Institute for Policy Research Studies 3rd Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi - 110 002 Tel: (011) 4343-4035, 2323-4801 
www.prsindia.org 

## Contributors:

Prachee Mishra Alaya Purewal Niranjana S Menon Omir Kumar Pratinav Damani Saket Surya Siddharth Mandrekar Rao Tanvi Vipra Tushar Chakrabarty 

## Table Of Contents

Overview .................................................................................................................................................. 1 Union Budget  .......................................................................................................................................... 3 
Receipts Highlight ................................................................................................................................................................. 6 Expenditure Highlights .......................................................................................................................................................... 7 
Defence ................................................................................................................................................. 12 Road Transport and Highways .............................................................................................................. 21 Railways ................................................................................................................................................ 30 Food and Public Distribution .................................................................................................................. 41 Home Affairs .......................................................................................................................................... 53 Rural Development ................................................................................................................................ 64 Agriculture ............................................................................................................................................. 72 Education ............................................................................................................................................... 86 Telecommunications .............................................................................................................................. 97 Jal Shakti ............................................................................................................................................. 104 Health and Family Welfare .................................................................................................................. 116 Housing and Urban Affairs ................................................................................................................... 124 Peteroleum and Natural Gas ............................................................................................................... 138 Women and Child Development .......................................................................................................... 146 
Environment ........................................................................................................................................ 159 


## Overview

The central government's expenditure is presented and authorised by Parliament through the Union Budget every financial year.  Article 113 of the Constitution requires all expenditure (except charged expenditure) to be submitted in the form of Demands for Grants (Ministry-wise) to Lok Sabha.  The Demands for Grants are referred to the Ministries' respective Departmentally-Related Standing Committee for further examination. Following this, they are discussed in Lok Sabha and approved.  After Lok Sabha's authorisation of the demands, an Appropriation Bill is introduced and passed to permit expenditure out of the Consolidated Fund of India. This document contains a short analysis of the Union Budget for 2023-24, and an assessment of the allocations made by 15 ministries, which account for 72% of the total union budget.  This includes an analysis of key trends in expenditure, various schemes being implemented, and key sectoral issues. The Union Budget 2023-24 was presented on February 1, 2023 by the Finance Minister Ms. Nirmala Sitharaman.  It proposes to spend Rs 45,03,097 crore in the financial year.  Out of the total expenditure, revenue expenditure is estimated to be Rs 35,02,136 crore (1.2% increase from revised estimates of 2022-23).  Interest expenditure is 41% of revenue receipts.  Capital expenditure is estimated to be Rs 10,00,961 crore, a 37.4% increase from revised estimates of 2022-23.  The increase in capital expenditure is driven by higher outlay on transport infrastructure and capital loans to states.  Revenue deficit in 2023-24 is targeted at 2.9% of GDP, which is lower than the revised revenue deficit of 4.1% in 2022-23.  Fiscal deficit in 2023-24 is targeted at 5.9% of GDP, lower than the revised fiscal deficit of 6.4% in 2022-23. Under the Finance Bill, 2023, a number of changes have been made to the new tax regime.  The income limit to avail a rebate and not pay any taxes has increased from Rs 5 lakh to Rs 7 lakh.  Further, the number of tax slabs have been reduced from six to five.  The surcharge for the highest slab (income over Rs 5 crore) has been cut from 37% to 25%. The highlights of expenditure of various ministry/department include the following:  
Defence: The Ministry of Defence has been allocated Rs 5,93,538 crore which is the largest across all ministries and accounts for over 13% of the total expenditure of the central government.  Over the last decade, the expenditure of the Ministry as a percentage of GDP has reduced.  In 2023-24, its allocation is estimated to be marginally lower than 2% of GDP.  Since 2014-15, the spending on defence pension has been consistently higher than 20% of the total budget and capital outlay has remained below 30% of the budget.  
Road Transport and Highways: The Ministry has been allocated Rs 2,70,435 crore, 25% higher than the revised estimates of 2022-23.  Most of the additional allocation (60%) has been earmarked for investment in NHAI.  Budgetary allocation has increased since NHAI will not borrow from the market.  Construction of roads is primarily done through public funds.  Private investment constituted 7% of investment in roads in 2020-21. 

Railways: In 2023-24, Railways is projected to have a marginal revenue surplus, which would fund less than 
1% of its capital expenditure plan.  92% of capital expenditure will be funded by budgetary support from the central government, and 7% from extra budgetary resources.  The operating ratio (expenditures as proportionate to traffic works receipts) is 98.5%, indicating limited surplus for capital investment.  
Food and Public Distribution: Allocation for the Department in 2023-24 was 31% lower as compared to the revised estimate of 2022-23.  This was due to the discontinuation of the Pradhan Mantri Garib Kalyan Anna Yojana that was announced during the pandemic to provide free foodgrains to eligible beneficiaries.  In 2023- 24, expenditure on food subsidy is estimated to be Rs 1.97 lakh crore.  Updating the coverage of eligible families is an issue as the total number of beneficiaries continues to be based on the 2011 Census.  
Home Affairs: The Ministry has been allocated Rs 1,96,035 crore, an increase of 1.1% over the revised estimates for 2022-23.  Of the Ministry's total budget, 65% of the expenditure is on police and 31% is on grants to UTs.  74% of the expenditure on police has been allocated to the Central Armed Police.  Issues in the sector include shortages of police personnel and inadequate number of cybercrime cells.  24% of the Indo-Bangladesh border remains unfenced.  
Rural Development:  The Ministry of Rural Development was allocated around Rs 1.6 lakh crore for 2023-24, 
12% less than the revised estimates of 2022-23.  This is largely due to the decrease in allocation towards the Mahatma Gandhi National Rural Employment Guarantee Scheme (Rs 60,000 crore), which is 33% less than revised estimate for 2022-23.  Demand for work under MGNREGS could decrease this year, as the rural economy returns to normal after the pandemic.  Allocation towards rural housing increased by 13% in 2023-24, while allocation towards rural roads remained unchanged.   
Agriculture: The Ministry has been allocated Rs 1,25,036 crore in 2023-24, a 5% increase over the revised estimates of 2022-23.  77% of the Ministry's estimated expenditure is towards three schemes that provide cash transfer, interest subsidy, and crop insurance.  The amount of institutional credit to farmers has risen (7.8% over the past ten years), but loans are primarily being used to meet revenue expenditure in farming or recurring household expenditure. 

Education: In 2023-24, the estimated expenditure of the Ministry of Education is Rs 1,12,899 crore, a 13% 
increase from revised estimates for 2022-23.  Of this, the Department of School Education and Literacy has been allocated 61% and the Department of Higher Education has been allocated the remaining 39%.  33% of the Ministry's budget has been allocated to Samagra Shiksha Abhiyan.  Since 2015, overall allocation towards education has been around 2.8% of the GDP. Telecommunications: Rs 59,740 crore (56% of the allocation) in 2023-24 is towards the revival package for BSNL and MTNL.  No funds were disbursed under the PLI scheme in 2021-22.  In 2022-23 also, no funds will be spent towards this scheme as per revised estimates.  Bharatnet and Network for Defence projects have seen significant delays. 

Jal Shakti: The Ministry of Jal Shakti was allocated Rs 97,278 crore for 2023-24, a 31% increase over the revised estimates for 2022-23.  The Jal Jeevan Mission received the highest allocation (Rs 70,000 crore).  River Interlinking saw an increase in allocation due to the implementation of the Ken-Betwa Link Project.  Funds have remained underutilised in schemes such as the Swachh Bharat Mission- Gramin, Atal Bhujal Yojana, and Namami Gange. 

Health and Family Welfare:  In 2023-24, the expenditure of the Ministry of Health and Family Welfare is estimated to be Rs 89,155 crore, a 13% increase from revised estimates for 2022-23.  The National Health Mission is its largest component, accounting for 33% of the Ministry's budget and medical colleges and hospitals account for 27% of the budget.  High out-of-pocket expenditure and shortage of healthcare personnel remain major issues. 

Housing and Urban Affairs: In 2023-24, the Ministry of Housing and Urban Affairs has been allocated Rs 
76,432 crore, an increase of 2.5% over the revised estimates for 2022-23.  The major items are urban housing (PMAY-U) at Rs 25,103 crore and metro projects at Rs 23,175 crore.  Several metro systems are not able to generate required ridership to breakeven.  
Petroleum and Natural Gas: The Ministry has been allocated Rs 41,008 crore, which is a 21% increase over the revised estimates for 2022-23.  This includes Rs 30,000 crore towards capital support to Oil Marketing Companies via equity infusions.  There has been a decrease in allocation towards the LPG subsidy and no allocation has been made towards the kerosene subsidy.  There has been an increase in capital outlay towards the creation of caverns and purchase of oil for the Strategic Petroleum Reserves.  
Women and Child Development: The Ministry has been allocated Rs 25,449 crore in 2023-24, a 6% increase over the revised estimates of 2022-23.  This is spent across three centrally sponsored schemes: Saksham Anganwadi and POSHAN 2.0, Mission Shakti, and Mission Vatsalya.  In the past five years between 2016-17 and 2021-22, the Ministry has underutilised its funds.   
Environment, Forests, and Climate Change: In 2023-24, the Ministry of Environment, Forests and Climate Change has been allocated Rs 3,079 crore, a 24% increase over the revised estimates of 2022-23.  While India has set targets to transition to renewable energy to tackle climate change, availability of adequate finance is a key challenge.  According to experts the overall cost required for India to adapt to climate change by 2030 is expected to be around Rs 86 lakh crore (at 2012 base price).

## Union Budget 2023-24 Analysis Budget Highlights

- 
Expenditure: The government proposes to spend Rs 45,03,097 crore in 2023-24, which is an increase of 
7.5% over the revised estimate of 2022-23.  In 2022-23, total expenditure is estimated to be 6.1% higher than the budget estimate. 
- 
Receipts: The receipts (other than borrowings) in 2023-24 are expected to be to Rs 27,16,281 crore, an 
increase of 11.7% over revised estimate of 2022-23.  In 2022-23, total receipts (other than borrowings) are estimated to be 6.5% higher than the budget estimates. 
- 
GDP: The government has estimated a nominal GDP growth rate of 10.5% in 2023-24 (i.e., real growth 
plus inflation). 
- 
Deficits: Revenue deficit in 2023-24 is targeted at 2.9% of GDP, which is lower than the revised estimate 
of 4.1% in 2022-23.  Fiscal deficit in 2023-24 is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% of GDP in 2022-23.  While the revised estimate as a percentage of GDP was the same as the budget estimate, in nominal terms, fiscal deficit was higher by Rs 94,123 crore (increase of 5.7%) in 2022-23. Interest expenditure at Rs 10,79,971 crore is estimated to be 41% of revenue receipts. 
- 
Ministry allocations: Among the top 13 ministries with the highest allocations, in 2023-24, the highest 
percentage increase in allocation is observed in the Ministry of Railways (49%), followed by the Ministry of Jal Shakti (31%), and the Ministry of Road Transport and Highways (25%). 

