist in health and education, with increases of only 6.4% and 8.3% respectively, and revised estimates falling below budget estimates.
• Significant underspending is observed in centrally sponsored schemes (CSS), with allocations dropping from ₹5,41,850 crore (2025-26 BE) to ₹4,20,078 crore (RE).
• The budget prioritizes capital expenditure (capex) exceeding ₹12 lakh crore, but its effectiveness in creating employment remains unassessed.
• States' share in total tax revenue receipts is approximately 34%, falling short of the 41% recommended by the Finance Commission, due to increased cesses and surcharges.
• Finance Commission grants to States have slightly decreased from ₹1,32,767 crore in 2025-26 BE to ₹1,29,397 crore in 2026-27 BE.
• The Centre continues to influence the welfare agenda through legislation and norm-setting, even as States bear a larger share of the financial burden.

Key Concepts Involved:

• Centrally Sponsored Schemes (CSS): Programs funded by the central government but implemented by states.
• Budget Estimate (BE): Projected government spending for the upcoming fiscal year.
• Revised Estimate (RE): A mid-year review of actual government spending, often differing from the initial budget estimate.