It looks like Kerala is quickly losing out to other states in an area where it was perennially considered a model: social welfare spending.
That Kerala's status as the country's pre-eminent welfare state has long taken a beating was revealed in Reserve Bank of India's latest study 'State Finances: A Study of Budgets of 2022-23'.
Kerala's social sector expenditure in 2004-05, which was 36.2 per cent of its total expenditure, was the fourth highest in the country.
Only the toddler states of Chattisgarh and Jharkhand, which were formed in 2000 specifically to improve social sector spending, had better figures: Chattisgarh (37.7 per cent) and Jharkhand (44 per cent). The small north eastern state of Tripura, too, had spent more – 37.6 per cent.
Kerala was then the paragon of welfarism.
Socially awkward trend
A decade and a half later, by 2020-21 – authentic figures are available only till then – Kerala's rank fell steeply to 21. Now, almost all other states spend more on social services than Kerala.
Take for instance Andhra Pradesh. In 2004-05, its spending on social services was just 29.3 per cent, one of the worst in the country. By 2020-21, it shot up to 46.4 per cent.
Bihar's turnaround was more dramatic. In 2004-05, it was 30.5 per cent. By 2020-21, more than half the state's budget was set apart for social sector spending: 52.1 per cent. After National Capital Territory (NCR) of Delhi (53.7 per cent), this is the highest social sector spending in the country.
Madhya Pradesh and Sikkim, states with the worst spending in 2004-05 –- 24.7 and 22.2 per cent respectively –- propelled their social sector spending to 45.3 and 39.8 per cent respectively in 2020-21.
Kerala's social sector spending had also increased in nearly two decades, but only marginally; from 36.2 per cent in 2004-05 to 38.7 per cent in 2020-21.
Spending on social services will generally cover these areas: education, health, family welfare,water supply and sanitation, housing, urban development, SC/ST welfare, social security, and nutrition.
Fall in education standards
However, it is the fall in education spending that will have a bearing on Kerala's future.
Kerala's expenditure on education has not even stagnated in the last one-and-a-half decades. It has fallen. From 16.6 per cent in 2004-05, it dropped to 11.4 per cent in 2020-21.
This alarming contraction can be rationalised as a COVID-induced fall in spending. In fact, many states recorded a fall in education spending during 2020-21 when compared to 2019-20.
States like Gujarat, Maharashtra, Bihar, Karnataka, Madhya Pradesh, and Telangana showed a marginal decrease in spending during COVID. But there were states like West Bengal, Odisha, Punjab and Rajasthan that had upped education spending during COVID.
Even if it is conceded most states had spent less on education during COVID, no other state had recorded as steep a drop in spending between 2019-20 and 2020-21 as Kerala. From 15.2 per cent, it fell to 11.4 per cent. In short, a cut in Kerala's education spending was considerably more than what was necessitated by the COVID shutdown.
In 2004-05, Kerala was the fifth largest spender on education (16.6 per cent) after Assam (20.8), Bihar (19.6), Rajasthan (17.2), Uttarakhand (17.2). By 2020-21, its rank fell to a lowly 26, an absolute reversal.
From being the fifth best spender, Kerala dropped low to become the fifth worst spender on education among 31 states and union territories in India.
Sinking health
There is not much cheer in public health spending, too. In 2004-05, by spending 4.9 per cent of its total expenditure, Kerala was the eighth highest spender on public health.
In the subsequent nearly two decades, Kerala had increased its spending on public health quite commendably to 5.9. Still, by 2020-21, Kerala has been pushed down to the 13th position.
COVID conundrum
Such a comparative fall in health and welfare spending took place even after the generous dole out during COVID.
In 2020-21, after COVID struck, Kerala had increased its social services expenditure by Rs 9,819.61 crore from the previous fiscal. This was mostly spent on social security and welfare. The expenditure under Medical and Public health also recorded an increase of Rs 1,342.13 crore in the pandemic period.
As it turns out, other states have outspent Kerala in providing social and welfare services.