## Main Tax Proposals In The Finance Bill

|                         | Table 1: Current and proposed tax slabs   |                        |
|-------------------------|-------------------------------------------|------------------------|
| Tax Rate                | Current Income Slab                       | Proposed Income        |
| Slab                    |                                           |                        |
| Nil                     | Up to Rs 2.5 lakh                         | Up to Rs 3 lakh        |
| 5%                      | Rs 2.5 lakh to Rs 5 lakh                  | Rs 3 lakh to Rs 6 lakh |
| 10%                     | Rs 5 lakh to Rs 7.5 lakh                  | Rs 6 lakh to Rs 9 lakh |
| Rs 9 lakh to Rs 12 lakh | 15%                                       | Rs 7.5 lakh to Rs 10   |
| lakh                    |                                           |                        |
| 20%                     | Rs 10 lakh to Rs 12.5                     |                        |
| lakh                    |                                           |                        |
| Rs 12 lakh to Rs 15     |                                           |                        |
| lakh                    |                                           |                        |
| -                       |                                           |                        |

- 
Changes in the new income tax regime: The 
number of tax slabs has been reduced from six to five.  Table 1 compares the current tax income structure with the proposed income tax structure. 
 The surcharge on the income when it exceeds Rs
 5 crore will be reduced from 37% to 25%.  
Currently, those with income up to Rs 5 lakh can 
avail a rebate and not pay any taxes; this limit 
has been raised to Rs 7 lakh.  Further, the standard deduction will be available under the 
new tax regime. 

| 25%    | Rs 12.5 lakh to Rs 15    |
|--------|--------------------------|
| lakh   |                          |
| 30%    | Above Rs 15 lakh         |

 
- 
Changes in tax exemptions: The tax exemption for news agencies set up solely for the collection and 
distribution of news will be removed.   
- 
Charitable trusts are required to apply 85% of their income within the year to avail income tax exemption.  From April 2023, if a charitable trust donates to another charitable trust, only 85% of such a donation would be considered as application of income.  
- 
Presumptive taxation: The upper limit on turnover for MSMEs to be eligible for presumptive taxation has 
been raised from Rs 2 crore to Rs 3 crore.  The upper limit on gross receipts for professionals eligible for presumptive taxation has been raised from Rs 50 lakh to Rs 75 lakh. 
- 
Co-operative societies: The income tax rate for new co-operative societies engaged in manufacturing 
activities has been lowered from 22% to 15% (plus 10% surcharge). 
- 
Capital gains: Capital gains from sale of residential property can be deducted to the extent of purchase or 
construction of another residential property.  The deduction will be capped at Rs 10 crore. 
- 
Life insurance: Income from investments in life insurance policies will be taxable if premium of Rs 5 lakh 
has been paid in any year.  The amount paid upon the death of the policy holder will continue to be exempt from income tax.   
- 
Online Games: Winnings from online games will be subject to 30% tax deductible at source. 
- 
Startups: Startups incorporated within a time-period and meeting other conditions can deduct up to 100% of 
their profits; the end of this period has been extended from March 31, 2023 to March 31, 2024.  In addition, the period within which losses of startups may be carried forward has been extended from seven to ten years. 
- 
Indirect Taxes: Customs duty on several items have been changed.  On a few items such as gold, platinum, 
and aeroplanes the amount of cess has been increased with a corresponding decrease in customs duties. 
- 
CGST: The CGST Act will be amended such that input tax credit will not be available for goods and 
services purchased for use in activities related to corporate social responsibility. 

## Policy Highlights

- 
Legislative proposals: Amendments will be made to the Banking Regulation Act, 1949, Banking 
Companies (Acquisition and Transfer of Undertaking) Act, 1970, and the Reserve Bank of India Act, 1934 to improve bank governance and enhance investors' confidence.  Several measures will be taken to improve business activities in the Gujarat International Finance Tech-City International Financial Services Centre (GIFT IFSC).  For instance, the IFSC Authority Act, 2019 will be amended to provide for arbitration and ancillary services in GIFT IFSC, and avoiding dual regulation under the Special Economic Zones Act, 2005.   
- 
Infrastructure: The scheme providing 50-year interest free loans to state governments will be made 
available in 2023-24 also with an outlay of Rs 1.3 lakh crore.  100 critical transport infrastructure projects for last and first mile connectivity for various sectors such as ports, coal, steel will be taken up.  This will have an investment of Rs 75,000 crore including Rs 15,000 crore from private sources.    
- 
Urban Development: An Urban Infrastructure Development Fund will be established for development of 
urban infrastructure by public agencies in tier-2 and tier-3 cities.  The Fund will be managed by the National Housing Bank and is expected to have an annual allocation of Rs 10,000 crore.  States and cities will be encouraged to undertake urban planning reforms such as efficient land use and transit-oriented development.  Cities will be incentivised to improve their credit worthiness for municipal bonds through property tax reforms and setting aside user charges.     
- 
Agriculture: An Agriculture Accelerator Fund will be set up to encourage agri-startups in rural areas.  A 
sub-scheme of PM Matsya Sampada Yojana will be launched with an investment of Rs 6,000 crore to support fishermen, fish vendors, and MSMEs.  Decentralised storage capacity will be set up for farmers to store their produce.  PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-PRANAM) will be launched to incentivise states/UTs to promote balanced use of chemical 
fertilisers and alternative fertilisers.      
- 
Energy and Environment: A Green Credit Programme will be notified under the Environment 
(Protection) Act, 1986 to incentivise environmentally sustainable actions by companies, individuals, and 
local bodies, and help gather additional resources for such actions.  Battery Energy Storage Systems with 
4,000 MWh capacity will be supported with viability gap funding.   
- 
Research and Development (R&D): Three centres of excellence for R&D in Artificial Intelligence will be 
established in select educational institutions.  100 labs will be set up in engineering institutions for developing applications using 5G services.  A National Data Governance Policy will be released to enable access to anonymised data.  A programme to promote research and innovation in pharmaceuticals will be 
taken up through centres of excellence.    
- 
Health: Nursing colleges will be started along with all existing 157 medical colleges.  In order to eliminate 
sickle cell anaemia by 2047, a Mission will be launched covering seven crore people in the age group 0-40 in affected tribal areas.  
- 
Finance: A National Finance Information registry will be set up for accessing all financial and ancillary 
information.  A small savings scheme, Mahila Samman Savings Certificate will be launched for two years. Further, the deposit limit for senior citizens savings scheme will be increased from Rs 15 lakh to Rs 30 
lakh.     
- 
Governance: The KYC process will be simplified and financial sector regulators will be encouraged to 
have a KYC system.  A Unified Filing Process will be set up for submitting information to different government agencies.  A Voluntary Settlement Scheme will be launched to settle contractual disputes of government and its undertakings.  The financing system of certain schemes will be changed from inputbased to result-based on a pilot basis.     

## Budget Estimates Of 2023-24 As Compared To Revised Estimates Of 2022-23

- 
Total Expenditure: The government is estimated to spend Rs 45,03,097 crore in 2023-24.  This is an 
increase of 7.5% over the revised estimate of 2022-23.  Out of the total expenditure, revenue expenditure is 
estimated to be Rs 35,02,136 crore (1.2% increase) and capital expenditure is estimated to be Rs 10,00,961 
crore (37.4% increase).  The increase in capital expenditure is due to an increase in capital outlay on transport (including railways, roads and bridges, and inland water transport) by Rs 1,28,863 crore (36.1% increase).  Expenditure on total capital outlay is estimated to be Rs 8,37,127 crore in 2023-24, an increase of 35% over the revised estimates for 2022-23. 
- 
Total Receipts: Government receipts (excluding borrowings) are estimated to be Rs 27,16,281 crore, an 
increase of 11.7% over the revised estimates of 2022-23.  The gap between these receipts and the expenditure will be plugged by borrowings, budgeted to be Rs 17,86,816 crore, an increase of 1.8% over the revised estimate of 2022-23. 
- 
Transfer to states: The central government will transfer Rs 18,62,874 crore to states and union territories in 
2023-24, an increase of 8.9% over the revised estimates of 2022-23.  Transfer to states includes devolution of Rs 10,21,448 crore out of the divisible pool of central taxes, grants worth Rs 6,86,773 crore, and special loans worth Rs 1.3 lakh crore for capital expenditure.   
- 
Deficits: Revenue deficit is targeted at 2.9% of GDP, and fiscal deficit is targeted at 5.9% of GDP in 2023-
24.  The target for primary deficit (which is fiscal deficit excluding interest payments) in 2023-24 is 2.3% of GDP.  The revised estimate for the revenue deficit target has increased from the budgeted estimate in 2022- 23.  The revised fiscal deficit target for 2022-23 has remained the same, despite higher receipts.  In 2022-23, 
the central government's revenue deficit is expected to be 4.1% of GDP against a budget estimate of 3.8% of 
GDP.  
- 
GDP growth estimate: The nominal GDP is estimated to grow at a rate of 10.5% in 2023-24. 

% change (2022-
23 RE to 2023-
  
Actuals 
2021-22 
Budgeted 
2022-23 
Revised 
2022-23 
Budgeted 
2023-24 
24 BE) 
Revenue Expenditure 
32,00,926 
31,94,663 
34,58,959 
35,02,136 
1.2% 
Capital Expenditure 
5,92,874 
7,50,246 
7,28,274 
10,00,961 
37.4% 
of which: 


Capital Outlay 
5,34,499 
6,10,189 
6,20,204 
8,37,127 
35.0% 
Loans and Advances 
58,376 
1,40,057 
1,08,070 
1,63,834 
51.6% 
Total Expenditure 
37,93,801 
39,44,909 
41,87,232 
45,03,097 
7.5% 
Revenue Receipts 
21,69,905 
22,04,422 
23,48,413 
26,32,281 
12.1% 
Capital Receipts 
39,375 
79,291 
83,500 
84,000 
0.6% 
of which: 

  Recoveries of Loans 
24,737 
14,291 
23,500 
23,000 
-2.1% 
   Other receipts (including disinvestments) 
14,638 
65,000 
60,000 
61,000 
 
Total Receipts (excluding borrowings) 
22,09,280 
22,83,713 
24,31,913 
27,16,281 
11.7% 
Revenue Deficit 
10,31,021 
9,90,241 
11,10,546 
8,69,855 
-21.7% 
% of GDP 
4.4% 
3.8% 
4.1% 
2.9% 
-29.3% 
Fiscal Deficit 
15,84,521 
16,61,196 
17,55,319 
17,86,816 
1.8% 
% of GDP 
6.7% 
6.4% 
6.4% 
5.9% 
-7.8% 
Primary Deficit 
7,79,022 
7,20,545 
8,14,668 
7,06,845 
-13.2% 
% of GDP 
3.3% 
2.8% 
3.0% 
2.3% 
-23.3% 

Sources: Budget at a Glance, Union Budget Documents 2023-24; PRS. 

Expenses which bring a change to the government's assets or liabilities (such as construction of roads or recovery of loans) are capital expenses, and all other expenses are revenue expenses (such as payment of salaries or interest payments).  In 2023-24, capital expenditure is expected to increase by 37.4% over the revised estimates of 2022-23, to Rs 10,00,961 crore.  Revenue expenditure is expected to increase by 1.2% over the revised estimates of 2022-23 to Rs 35,02,136 crore. Disinvestment is the government selling its stakes in Public Sector Undertakings (PSUs).  In 2022-23, the government is estimated to meet 77% of its disinvestment target (Rs 50,000 crore against a target of Rs 65,000 crore).  The disinvestment target for 2023-24 is Rs 51,000 crore. 

