The Reserve Bank of India's (RBI) latest statistical handbook offers a crucial, yet incomplete, snapshot of how Indian states are funding health, education, and welfare. While absolute expenditures have skyrocketed, a deeper analysis reveals a worrying trend: the share of state budgets dedicated to these critical sectors is shrinking in many regions, raising questions about the true progress being made.
The Illusion of Rising Expenditure
The RBI Handbook of Statistics on Indian States 2024-25 shows nominal social sector spending has reached unprecedented levels. Uttar Pradesh, for instance, increased its outlay from ₹16,932 crore in 2004-05 to a budgeted ₹2,87,847 crore in 2024-25—a staggering 1600% rise. Maharashtra followed with an 1183% increase, from ₹20,433 crore to ₹2,62,178 crore in the same period.
However, these headline figures tell only part of the story. When examined as a proportion of total state expenditure, the picture changes dramatically. In several states, the budget share for social sectors has declined over time. Karnataka, a top economic performer, exemplifies this shift. Its allocation for education fell from 13.1% of total spending in 2018-19 to just 11% in 2023-24, notably below the 14.7% state average for that year.
Outcome Data Reveals Disturbing Trends
Increased spending has not uniformly translated into better outcomes. The handbook highlights regressions in key health indicators, complicating the narrative of progress. Chhattisgarh, along with Odisha, Bihar, Uttarakhand, Gujarat, Telangana, and Andhra Pradesh, saw its Maternal Mortality Ratio (MMR) increase from 141 (2015-17) to 146 (2021-23).
Alarmingly, even Kerala, a consistent leader in health metrics, recorded a rise in MMR from 18 (2020-22) to 30 (2021-23). While still below the national average, this increase is significant. Furthermore, data shows 12 out of 20 states listed have an MMR higher than the Sustainable Development Goal target of 70.
The Problem of Skewed Indicators and Hidden Disparities
Experts argue the RBI handbook's selection of social welfare indicators presents a skewed picture. Reported improvements often coexist with severe intra-state inequalities in access and results. For example, Rajasthan's minor improvement in MMR (87 to 86) exists alongside a 39% shortfall in Urban Primary Healthcare Centres, as per Rural Health Statistics 2021.
Similarly, while Odisha's overall Infant Mortality Rate (IMR) fell, National Family Health Survey (NFHS) data reveals its urban IMR increased from 21 to 31 between survey rounds—a detail not captured in the RBI's aggregated state-level data. This lack of rural-urban disaggregation and sub-state data masks critical disparities.
Call for Richer, More Actionable Data
Analysts Priyadarshini Singh and Anoushka Gupta from the Centre for Social and Economic Progress (CSEP) advocate for enhanced data in future RBI publications. They propose three key improvements:
- Disaggregate state-level data into rural and urban categories to guide targeted policy interventions.
- Include incisive indicators like government vs. private school enrolment and healthcare facility uptake from primary to tertiary levels.
- Represent intra-state disparity by showing the range between the best and worst-performing districts for each key indicator.
The RBI handbook remains an indispensable fiscal resource. However, as social sector budgets expand, the limitations of aggregate data become stark. The next phase of scrutiny must move beyond how much states spend to interrogate what that spending delivers, where it is directed, and who it ultimately benefits. Without clarity on expenditure composition, spatial distribution, and tangible outcomes, rising allocations risk perpetuating an illusion of progress rather than delivering equitable development.
