The 2023-2024 budget will likely emphasize the social sector and health and education schemes, two public goods that have huge multiplier benefits for human capital and economic growth, sources told FE.

It will also prioritize spending on rural economic recovery programs and maintenance of rural roads.

Upgrading police stations is likely to be another key area to reduce reliance on the military or central paramilitary forces for internal security.

With the Covid pandemic exposing the country’s weak public health infrastructure, the Center will likely channel more capital investment into primary health centers, district hospitals, wellness centers and national ambulance infrastructure . Measures will also likely be announced to address the shortage of health personnel.

In order to provide health insurance to vulnerable sections, the Center introduced the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) in 2018. It provides up to Rs 5 lakh per family per year to 500 million people or 40 % of the population at the bottom of the pyramid. Its coverage will be further expanded.

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Public expenditure on health – shared between the Center and the States at a ratio of 3:7, is still less than 2% of GDP in India, well below that of comparable countries like Indonesia and China.

According to World Bank data, India’s general government health expenditure (per capita, in purchasing power parity terms) was just $69.2 in 2019, well below the global average of $865.7. In China, these expenses amounted to 492.7 dollars.

Urging the Center to spend more on health care, the 15th Finance Commission had recommended that India’s government health expenditure should increase to 2.5% of GDP by 2025. The Center planned to spend around Rs 86,000 crore in FY23, up slightly from Rs 84,000 crore in FY22.

Education, another critical area, receives about 3% of GDP as combined central and state funding, which is well below the average for developed countries. About 84% of total education expenditure is made by states.

The Center will probably allocate more funds for school and higher education next year. One of the priority areas would be the PM Schools Development Program for Rising India (PM-SHRI), with all modern learning and training facilities, sources said.

Besides low investment, the education system faces various challenges such as inadequate teacher training, teacher vacancies and absenteeism, and an ineffective regulatory regime. The Center will focus on implementing the national education policy to address many of the above challenges, sources said.

The Centre’s budget estimate for the education sector is Rs 1.04 trillion for FY23, about 20% more than the Rs 80,000 crore spent in FY22.

With law and order becoming a major problem in many parts of the country, the Center will increase funding for the modernization of the state’s police force.

Additional funds would boost the police infrastructure to state-of-the-art level through the construction of secure police stations, training centers, modern weaponry, communication equipment and forensic facilities, among others.

The Center planned to spend 1.18 trillion rupees on the police, mainly central paramilitaries, in FY23, compared to 1.06 trillion rupees spent last year.