Note: Actual data for 2022-23 is revised estimate. Sources: Union Budget Documents (various years); PRS. 

## Receipts Highlights For 2023-24

- 
Receipts (excluding borrowings) in 2023-24 are estimated to be Rs 27,16,281 crore, an increase of 11.7% over 
the revised estimates of 2022-23. 
- 
Gross tax revenue is budgeted to increase by 10.4% over the revised estimates of 2022-23, which is about the 
same as the estimated nominal GDP growth of 10.5% in 2023-24.  Corporation tax and income tax are estimated to increase at the same rate as the nominal GDP (10.5%).  Excise duties (mainly imposed on petroleum products) are expected to rise by 5.9% in 2023-24.  GST revenue is budgeted to increase at a higher rate (12%).  The net tax revenue of the central government (excluding states' share in taxes) is estimated to be Rs 23,30,631 crore in 2023-24, which is 11.7% over the revised estimates for 2022-23. 
- 
Devolution to states from centre's tax revenue is estimated to be Rs 10,21,448 crore in 2023-24, an increase of 7.7% over the revised estimates of 2022-23.  In 2022-23, the devolution to states increased by Rs 1,31,756 
crore, from an estimate of Rs 8,16,649 crore at the budgeted stage to Rs 9,48,405 crore at the revised stage 
(16%).   
- 
Non-tax revenue is estimated at Rs 3,01,650 crore in 2023-24, an increase of 15.2%  over the revised estimate 
of 2022-23. 
- 
Capital receipts (excluding borrowings) are targeted at Rs 84,000 crore, a marginal increase of 0.6% over the 
revised estimates of 2022-23.  Recoveries of loans and advances were 64% higher in the revised estimates of 2022-23 at Rs 23,500 crore compared to budget estimates of Rs 14,291 crore.   

 
Actuals 
2021-22 
Budgeted 
2022-23 
Revised 
2022-23 
Budgeted 
2023-24 
% change 2022-23 
RE to 2023-24 BE 
Gross Tax Revenue 
27,09,135 
27,57,820 
30,43,067 
33,60,858 
10.4% 
of which: 


Corporation Tax 
7,12,037 
7,20,000 
8,35,000 
9,22,675 
10.5% 
Taxes on Income 
6,96,243 
7,00,000 
8,15,000 
9,00,575 
10.5% 
Goods and Services Tax 
6,98,114 
7,80,000 
8,54,000 
9,56,600 
12.0% 
Customs 
1,99,728 
2,13,000 
2,10,000 
2,33,100 
11.0% 
Union Excise Duties 
3,94,644 
3,35,000 
3,20,000 
3,39,000 
5.9% 
Service Tax 
1,012 
2,000 
1,000 
500 
-50.0% 
A. Centre's Net Tax Revenue 
18,04,794 
19,34,771 
20,86,662 
23,30,631 
11.7% 
Devolution to States 
8,98,392 
8,16,649 
9,48,405 
10,21,448 
7.7% 
B. Non Tax Revenue 
3,65,112 
2,69,651 
2,61,751 
3,01,650 
15.2% 
of which: 


Interest Receipts 
21,874 
18,000 
24,640 
24,820 
0.7% 
Dividend 
1,60,647 
1,13,948 
83,953 
91,000 
8.4% 
Other Non-Tax Revenue 
1,79,540 
1,34,276 
1,48,342 
1,81,382 
22.3% 
C. Capital Receipts (without borrowings) 
39,375 
79,291 
83,500 
84,000 
0.6% 
of which: 


Disinvestment 
13,627 
65,000 
50,000 
51,000 
2.0% 
Receipts (without borrowings) (A+B+C) 
22,09,281 
22,83,713 
24,31,913 
27,16,281 
11.7% 
Borrowings 
15,84,521 
16,61,196 
17,55,319 
17,86,816 
1.8% 
Total Receipts (including borrowings) 
37,93,802 
39,44,909 
41,87,232 
45,03,097 
7.5% 

Sources: Receipts Budget, Union Budget Documents 2023-24; PRS. 

- 
Indirect taxes: The total indirect tax collections are estimated to be Rs 15,29,200 crore in 2023-24.  Of 
this, the government has estimated to raise Rs 9,56,600 crore from GST.  Out of the total tax collections under GST, 85% is expected to come from central GST (Rs 8,11,600 crore), and 15% from the GST compensation cess (Rs 1,45,000 crore).     
- 
Corporation tax: The collections from taxes on companies are expected to increase by 10.5% in 2023-24.  
In 2022-23, corporate tax collection is expected to be 16% higher than the budget estimate (Rs 7,20,000 crore). 
- 
Income tax: The collections from income tax are also expected to increase by 10.5% in 2023-24 to Rs 
9,00,575 crore.  Income tax collection is expected to be 16.4% higher than the budget estimate in 2022-23. 
- 
Non-tax receipts: Non-tax revenue consists mainly of interest receipts on loans given by the centre, dividends, 
license fees, tolls, and charges for government services.  Dividend receipts were lower in 2022-23 than originally budgeted mainly on account of lower dividend from Reserve Bank of India.  In 2023-24, non-tax revenue is expected to increase by 15% over the revised estimates of 2022-23.   
- 
Disinvestment target: The disinvestment target for 2023-24 is Rs 51,000 crore.  This is a marginal increase 
of 2% over the revised estimate of 2022-23 (Rs 50,000 crore).  In 2022-23, the receipts from disinvestment are expected to be 23% lower than the budget estimate. 

## Expenditure Highlights For 2023-24

- 
Total expenditure in 2023-24 is expected to be Rs 45,03,097 crore, which is an increase of 7.5% over 
than the revised estimate of 2022-23.  Out of this: (i) Rs 14,67,880 crore is proposed to be spent on central sector schemes (4% increase over the revised estimate of 2022-23), and (ii) Rs 4,76,105 crore is proposed to be spent on centrally sponsored schemes (a 5.4% increase over the revised estimate of 2022- 23). 
- 
The government has estimated to spend Rs 2,34,359 crore on pension in 2023-24, which is 4.3% lower than the revised estimate of 2022-23.  In addition, expenditure on interest payment in 2023-24 is estimated to be Rs 10,79,971 crore, which is 24% of the government's expenditure.  In 2023-24, interest payments are expected to increase by 14.8% as compared to revised estimates of 2022-23.   

  
Actuals 
2021-22 
Budgeted 
2022-23 
Revised 
2022-23 
Budgeted 
2023-24 
% change (2022-23 
RE to 2023-24 BE) 
Central Expenditure 
29,13,970 
30,06,111 
32,82,936 
35,13,761 
7.0% 
Establishment Expenditure of Centre 
6,93,272 
6,92,214 
7,34,619 
7,44,339 
1.3% 
Central Sector Schemes 
12,09,950 
11,81,084 
14,11,729 
14,67,880 
4.0% 
Other expenditure 
10,10,748 
11,32,813 
11,36,588 
13,01,542 
14.5% 
Grants for CSS and other transfers 
8,79,832 
9,38,797 
9,04,296 
9,89,337 
9.4% 
Centrally Sponsored Schemes (CSS) 
4,54,366 
4,42,781 
4,51,901 
4,76,105 
5.4% 
Finance Commission Grants 
2,07,435 
1,92,108 
1,73,257 
1,65,480 
-4.5% 
of which: 


Rural Local Bodies 
40,312 
46,513 
41,000 
47,018 
14.7% 
Urban Local Bodies 
16,147 
22,908 
15,026 
24,222 
61.2% 
Grants-in-aid 
20,272 
23,294 
22,135 
24,466 
10.5% 
Post Devolution Revenue Deficit 
Grants 
1,18,452 
86,201 
86,201 
51,673 
-40.1% 
Other grants 
2,18,031 
3,03,908 
2,79,138 
3,47,752 
24.6% 
Total Expenditure 
37,93,801 
39,44,909 
41,87,232 
45,03,097 
7.5% 

Sources:  Budget at a Glance, Union Budget Documents 2023-24; PRS. 

Expenditure by Ministries  
In 2023-24, the ministries with the highest allocations account for 55% of the estimated total expenditure.  Of these, the Ministry of Defence has the highest allocation in 2023-24, at Rs 5,93,538 crore.  It accounts for 13.2% of the total budgeted expenditure of the central government.  Other ministries with high allocation include: (i) Road Transport and Highways (6% of total expenditure), (ii) Railways (5.4%), and (iii) Consumer Affairs, Food, and Public Distribution (4.6%).  Table 5 shows the expenditure on Ministries with the 13 highest allocations for 2023-24 and the changes in allocation as compared to the revised estimate of 2022-23. 

% change 
(2022-23 RE to 2023-24 
  
Actuals 
2021-22 
Budgeted 
2022-23 
Revised 
2022-23 
Budgeted 
2023-24 
BE) 
Defence 
5,00,681 
5,25,166 
5,84,791 
5,93,538 
1.5% 
Road Transport and Highways 
1,23,551 
1,99,108 
2,17,027 
2,70,435 
24.6% 
Railways 
1,35,242 
1,40,367 
1,62,312 
2,41,268 
48.6% 
Food and Public Distribution 
3,06,571 
2,17,684 
2,96,523 
2,05,765 
-30.6% 
Home Affairs 
1,68,791 
1,85,777 
1,93,912 
1,96,035 
1.1% 
Chemicals and Fertilisers 
1,54,789 
1,07,715 
2,27,681 
1,78,482 
-21.6% 
Rural Development 
1,61,643 
1,38,204 
1,82,382 
1,59,964 
-12.3% 
Agriculture and Farmers' Welfare 
1,22,836 
1,32,514 
1,18,913 
1,25,036 
5.1% 
Communications 
51,545 
1,05,407 
1,05,478 
1,23,393 
17.0% 
Education 
80,352 
1,04,278 
99,881 
1,12,899 
13.0% 
Jal Shakti 
83,467 
86,189 
74,029 
97,278 
31.4% 
Health and Family Welfare 
84,470 
86,201 
79,145 
89,155 
12.6% 
Housing and Urban Affairs 
1,06,840 
76,549 
74,546 
76,432 
2.5% 
Other Ministries 
17,13,022 
18,39,751 
17,70,613 
20,33,419 
14.8% 
Total Expenditure 
37,93,801 
39,44,909 
41,87,232 
45,03,097 
7.5% 

Sources:  Expenditure Budget, Union Budget 2023-24; PRS. 

- 
Railways: Allocation is estimated to increase by Rs 78,956 crore (48.6%) in 2023-24, over the revised 
estimate of 2022-23.  This is mainly on account of increased capital outlay on commercial lines. 
- 
Jal Shakti: Allocation to the Ministry of Jal Shakti is estimated to increase by Rs 23,249 crore (31.4%) in 
2023-24, driven by an increase in the allocation for Jal Jeevan Mission. 
- 
Road Transport and Highways: Allocation in 2023-24 is estimated to increase by Rs 53,408 crore 
(24.6%), on account of an increase on capital outlay on roads and bridges (24.5%).   
- 
Allocation towards the Ministries of Consumer Affairs, Food and Public Distribution, and Chemicals and Fertilisers have decreased mainly on account of a reduction in food subsidy and fertiliser subsidy.  We discuss the expenditure on subsidies below. 

## Expenditure On Subsidies

In 2023-24, the total expenditure on subsidies is estimated to be Rs 4,03,084 crore, a decrease of 28.3% from the revised estimate of 2022-23 (Table 6). 

- 
Food subsidy: Allocation to food subsidy is estimated at Rs 1,97,350 crore in 2023-24, a 31.3% decrease 
over the revised estimate of 2022-23.  A higher level of food subsidy was budgeted in 2021-22 and 2022-23 mainly on account of Pradhan Mantri Garib Kalyan Ann Yojana, which provides for free additional foodgrains to eligible beneficiaries to mitigate the impact of COVID-19.  The provision of additional foodgrains was discontinued in December 2022. 
- 
Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 1,75,100 crore in 2023-24.  This is a 
decrease of Rs 50,120 crore (22.3%) from the revised estimate of 2022-23.  Fertiliser subsidy for 2022-23 was increased substantially in response to a sharp increase in international prices of raw materials used in the manufacturing of fertilisers. 
- 
Other subsidies: Expenditure on other subsidies includes interest subsidies for various government 
schemes, subsidies for the price support scheme for agricultural produce, and assistance to ship building research and development, among others.  In 2023-24, the expenditure on these other subsidies is estimated to decrease by 30% over the revised estimate of 2022-23.   

| Budgeted           | Budgeted    | % change                   |
|--------------------|-------------|----------------------------|
|                    |             |                            |
| Actuals            |             |                            |
| 2021-22            | 2022-23     |                            |
| Revised            |             |                            |
| 2022-23            | 2023-24     | (2022-23 RE to 2023-24 BE) |
| Food subsidy       |             |                            |
| 2,88,969           | 2,06,831    | 2,87,194                   |
| Fertiliser subsidy |             |                            |
| 1,53,758           | 1,05,222    | 2,25,220                   |
| Petroleum subsidy  |             |                            |
| 3,423              | 5,813       | 9,171                      |
| Other subsidies    |             |                            |
| 57,758             | 37,773      | 40,495                     |
| Total              |             |                            |
| 5,03,907           | 3,55,639    | 5,62,080                   |

Sources: Expenditure Profile, Union Budget 2023-24; PRS. 

## Expenditure On Major Schemes

% change (2022-
23 RE to 2023-24 
  
Actuals 
2021-22 
Budgeted 
2022-23 
Revised 
2022-23 
Budgeted 
2023-24 
BE) 
Pradhan Mantri Awas Yojana 
90,020 
48,000 
77,130 
79,590 
3.2% 
Jal Jeevan Mission/National Rural Drinking Water Mission 
63,126 
60,000 
55,000 
70,000 
27.3% 
PM-KISAN 
66,825 
68,000 
60,000 
60,000 
0.0% 
MGNREGS 
98,468 
73,000 
89,400 
60,000 
-32.9% 
National Education Mission 
25,305 
39,553 
32,612 
38,953 
19.4% 
National Health Mission 
32,958 
37,160 
33,708 
36,785 
9.1% 
Modified Interest Subvention Scheme* 
- 
19,500 
22,000 
23,000 
4.5% 
Saksham Anganwadi and POSHAN 2.0  
18,382 
20,263 
20,263 
20,554 
1.4% 
Pradhan Mantri Gram Sadak Yojana 
13,992 
19,000 
19,000 
19,000 
0.0% 
AMRUT and Smart Cities Mission 
13,868 
14,100 
15,300 
16,000 
4.6% 
National Livelihood Mission-Ajeevika 
10,177 
14,236 
13,886 
14,129 
1.7% 
Guarantee Emergency Credit Line to MSME borrowers 
7,445 
15,000 
10,500 
14,100 
34.3% 
Pradhan Mantri Fasal Bima Yojana 
13,549 
15,500 
12,376 
13,625 
10.1% 
Swachh Bharat Mission 
5,050 
9,492 
7,000 
12,192 
74.2% 
Reform Linked Distribution Scheme 
814 
7,566 
6,000 
12,072 
101.2% 

Note: The Modified Interest Subvention Scheme replaced the scheme for interest subsidy for short term credit to farmers (the actual expenditure towards this scheme is Rs 21,477 crore in 2021-22). Sources: Expenditure Profile, Union Budget 2023-24; PRS.   

- 
Pradhan Mantri Awas Yojana (rural and urban components taken together) has the highest allocation in 2023-24 at Rs 79,590 crore.  This is an increase of 3.2% over the revised estimate of 2022-23.  As compared to the revised estimates of 2022-23, the allocation for the rural component of the scheme has 
increased by 13% and the urban component has declined by 13% in 2023-24.  For 2022-23, the allocation towards the scheme has been increased by 60.7% as compared to the budget estimates. 
- 
The Jal Jeevan Mission has the second highest allocation in 2023-24 at Rs 70,000 crore, an increase of 27.3% over the revised estimate of Rs 55,000 crore in 2022-23. 
- 
Allocation for PM-KISAN has been kept constant at Rs 60,000 crore, and for MGNREGS has been reduced by 33% to Rs 60,000 crore. 
- 
Some other schemes with a comparatively higher increase in allocation in 2023-24 include: (i) Reform Linked Distribution Scheme (101.2%), (ii) Swachh Bharat Mission (74.2%), and (iii) Guarantee Emergency Credit Line to MSME borrowers (34.3%).  

## Loans To States For Capital Expenditure

- 
The Centre has budgeted Rs 1.3 lakh crore for special interest-free loans to states for capital expenditure. The revised estimates for 2022-23 at Rs 76,000 crore were lower than the budgeted Rs 1 lakh crore.   

## Expenditure On Scheduled Caste And Scheduled Tribe Sub-Plans And Schemes For Welfare Of Women, Children And North Eastern Region

% change 
  
Actuals 
2021-22 
Revised 
2022-23 
Budgeted 
2023-24 
(2022-23 RE to 
2023-24 BE) 
Welfare of Women 
2,09,528 
2,18,487 
2,23,220 
2.2% 
Welfare of Children 
73,199 
89,008 
1,03,791 
16.6% 
Scheduled Castes 
1,21,614 
1,52,604 
1,59,126 
4.3% 
Scheduled Tribes 
83,921 
94,293 
1,19,510 
26.7% 

- 
Programmes for the welfare of women and children 
have been allocated Rs 
3,27,010 crore in 2023-24, an increase of 6.3% over the revised estimate of 2022-23.  These allocations include programmes being implemented across all ministries.   

| North Eastern Region (NER)                               |
|----------------------------------------------------------|
| Sources: Expenditure Profile, Union Budget 2023-24; PRS. |
|                                                          |

- 
The allocation towards scheduled castes and scheduled tribes in 2023-24 is estimated to increase by 4.3% and 26.7%, respectively.  The budget for road works under allocation for welfare of scheduled tribes has increased by 265% in 2023-24 as compared to revised estimate of 2022-23.  The allocation towards North Eastern Region is estimated to increase by 30.5% in 2023-24 over the revised estimates of 2022-23. 

## Fiscal Responsibility And Budget Management Targets

The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively reduce its outstanding debt, revenue deficit and fiscal deficit, and give three year rolling targets. Note that the Medium-Term Fiscal Policy Statement has not provided rolling targets for budget deficits since 2021-22.  In the Budget speech, the finance minister reiterated the government's aim to reduce fiscal deficit to below 4.5% of GDP by 2025-26. 

Fiscal deficit is an indicator of borrowings by the government for financing its expenditure.  The estimated fiscal deficit for 2023-24 is 5.9% of GDP. 

  
Actuals 
2021-22 
Revised 
2022-23 
Budgeted 
2023-24 
Fiscal Deficit 
6.7% 
6.4% 
5.9% 
Revenue Deficit 
4.4% 
4.1% 
2.9% 
Primary Deficit 
3.3% 
3.0% 
2.3% 

Revenue deficit is the excess of revenue expenditure over revenue receipts.  Such a deficit implies that the government needs to borrow funds to meet recurring expenses which may not provide future returns.  The estimated revenue deficit for 2023-24 is 2.9% of GDP. 

Primary deficit is the difference between fiscal deficit and interest payments.  It is estimated to be 2.3% of GDP in 2023-24.  
Note: Data for 2022-23 is revised estimate. Sources: Budget at a Glance, Union Budget (multiple years); PRS. 

- 
In the 2022-23 budget, the government estimated the fiscal deficit to be at 6.4% of GDP, and the revenue deficit to be at 3.8% of GDP.  As per the revised estimates for 2022-23, the ratio of fiscal deficit to GDP is estimated to be the same as budget estimate despite fiscal deficit being higher in nominal terms by Rs 94,123 crore (5.7% overshooting).  This was due to GDP growth being higher than estimated. 
- 
Outstanding Liabilities: The central government's outstanding liabilities declined from 51% in 2012-13 to 
48% in 2018-19.  From 2019-20 onwards, outstanding liabilities have been increasing, and reached a high of 61% in 2020-21.  They declined to 57% in 2021-22, and are expected to remain at that level in 2023-24.    
- 
Outstanding liabilities is the accumulation of borrowings over the years.  A higher debt implies that the government has a higher loan repayment obligation over the years. 
- 
The interest payments as a percentage of revenue receipts increased from 36% in 2011-12 to 42% in 2020-21. As per the budget estimates, this figure is expected to marginally reduce to 41% in 2023-24. 
Note: RE is revised estimate and BE is budget estimate. Sources: Economic Survey 2022-23, Union Budget Documents 2023-24; PRS. 

## Demand For Grants 2023-24 Analysis Defence

The Ministry of Defence frames policies on defence and security-related matters, and ensures its implementation by the defence services (Army, Navy, and Air Force).  In addition, it is responsible for production establishments such as defence public sector undertakings, research and development organisations, and ancillary services that assist the defence services, such as the Armed Forces Medical Services. This note analyses budgetary allocation and expenditure trends of the Ministry.  The note also discusses certain issues such as the falling expenditure on defence as percentage of GDP, high share of pension, continued reliance on imports to meet defence equipment needs, and shorter tenure of Agnipath recruits compared to regular cadres.  
Overview of finances The Budget of the Ministry of Defence includes the allocation towards the three defence services along with the expenditure on research and development and border roads.  In 2023-24, the Ministry has been allocated Rs 5,93,538 crore.  This includes expenditure on salaries of the armed forces and civilians, pension, modernisation of armed forces, production establishments, maintenance, and research and development organisations.  The allocation towards the Ministry is largest across all ministries and accounts for over 13% of the total expenditure of the central government.   

## India Among Top Global Military Spenders But Expenditure Declines As Share Of Budget

According to the Stockholm International Peace Research Institute (SIPRI), India was the thirdlargest defence spender in absolute terms in 2021 after USA and China.1  Note that the SIPRI database includes the expenditure on paramilitary forces under India's total defence expenditure.  While China spends a lower proportion of its GDP on defence than India, its larger economy implies that it spends over 3.5 times as much as India in terms of absolute terms. While India continues to be among the top nations in terms of spending on its military, the expenditure of the Ministry as a share of the central government expenditure has steadily declined over the years.  In 2016-17, 17.8% of the total central government expenditure was spent on defence which is expected to decline to 13.2% according to the budget estimates of 2023-24.  Between 2013-14 and 2023- 24 while central government expenditure is estimated to increase at an annual rate of 11%, spending on defence is estimated to increase at an annual rate of 9%. 

Expenditure (as % 
Country 
Expenditure (in 
USD billion) 
of GDP) 
USA 
801 
3.48% 
China 
293 
1.74% 
India 
77 
2.66% 
UK 
68 
2.22% 
Russia 
66 
4.08% 
Pakistan 
11 
3.83% 

Note: The figures for India include expenditure on the paramilitary forces of the Border Security Force, the Central Reserve Police Force, the Assam Rifles, the Indo-Tibetan Border Police and, Sashastra Seema Bal. Sources: SIPRI Military Expenditure Database; PRS. 

Note: BE is budget estimate and RE is revised estimate. Sources: Union Budget Documents (various years); PRS. 

The Standing Committee on Defence (2018) had recommended that the Ministry of Defence should be allocated a fixed budget of about 3% of GDP to ensure adequate preparedness of the armed forces.2  
However, over the last decade, India's spending on defence has consistently been lower than this recommended level.  In 2023-24, allocation to the Ministry is estimated to be marginally lower than 2% of GDP (Figure 2).  This is different from the figure given in Table 1 due to different methodology used by SIPRI.  If spending on defence pension is excluded from the total expenditure of the Ministry, the expenditure as a percentage of GDP decreases by about 0.5 percentage point across years.  
Note: BE is budget estimate and RE is revised estimate. Sources: Union Budget Documents (various years); MoSPI; PRS. 

## Budget Allocation Lower Than Projected Needs Of The Armed Forces

The allocation made to the Ministry is also less than what is sought by the defence forces.  The amount allocated to the Ministry each year is determined based on various needs of the forces such as acquisition of weaponry and payment of salaries and pensions.  In 2022-23, the amount allocated to the armed forces was 28% lower than what was sought by the forces as part of their projected needs.  The shortfall in allocation has been higher for the capital component of the budget as compared to the revenue component.    
In a memorandum submitted to the 15th Finance Commission, the Ministry of Defence sought adequate funding through alternate sources for meeting its increasing requirements.3  The Ministry had pointed out that budgetary allocations have declined over the years and are inadequate to fund large defence acquisitions.3  For the period 2021-26, the Ministry estimated to receive Rs 9.01 lakh crore for capital outlay against the defence plan projection of Rs 17.46 lakh crore (48% shortfall).3  It was highlighted by the Ministry that consistent shortfalls in the defence budget over a long period has led to serious capability gaps, including compromising the operational preparedness of the three services.3 Lack of adequate funds has forced the Ministry to manage its expenditure through ad-hoc mechanisms such as postponing procurements and delaying payments.3 The 15th Finance Commission recommended that the central government may constitute Modernisation Fund for Defence and Internal Security (MFDIS) to bridge the gap between projected budgetary requirements and budget allocation.3  This fund will be non-lapsable.  Its proceeds will be utilised for: (i) capital investment for modernisation of defence services, and (ii) capital investment and modernisation of central armed police forces and state police forces.  The fund could have four specific sources of incremental funding: (i) transfers from Consolidated Fund of India, (ii) disinvestment proceeds of defence public sector enterprises, (iii) proceeds from monetisation of surplus defence land, and (iv) proceeds of receipts from defence land likely to be transferred to state governments and for public projects in future.3  The Finance Commission estimated the indicative size of the fund at Rs 2,38,354 crore over 2021-26.3  According to media reports, the Ministry of Finance has rejected the funding pattern of the fund as recommended by the 15th Finance Commission.4  It is exploring new means of funding as it is of the opinion that putting money directly in a non-lapsable fund is against good parliamentary practice.4 The Standing Committee on Defence (2017) noted that creation of a non-lapsable defence capital fund account is an imperative need for improving operational preparedness of the armed forces.5 Creating such a fund would ensure that procurement of equipment and ammunitions is not delayed due to lack of money.5   
The Standing Committee on Defence (2022) was informed that the proposal to create a non-lapsable defence modernisation fund was under consideration by the central government.6  A suitable mechanism for operationalising the fund was being worked out in consultation with the Ministry of Finance.6  The Committee recommended expediting the creation of the fund so that defence procurement can be carried out without having to rely on supplementary or additional grants.   

## Composition Of The Defence Budget

In 2023-24, the allocation made to the Ministry is 1.5% higher as compared to the revised estimates of 2022-23 (Table 2).  This is significantly lower as compared to the growth in the total expenditure of the central government at 7.5% in 2023-24 over the revised estimates of 2022-23.  Within the defence budget, salaries are estimated to increase by 3% while pension is estimated to decrease by 10% in 2023-24 as compared to the revised estimates of 
2022-23.  Salaries and pension account for 52% of the defence budget in 2023-24.  This does not include salary of Rashtriya Rifles, National Cadet Corps (NCC), Joint Staff and Agnipath as detailed break-up of these expense heads is not provided. Capital outlay, which includes spending on acquisition of arms, ammunition, and other equipment, is estimated to increase by 8% in the same period.  Other expenses include spending on transportation, Rashtriya Rifles, Joint Staff, Agnipath scheme, and other establishment expenditure of the Ministry.     

% 
RE 
BE 
Major Head 
Actuals 
2021-22 
2022-23 
2023-24 
change 
2022-23 
RE to 
2023-24 
BE 
Salaries 
1,47,471 
1,62,902 
1,68,334 
3% 
Capital Outlay 
1,44,786 
1,57,979 
1,71,375 
8% 
Pension 
1,16,800 
1,53,414 
1,38,205 
-10% 
Maintenance 
62,541 
75,319 
74,175 
-2% 
Other Expenses 
29,083 
35,177 
41,449 
18% 
Total 
5,00,681 
5,84,791 
5,93,538 
1% 

Note: Salaries include pay and allowances of the armed forces, auxiliary forces, civilians, research and development, and salary expenditure of the civil estimates.  It does not include salaries of Rashtriya Rifles, NCC, Joint Staff, and Agnipath recruits as detailed breakup is not provided.  Capital outlay includes capital expenditure of the Ministry and the armed forces.  Maintenance includes expenditure on stores, works, repairs, and refits. Sources: Expenditure Budget, Union Budget 2023-24; PRS.   

## More Than 20% Of The Defence Budget Is Spent On Pension

Defence pension provide for pensionary charges for retired defence personnel of the three services (including civilian employees) and employees of Ordnance Factories.  It covers payment of service pension, gratuity, family pension, disability pension, commuted value of pension, and leave encashment. The expenditure on defence pension has increased at an annual rate of 12% between 2013-14 and 2023- 24.  This is higher than the 9% annual growth in the total expenditure of the Ministry.  In 2023-24, defence pension is estimated to be 10% lower as compared to the revised estimate of 2022-23. However, in 2022-23, pension expenditure was 28% higher at the revised estimate stage as compared to the budget stage.  This was driven by payment of arrears of One Rank One Pension (OROP) of Rs 28,137 crore in 2022-23.  Between 2014-15 and 2023-24, the spending on defence pension has been consistently higher than 20% of the total budget of the Ministry.  In 2019-20 and 2022-23, 26% of the Ministry's budget was spent of pension expenditure.    
 
Note: BE is budget estimate and RE is revised estimate. Sources: Union Budget Documents (various years); PRS. 

In November 2015, the government decided to implement OROP with benefits effective from July 1, 2014.7  Under this framework, soldiers of the same rank who have retired after serving for the same length of service will receive the same pension.  This applies irrespective of the date and year of their retirement.  The pension under OROP is revised after every five years.7  Almost Rs 57,000 crore has been spent under OROP since its implementation.7  In December 2022, the Union Cabinet approved the revision of pension under OROP with effect from July 1, 2019.7  The annual expenditure for implementing the revised pension was estimated at around Rs 8,450 crore. The 15th Finance Commission recommended that the Ministry should take steps to reduce salaries and pension liabilities.3  The Ministry has been examining various reforms in defence pension including: (i) bringing service personnel currently under the old pension scheme into the New Pension Scheme, (ii) increasing retirement age of personnel below officer ranks, and (iii) transfer of retired personnel to other services.  Also, the recently implemented Agnipath scheme for recruiting soldiers, sailors, and airmen into the armed forces may help in reducing pension expenditure in the long term (see page 19). 

## Capital Outlay Has Remained Below 30% Of The Defence Budget

One of the consequences of high spending on defence pension could be the lower spending on capital outlay.  Capital outlay for defence includes expenditure on construction work, machinery, and equipment such as tanks, naval vessels, and aircrafts. It also includes capital expenditure on research and development and construction of border roads.  In 2013-14, 32% of the defence budget was spent on capital outlay.  This share has declined and between 2014-15 and 2023-24 less than 30% of the defence budget involved spending on capital outlay.  In 2023-24, the Ministry is estimated to spend 29% of its budget on capital outlay as compared to 27% in 2022-23. 

Note: BE is budget estimate and RE is revised estimate. Sources: Union Budget Documents (various years); PRS. 

The Standing Committee on Defence (2021) had observed that the ideal ratio of revenue expenditure to capital outlay was 60:40.8  In 2023-24, Navy and Air Force are estimated to spend over half of their budget allocation on capital expenditure.   

| Forces    | Revenue    | Capital    |
|-----------|------------|------------|
| Ratio     |            |            |
| (in%)     |            |            |
| Army      | 3,03,748   | 37,342     |
| Navy      | 42,722     | 56,341     |
| Air Force | 56,454     | 58,269     |

Note: Spending on Army includes Jammu and Kashmir Light Infantry and spending on Navy includes Coast Guard. Sources: Expenditure Budget, Union Budget 2023-24; PRS. 

| RE         | BE       |
|------------|----------|
| Forces     |          |
| Actuals    |          |
| 2021-22    | 2022-23  |
| % change   |          |
| 2022-23 RE |          |
| to 2023-24 |          |
| BE         |          |
| Army       | 25,131   |
| Navy       | 45,029   |
| Air        |          |
| Force      |          |
| 53,217     |          |
| Coast      |          |
| Guard      |          |
| 3,189      |          |
| Total      | 1,26,566 |

Note: Capital outlay on Army and Air Force includes assistance for prototype development.  BE is budget estimate and RE is revised estimate. Sources: Expenditure Budget, Union Budget 2023-24; PRS. 

Capital outlay on the armed forces and the coast guard is estimated to increase by 11% in 2023-24 over the revised estimate of 2022-23.  In 2022-23, the capital outlay for Army and Navy was broadly in line with the budget estimates while capital outlay for the Air Force saw a 5% decline at the revised estimate stage.  In 2023-24, capital outlay of the army is estimated to increase 15% over the revised estimate of 2022-23.  This is followed by the Navy at 11% and the Air Force at 8%.  

## Committed Liabilities

Note that capital acquisition of the armed forces consists of two components: (i) committed liabilities, and (ii) new schemes.  Committed liabilities are payments anticipated during a financial year in respect of contracts concluded in previous years (as acquisition is a complex process involving long gestation periods).  New schemes include new projects which are at various stages of approval and are likely to be implemented in future.  Data related to committed liabilities has not been publicly disclosed for years after 2019-20.   

## Budget (Rs Crore)

| Modernisation    | Shortfall     |
|------------------|---------------|
| Year             |               |
| Committed        |               |
| liabilities      | budget        |
| 2016-17          | 73,553        |
| 2017-18          | 91,382        |
| 2018-19          | 1,10,044      |
| 2019-20          | 1,13,667      |

Note: Figures for committed liabilities have not been publicly disclosed after 2019-20. Sources: 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019; PRS. 

The Standing Committee on Defence (2019) expressed concern over the shortage in allocation to meet committed liabilities expenditure.9  The Committee observed that inadequate allocation for committed liabilities could lead to default on contractual obligations.9  It observed that if India were to default on payments, it will not go down well in international markets.9  The Committee has repeatedly recommended the Ministry to create a dedicated fund for committed liabilities and new schemes.6,8  So far, these funds have not been created.  In 2022, the Committee noted that having a separate fund would ensure that there are no difficulties in meeting deadlines for making payment towards committed purchases of the armed forces.6 

## Defence Services

In 2023-24, the allocation for the three defence services (including pension) is Rs 5,54,875 crore which is 93% of the total budget allocation of the Ministry.  Out of this, Army accounts for 57% of the budget while Navy and Air Force make up 17% and 19% of the allocation respectively.  The expenditure on Army, Navy, and Air Force is in the ratio 3.4:1:1.2.  The army has the highest pension obligations among the three services.  Excluding pension, the expenditure of Army, Navy, and Air Force is in the ratio 2.4:1:1.1 in 2023-24.  The allocation towards Army is expected to be largely unchanged in 2023-24 over the revised estimate of 2022-23 while for Navy and Air Force it is estimated to increase by 6% and 2%, respectively.      

% change 
RE 
BE 
2022-23 RE to 
Major 
Head 
Actuals 
2021-22 
2022-23 
2023-24 
2023-24 BE 
Army 
2,85,278 
3,41,221 
3,41,090 
0% 
Navy 
80,740 
93,244 
99,062 
6% 
Air Force 
98,024 
1,12,071 
1,14,723 
2% 
Other 
36,638 
38,256 
38,663 
1% 
Total  
5,00,681 
5,84,791 
5,93,538 
1% 

Note: Allocation for Army includes Jammu and Kashmir Light Infantry and for the Navy includes Coast Guard.  RE is revised estimate and BE is budget estimate. Sources: Expenditure Budget, Union Budget 2023-24; PRS. 

## Army: Substantial Expenditure On Salaries And Pension Leave Little Room For Spending On Modernisation

% of service 
Head 
Amount 
Allocated 
budget 
Salaries  
 1,18,889  
35% 
Pension 
 1,19,300  
35% 
Modernisation 
 30,163  
9% 
Maintenance 
 35,475  
10% 
Other forces 
 14,036  
4% 
Agnipath 
3,800 
1% 
Miscellaneous 
 19,426  
6% 
Total 
3,41,090 
100% 

Note: Salaries include salary for civilians and auxiliary forces. Modernisation funds for the Army is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Rolling Stock, (v) Rashtriya Rifles, and (vi) assistance for prototype development.  Other forces include revenue expenditure on Rashtriya Rifles, NCC, and Jammu and Kashmir Light Infantry. Sources: Expenditure Budget, Union Budget 2023-24; PRS.  
The Army is the largest of the three forces, both in terms of its budget as well as the number of personnel.  As of July 2022, the Army has an authorised strength of 13.03 lakh personnel (including officers and soldiers).10  In 2023-24, Rs 3,41,090 crore has been allocated for the Army out of which almost 70% is budgeted to be spent on salaries and pension.  Note that the salary component given in Table 7 above does not include the expenditure on salary for Rashtriya Rifles, NCC, Agnipath scheme, and Jammu and Kashmir Light Infantry as detailed breakup of their allocation is not available.  If the salary expenditure on these forces is included, Army's total spending on salaries will be even higher. Modernisation involves acquisition of state-of-the art technologies and weapons systems to upgrade and augment defence capabilities of the forces. Substantial expenditure on salaries and pension reduces the funds available for modernisation of the Army.  In 2023-24, 9% of the Army's budget will be spent on its modernisation.  After 2016-17, there has been a decrease in the modernisation funds allocated to the Army as a share of the total modernisation funds of the three forces.  In 2023-24, Army has been provided 23% of modernisation funds among the defence services. 

Sources: Union Budget Documents (various years); PRS. 

The Standing Committee on Defence (2018) had noted that modern armed forces should have onethird of its equipment in the vintage category, onethird in the current category, and one-third in the state-of-the-art category.11  However, Indian Army had 68% of its equipment in the vintage category, 24% in the current category, and 8% in the state-ofthe-art category.11  The Committee also noted that over the years, the Army has accumulated a substantial deficiency of weapons, stores, and ammunition.  It found that adequate attention has been lacking with respect to both policy and budget for modernising the aging armoury.11      

## Navy: Significant Increase In Funds Allocated For Modernisation Over Last Decade (Rs Crore)

% of service 
Head 
Amount 
Allocated 
budget 
Salaries  
        12,775  
13% 
Pension 
          6,776  
7% 
Modernisation 
        47,515  
48% 
Maintenance 
        13,599  
14% 
Other Revenue Spending 
7,883 
8% 
Agnipath 
300 
0.3% 
Miscellaneous 
10,214 
10% 
Total 
99,062 
100% 

Note: Salaries include salary for civilians.  Modernisation funds for the Navy is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Naval Fleet, and (v) Naval Dockyards and Projects.  Other revenue spending comprises revenue expenditure on Joint Staff and Coast Guard. Sources: Expenditure Budget, Union Budget 2023-24; PRS.  
The Navy has been allocated Rs 99,062 crore in the budget for 2023-24 (including the expenditure on pension and coast guard).  Almost half of the budget has been allocated for modernisation of the Navy.  
Within modernisation, Rs 24,200 crore has been allocated for the naval fleet and Rs 6,725 crore has been budgeted to be spent on naval dockyard/projects.  The expenditure on naval dockyard/projects is estimated to increase by 49% in 
2023-24 over the revised estimates of 2022-23. Modernisation expenditure of the Navy has increased at an annual rate of 10% between 2013-14 and 2023-24.  This has been driven by a sharp increase in the expenditure on modernisation in 2019-20 (29% year-on-year increase) and 2020-21 (58%).  In July 2021, the Ministry of Defence issued a request for proposal for acquiring six conventional submarines under Project 75 (India).12  The project is estimated to cost over Rs 40,000 crore.12  This led to the Navy's share in the total modernisation expenditure of the defence services increase to 38% in 2021-22.  In 2023-24, this share is estimated to be 36% of the overall modernisation budget.     

## Air Force: Lowest Growth In Modernisation Expenditure Among The Three Forces

The Air Force has been allocated Rs 1,14,723 crore in 2023-24 (including pension for retired personnel). This is an increase of 2% over the revised estimate of 2022-23.  Allocation for modernisation accounts for 48% of the Air Force's budget in 2023-24. The annual growth rate of expenditure for modernisation of the Air Force was the lowest among the three forces.  Between 2013-14 and 2023- 24, the modernisation expenditure of the Air Force is expected to increase annually at 4%.  However, the modernisation expenditure of the Air Force has consistently been the largest among the three forces. Between 2013-14 and 2023-24, more than 41% of the modernisation budget was allocated to Air Force.       

% of service 
Head 
Amount 
Allocated 
budget 
Salaries  
22,795 
20% 
Pension 
12,109 
11% 
Modernisation 
55,586 
48% 
Maintenance 
20,497 
18% 
Agnipath 
166 
0.1% 
Miscellaneous 
3,570 
3% 
Total 
1,14,723 
100% 

Note: Salaries include salary for civilians. Modernisation funds for the Air Force is calculated from the following heads of capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) special projects, and (v) assistance for prototype development. Source: Union Budget 2023-24; PRS. Note: RE is revised estimate and BE is budget estimate. Sources: Union Budget Documents (various years); PRS. 

In the past, the CAG has raised issues in relation to the capital acquisition process of the IAF. 13  In its report (2019), the CAG examined 11 contracts of capital acquisition signed between 2012-13 and 
2017-18, with a total value of approximately Rs 95,000 crore. It found that the current acquisition system was unlikely to support the operational preparedness of the IAF and recommended that the Ministry of Defence undertake structural reforms of the entire acquisition process.13  The Estimates Committee (2018) noted that there should be 70% serviceability of aircrafts since aircrafts have to undergo standard maintenance checks. 14  However, as of November 2015, the serviceability of aircrafts was 60%.14  Serviceability measures the number of aircrafts that are mission capable at a point in time. 

## Domestic Production Of Defence Equipment India Continues To Rely Significantly On Imports For Defence Equipment

According to data maintained by SIPRI, India was the largest importer of arms between 2011-2021 followed by Saudi Arabia, China, and Australia.  It accounted for 12% of the total volume of arms imported in the period from 2011 to 2021.  The Standing Committee on Defence (2022) expressed concerns over India's increasing import of arms and equipment.6  Between 2017-18 and 2021-22 (up to December 2021), 87 out of the 239 contracts for acquisition of military hardware worth Rs 1.18 lakh crore have been signed with foreign vendors including USA, Russia, Israel, and France.6  The defence equipment imported during this period includes helicopters, aircrafts, missiles, rifles, simulators, and ammunition. Between 2011-12 and 2020-21, imported capital acquisition by the defence services increased at an annual rate of 7.2% while capital equipment from indigenous sources increased at an annual rate of 9.7%.6  In 2020-21, 35% of the total capital acquisition was made from foreign sources as compared to 40% in 2011-12.  In 2021-22 (up to December 2021), India had imported 39% of its capital acquisition needs for the defence services. 

Note: Data for 2021-22 is up to December 2021. Sources: 28th Report: Capital Outlay on Defence Services, Procurement Policy, Defence Planning and Married Accommodation Project, Standing Committee on Defence, 2022; 
PRS. However, there is significant variation in the import dependence of the three defence services over the last decade.  This could be because warships and planes are more capital intensive in nature and hence may require to be imported if domestic supplies are not available.  Between 2011-12 and 2020-21, the average annual increase in expenditure on imported capital equipment for the army was 29% as compared to 6% from domestic sources.  For the Navy, spending on imported capital equipment increased at an average annual rate of 11% as compared to 8% from indigenous sources. 

The Standing Committee on Defence (2022) noted that although procurement from foreign vendors is less than from their Indian counterparts, still the value of imports has been constantly increasing since 2016-17.6  It recommended that Defence Public Sector Undertakings (DPSUs), Defence Research and Development Organisation (DRDO) and private industries work in tandem to produce not only import substitute equipment but also expand the export potential so that India becomes an exporter of defence equipment.  The Estimates Committee (2018) noted that dependence on foreign suppliers, especially for military hardware, makes India's security vulnerable as during emergency situations the supplier may not provide the required weapons or spare parts.14   

| Category                           | DPP-2016     | DAP-2020         |
|------------------------------------|--------------|------------------|
| Buy (Indian-IDDM)                  | 40% or more  | 50% or more      |
| Buy (Indian)                       | 40% or more  | 50% or more (for |
| indigenous design)                 |              |                  |
| Buy and Make (Indian)  50% or more |              |                  |
| of 'Make' part                     |              |                  |
| 50% or more of                     |              |                  |
| 'Make' part                        |              |                  |
| -                                  | 50% or more  | Buy (Global-     |
| Manufacture in India)              |              |                  |
| Buy (Global)                       | -            | 30% or more (for |
| Indian vendor)                     |              |                  |

Note: IDDM is indigenously designed, developed, and manufactured. Buy and Make category refers to an initial procurement of equipment from a foreign vendor, followed by transfer of technology. DPP is Defence Procurement Procedure.  
Sources: Press Information Bureau; PRS. 

In order to reduce import dependence, the central government has notified three positive indigenisation lists comprising of 310 items which will be placed under staggered import embargo and procured from indigenous sources.15  In addition, DPSUs have released three positive indigenisation lists for 1,238 items out of which 266 items have so far been indigenised.16  The Defence Acquisition Procedure (DAP), 2020 seeks to enhance indigenous content in the manufacturing of defence equipment.17  DAP is applicable for the acquisition of capital goods and services.  It also provides for leasing of assets as another category of acquisition which can substitute huge initial capital outlays with periodical rental payments.17  Among the categories listed in Table 10, Buy (Indian-IDDM) is given the highest priority in procurement.  This is followed by Buy (Indian) and Buy and Make (Indian).18 Over the last few years, there has been a significant increase in defence exports which has been primarily led by the private sector.19  Between 2016-17 and 2021-22, India's defence exports increased at an average annual rate of 53%.  The share of the private sector in defence exports increased sharply at an average annual rate of 114%.  The Ministry of Defence has set a target of achieving defence exports worth Rs 35,000 crore by 2024.20 

Exports by 
Year 
Total 
% share 
Exports 
Private 
Sector 
2016-17 
         1,521  
          194  
13% 
2017-18 
         4,682  
       3,163  
68% 
2018-19 
       10,746  
       9,813  
91% 
2019-20 
         9,116  
       8,008  
88% 
2020-21 
         8,435  
       7,271  
86% 
2021-22 
       12,815  
       8,800  
69% 

Sources: Starred Question No. 198, Lok Sabha, Ministry of Defence; PRS. 

## Defence Personnel

Recruitment in the armed forces is primarily done under two broad categories: (i) officers, and (ii) Personnel Below Officer Rank (PBOR).  PBORs are referred to as Junior Commissioned Officers (JCO)/Other Ranks (OR) in the Army while in the Navy and Air Force they are categorised as Sailors and Airmen respectively.  There are multiple sources of recruitment for both officers and PBORs in the armed forces.  For instance, to join as an officer in the army, candidates can be selected through the National Defence Academy, Indian Military Academy, or the Short Service Commission.21  

## Service Tenure Of Majority Of Recruits Under Agnipath Will Be Significantly Shorter Compared To Regular Cadre

The Report of the Group of Ministers on National Security (2001), had observed that there was a need to have a younger profile for the armed services so that they are at their fighting best at all times.22  The Kargil Review Committee (1999) had recommended that in order to have a young and fit army, the minimum service period to be eligible for pension should be reduced from 17 years to seven to 10 years.22 In June 2022, the Union Cabinet approved the Agnipath scheme for recruitment to the armed forces.23  Henceforth, Agnipath will govern enrolment under the armed forces for the PBOR category.23  Candidates recruited under the scheme will serve for four years and will form a separate rank under the armed forces, known as Agniveers.  
From each batch of Agniveers, up to 25% of the personnel will be enrolled in regular cadre of the armed forces.  According to the Ministry of Defence, recruitment of personnel under the Agnipath scheme will enhance the youthful profile of the armed forces.23  It would help in reducing the average age profile of the armed forces by around four to five years.23  According to the current sanctioned strength (as of July 2022), JCO/OR/sailors/airmen make up 95%, 87%, and 92% of the total sanctioned strength of personnel in the Army, Navy, and Air Force respectively.  However, when compared to PBOR personnel of various ranks, the service tenure of 75% of Agniveers is quite short. 

| Army      | Navy    |   Air Force  |
|-----------|---------|--------------|
| Rank      |         |              |
| Ter       |         |              |
| m         |         |              |
| Retirin   |         |              |
| g age     |         |              |
| Term      |         |              |
| Retirin   |         |              |
| g age     |         |              |
| Term      |         |              |
| Retirin   |         |              |
| g age     |         |              |
| 52        | 19-     |              |
| 22        |         |              |
| 42-48     | 15      |          52  |
| 22        |         |              |
| Sepoy/    |         |              |
| equivalen |         |              |
| t         |         |              |
| 49-52     | 24      |          49  |
| 24        |         |              |
| Naik/     |         |              |
| equivalen |         |              |
| t         |         |              |
| 49-52     | 26      |          49  |
| 28        |         |              |
| Havildar/ |         |              |
| equivalen |         |              |
| t         |         |              |
| 52        | 28      |          52  |
| 33        |         |              |
| Naib      |         |              |
| Subedar/  |         |              |
| equivalen |         |              |
| t         |         |              |
| 52-57     | 30      |          52  |
| 35        |         |              |
| Subedar/  |         |              |
| equivalen |         |              |
| t         |         |              |
| 54-57     | 34      |          54  |
| 37        |         |              |
| Subedar   |         |              |
| Major/    |         |              |
| equivalen |         |              |
| t         |         |              |

Note: JCO- Junior Commissioned Officers; OR- Other Ranks. Sources: Report of the Seventh Central Pay Commission, November 2015; PRS.   
While the impact of the Agnipath scheme on the operational preparedness of the armed forces may not be clear currently, it may help reduce the pension expenditure in the long run.  As at least 75% of the Agniveers will not get any pensionary benefits, it may help reduce expenditure on personnel.  After the expiry of four years, the people leaving the armed forces will get a Seva Nidhi package of Rs 11.7 lakh.23
4 "FinMin eyes new ways to boost defence fund", Business Standard, February 7, 2022, https://www.businessstandard.com/article/economy-policy/finance-ministry-eyes-newways-to-boost-non-lapsable-defence-fund-122020700004_1.html. 5 32nd Report, Creation of Non-Lapsable Capital Fund Account, Instead of the Present System, Standing Committee on Defence, Lok Sabha, August 2017, http://164.100.47.193/lsscommittee/Defence/16_Defence_32.pdf. 6 28th Report: Capital Outlay on Defence Services. Procurement Policy, Defence Planning and Married Accommodation Project (Demand No. 21), Standing Committee on Defence, Lok Sabha, March 2022, https://loksabhadocs.nic.in/lsscommittee/Defence/17_Defence_28 .pdf. 7 "Union Cabinet approves revision of pension of Armed Forces 
 
Pensioners/family pensioners under One Rank One Pension w.e.f. 

July 01, 2019", Press Information Bureau, Ministry of Defence, December 23, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1886168. 8 21st Report, Demands for Grants (2021-22) Capital Outlay on Defence Services, Procurement Policy, Defence Planning and Married Accommodation Project, Standing Committee on Defence, Lok Sabha, March 2021, https://loksabhadocs.nic.in/lsscommittee/Defence/17_Defence_21 .pdf. 9 3rd Report, Demands for Grants (2019-20), Capital Outlay on Defence Services, Procurement Policy, Defence Planning and Married Accommodation Project, December 2019, http://164.100.47.193/lsscommittee/Defence/17_Defence_3.pdf. 10 Strength of Officers in Defence Forces, Unstarred Question No. 1121, Lok Sabha, July 22, 2022, http://164.100.24.220/loksabhaquestions/annex/179/AU1121.pdf. 11 41st Report, Demands for Grants (2018-19) Army, Navy and Air Force, Standing Committee on Defence, Lok Sabha, March 2018, https://loksabhadocs.nic.in/lsscommittee/Defence/16_Defence_41 .pdf. 12 "MoD issues RFP for construction of six P-75(I) submarines for Indian Navy", Press Information Bureau, Ministry of Defence, July 20, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1737191. 13 Report No. 3 of 2019: Performance Audit Report of the Comptroller and Auditor General of Indian on Capital Acquisition in Indian Air Force, Comptroller and Auditor General, February 13, 2019. 14 29th Report: Preparedness of Armed Forces- Defence Production and Procurement, Committee on Estimates, July 25, 
 
2018, https://loksabhadocs.nic.in/lsscommittee/Estimates/16_Estimates_ 29.pdf. 15 Unstarred Question No. 2235, Lok Sabha, Ministry of Defence, July 29, 2022, http://164.100.24.220/loksabhaquestions/annex/179/AU2235.pdf. 16 Srijan Dashboard (Status of Positive Indigenisation List of DPSUs), Ministry of Defence, as accessed on February 6, 2022, https://srijandefence.gov.in/DashboardForPublic. 17 Defence Acquisition Procedure, 2020, Ministry of Defence, https://www.mod.gov.in/dod/sites/default/files/DAP202013Apr22 .pdf. 18 Defence Acquisition Procedure, 2020, Ministry of Defence, September 2020, https://www.mod.gov.in/sites/default/files/DAP2030new_0.pdf. 19 Starred Question No. 198, Lok Sabha, Ministry of Defence, July 29, 2022, https://pqals.nic.in/annex/179/AS198.pdf. 20 "Seven new defence companies, carved out of OFB, dedicated to the Nation on the occasion of Vijayadashami", Press Information Bureau, Ministry of Defence, October 15, 2021, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1764148. 21 How to Join, Join Indian Army, as accessed on February 7, 2023, https://joinindianarmy.nic.in/Default.aspx?id=530&lg=eng&. 22 Report of the Group of Ministers on National Security, February 19, 2001, https://www.vifindia.org/sites/default/files/GoM%20Report%20o n%20National%20Security.pdf. 23 "In a transformative reform, Cabinet clears 'Agnipath' scheme for recruitment of youth in the armed forces", Press Information Bureau, Ministry of Defence, June 14, 2022, https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1833747 

## Demand For Grants 2023-24 Analysis Road Transport And Highways

The Ministry of Road Transport and Highways formulates and administers policies for road transport, and transport research.  It is also involved with the construction and maintenance of the National Highways (NHs) through the National Highways Authority of India (NHAI), and the National Highway and Infrastructure Development Corporation Limited (NHIDCL).  It deals with matters relating to road transport, safety and vehicle standards, through the implementation of the Motor Vehicles Act, 1988.  This note looks at the proposed expenditure of the Ministry for 2023- 24, and some issues in the sector. 

## Overview Of Finances

The total expenditure of the Ministry in 2023-24 is estimated at Rs 2,70,435 crore.  This is 25% higher than the revised estimates for 2022-23.  The highest expenditure (60% of the total expenditure) is towards NHAI.  In 2023-24, NHAI is allocated Rs 1,62,207 crore, all of which is budgetary support. NHAI has a high debt burden due to increased borrowings in the past few years.  Upon the recommendations of several Committees, the Ministry has increased the budgetary allocation towards NHAI, and reduced its need to borrow from the market.  However, the existing debt needs to be serviced.  About 9% of the Ministry's allocation for 2023-24 will be used to service debt in the year.   

% 
 
Actuals 
21-22 
RE  
22-23 
BE  
23-24 
change 
(BE over 
RE) 
NHAI 
57,081 
1,41,606 
1,62,207 
14.5% 
66,237 
74,984 
1,07,713 
43.6% 
Roads and Bridges Total 
1,23,551 
2,17,027 
2,70,435 
24.6% 

Note: BE - Budget Estimate; RE - Revised Estimate. Sources: Demand for Grants 2023-24; Ministry of Road Transport and Highways; PRS.   
Capital expenditure for 2023-24 is estimated at Rs 2,58,606 crore, while revenue expenditure is estimated at Rs 11,829 crore.  The proportion of capital expenditure in total expenditure has increased from the revised estimates of 2022-23, from 95% to 96%. 

 
Announcements in the 2023-24 Budget Speech An Infrastructure Finance Secretariat will be established to assist stakeholders and encourage private investment in infrastructure such as roads, railways and power. 

Particularly vulnerable tribal groups (PVTGs) will be 
provided with facilities such as road and telecom 
connectivity, safe housing, and clean drinking water under 
the Pradhan Mantri PVTG Development Mission. 

Critical transport infrastructure projects for last and first mile 
connectivity for coal, steel, fertiliser and food grain sectors 
have been identified.  They will be taken up on priority with 
investment of Rs 75,000 crore, of which Rs 15,000 crore will 
come from private sources. 

## Fund Utilisation

In the past several years, the Ministry has been spending almost all of the funds allocated to it. Since 2018-19 onwards (except for 2019-20), the Ministry has been spending more than the amount allocated to it at the budget stage.  Between 2012- 13 and 2022-23, the amount allocated to the Ministry increased by 21%, while the actual expenditure increased by 25%.  
*Actual expenditure for 2022-23 refers to revised estimates. Sources: Demand for grants of the Ministry for various years; 
PRS. 

## Issues To Consider Improving Road Network

As of 2013, 90% of the passenger traffic and 67% of the freight traffic in the country was carried on the road network.1  The Indian network of roads comprises National Highways (NHs), State Highways, District Roads, Rural Roads, Urban Roads and Project Roads.  As of March 2019, 71% of all roads were rural roads, while NHs were 2%. District roads formed 10% of all roads, and urban roads 9%.1  NHs include roads that connect major ports, neighbouring countries, capitals of states, and roads required for strategic considerations. The Ministry of Road Transport and Highways is responsible for the construction and maintenance of NHs.  It may also designate any road as an NH. 

The National Transport Development Policy Committee (2013) observed that instead of looking at roads in isolation, they must be looked at as an integrated system of transport.2  This implies ensuring that the primary road network (NHs) connects to major ports, railway stations, airports, and capital cities.  The Ministry seeks to improve road network and connectivity by upgrading state highways to national highways, improving construction of national highways, and creating multimodal transportation networks.    
Road length: In 2021-22, the total road length was 
63 lakh kilometres, which has increased at an average annual rate of 3.7% from 2015.3  During this period, the length of NHs and rural roads increased by at an annual average rate of 7.8% each.  Between 1970-71 and 2018-19, the share of NHs in total roads has decreased from 2.6% to 2%. However, there has been a marginal increase in the share from 2011 onwards (see **Figure 2**).  The length of NHs (in kilometres) has increased at a pace of 4% between 1970-71 and 2018-19.4 
The share of state highways in total highways has reduced from 6% in 1970-71 to 3% in 2018-19.4 This may be because several state highways have been notified as NHs.4  State highways typically link important cities, towns, tourist places, minor ports, and connect them to NHs.  These are constructed and managed by state governments through state public works departments.   
Construction of NHs: The Ministry targeted to construct 12,200 km of NHs in 2022-23, of which 5,774 km (47%) has been constructed as of December 2022.5  As part of the Ministry's target to construct 60,000 km of NHs between 2019-20 and 2023-24, it envisaged to construct 13,000 km in 2023-24.  However, as of February 9, 2023 the target has not been finalised.5  Between 2014-15 and 2017-18, the Ministry missed its annual NH 
construction targets by about 45% (See **Figure 3**).  
However, from 2018-19 onwards, the targets have been lowered while the Ministry has exceeded the revised targets.  In 2021-22, the Ministry missed its construction target by 18%.  Note that the targets may have declined since NHAI is focusing more on widening existing highways, than constructing new expressways. 

 
Sources: Programme Implementation Reports 2022; PRS. 

Conversion of roads into NHs: NHAI notifies several state highways as NHs, and takes it upon itself to maintain and widen these roads.  The criteria for declaring state roads as NHs include: (i) roads running through the length and breadth of the country, (ii) roads connecting adjacent countries or state capitals or major ports, (iii) strategic roads in hilly or isolated areas.6 As of February 2023, 1.45 lakh km of state roads have been notified as NHs.7  In 2022-23, about 3,639 km of state roads have been notified as NHs so far.8  
Road Density is defined as the average road length per 1,000 sq km.  It indicates how much of a given area is connected by road.  Road density in India has increased by 4.4% between 2011-12 and 2018- 19.  Among all roads, rural roads have the highest density, followed by district roads (see **Figure 5**).  
In 2018-19, for every 1,000 sq km, there were rural roads of length 1,102 km.  In comparison, there were 40 km of NHs for every 1,000 sq km.   
Sources: Basic Roads Statistics 2018-19; PRS. 

There is regional variation in road density across states.  States such as Delhi (10,904 km per 1,000 sq km), Kerala (6,690), Assam (5,088), and Goa (5,051) have high road density.  States such as Jammu and Kashmir, Arunachal Pradesh, Mizoram, and Rajasthan have lower road density. 

## Bharatmala Pariyojana

As of 2021-22, 1,266 km of road has been built.3  This 
includes coastal and port connectivity roads, expressways, 
national corridors, and economic corridors.  Cumulatively, 
4,752 km of road length has been completed under 
Bharatmala Phase - I.3  The Scheme is implemented by 
NHAI, National Highways and Infrastructure Development 
Corporation, and the Roads Wing of the Ministry.    

Expenditure for Bharatmala is met from various funds 
meant for NHAI.  In 2023-24, Rs 42,772 crore worth of 
spending is meant to be met from these funds.  

Roads in north-eastern regions: Connectivity in hilly regions such as north-eastern states in India is a challenge.  The Ministry develops road network in north-eastern states under the Special Accelerated Road Development Programme (SARDP-NE).9  The programme seeks to provide connectivity to backward and remote areas and ensure that headquarters in the north-eastern region seek to be connected by at least two-lane highway standards.  The average road density in northeastern states is 2,259 km per thousand sq km.4 The rural network in north eastern states is relatively better compared to other categories of road.  Among the north-eastern states, Sikkim has the highest proportion of surfaced roads (76%) followed by Mizoram (67%).4 
Movement of freight by road: The National Transport Development Policy Committee (2013) observed that roads are a preferred mode of transport for carrying small loads over short distances to remote or easily accessible destinations.  For example, it is preferable to transport foodgrain by road, across distances of 
 
about 200 km.  At distances greater than 200 km, rail is a preferred mode.  This is true despite accounting for delays at intermodal nodes where grain is transferred from/to trucks.2   
In India, passengers and freight transported by road have increased between 2011-12 and 2017-18 (see Figure 6).  The amount of freight transported by road has increased by 9.7%, while the number of passengers has increased by 13%.1  In 2020, roads carried 71% of all freight, compared to the 18% carried by rail.10   
Note: Freight is in billion tonne kilometre and passengers are billion kilometres. Sources: Road Transport Yearbook 2018-19; PRS 

## Pm Gati Shakti

The PM Gati Shakti National Master Plan (NMP) was 
launched in October 2021 to provide for coordinated 
development of transport.  It seeks to create a system for 
interconnected and multimodal transportation networks.  It 
is expected that this would lead to economic development, 
improved trade competitiveness, promotion of exports and 
employment generation.   

Different infrastructure sector projects such as National 
Highways, Railways, Waterways, or Telecom that cater to 
development requirements are envisaged to be developed 
in synergy.  The NMP will rely on data on geographical 
features and land records for planning and implementation. 

In order to reduce complexities involved in integration of 
networks and avoid duplication of effort NMP lays down an 
implementation framework. The framework consists of: (i) 
Empowered Group of Secretaries (headed by the Cabinet 
secretary), to review and monitor implementation of the 
scheme along with ensuring logistical efficiency, (ii) Network 
Planning Group (consisting of heads of network planning 
wings of infrastructure ministries), to assist the empowered 
group of secretaries, and (iii) Technical Support Unit 
(consisting of domain experts from infrastructure sectors), 
responsible for overall integration of networks and 
enhancing optimisation. 

## Financing Road Infrastructure

Investment in road infrastructure is long-term, and returns are typically seen several years after construction.  Currently roads are financed through government and private sources.  Funding from government sources includes budgetary allocations, which are financed from taxes, cesses, or dedicated road funds.  Under private financing, typically the private developer builds a road, and in return has the right to collect toll for a specified period of time.  The developer is responsible for the maintenance of roads during this period.  Most national highway projects are implemented under public private partnership.  Variants under this model include: (i) Build Operate Transfer (Toll), (ii) Build Operate Transfer (Annuity), and Hybrid Annuity Model (See Annexure).  Hybrid Annuity Model was introduced to increase improve project implementation, and revive private sector interest. As of 2019, 44% of all road projects were built under the HAM model.11 Publicly funded projects are usually given to contractors under various contract models such as the Engineering Procurement Construction (EPC) or Item Rate contract.  Under EPC, the maintenance period of a project (built by a contractor) is about four years.  Under the item rate contract, a project designed by the government, and executed by the contractor.  The contractor is responsible for correcting defects for a period of 1-
3 years.  **Figure 7** indicates investment sources for road construction for the past six years.  During this period, private investment has been low, and public investment and extra-budgetary borrowing is high.   

## Funds Under The Ministry

The Ministry manages its finances through various funds meant for different purposes (types of roads). These include the Central Road and Infrastructure Fund (CRIF), Permanent Bridge Fee Fund (PBFF), National Investment Fund and Monetisation of National Highways Fund.  Until 2022-23, a majority of the Ministry's expenditure was managed through transfers from the CRIF.  
However, in 2023-24 allocation for CRIF has reduced by almost 100%.  (See **Table 2**).   

% 
 
Actuals 
21-22 
RE  
22-23  
BE 
23-24 
change 
BE over 
RE 
CRIF 
39,410 
1,13,600 
1,400 
-99% 
PBFF 
12,670 
18,006 
20,807 
16% 
NIF 
8,430 
10,700 
10,565 
-1% 
NHF 
5,000 
10,000 
10,000 
0% 

Note: CRIF - Central Road and Infrastructure Fund; PBFF - Permanent Bridge Fee Fund; NIF - National Investment Fund; NHMF - Monetisation of NHs Fund. Sources: Demand for Grants 2023-24, Ministry of Road Transport and Highways; PRS. 

CRIF was established to develop and maintain NHs and state highways.  It is a non-lapsable fund, financed by the road and infrastructure cess which is imposed on manufacture and imports of petroleum products.  The amount is released to the NHAI and various state/UT governments for developing infrastructure.  The reduction in allocation through CRIF may be on account of a 58% decrease in the collection of road and infrastructure cess at the revised stage in 2022-23.12 The PBFF is funded by revenue collected through: (i) fees levied for use of certain bridges on NHs, (ii) national highway toll, and (iii) revenue share received on some PPP projects.  These funds are released to NHAI.  In 2023-24, Rs 21,460 crore is budgeted as revenue from fees and tolls, 8% greater than the revised estimates for 2022-23. The National Investment Fund receives proceeds from disinvestments.  It is used to fund special road development projects in the north-east.13  In 2023- 24 transfer from NIF is estimated at Rs 10,565 crore, same as the budget estimates for 2022-23. 

The National Highways Fund is financed by monetising certain public-funded national highway projects.  This includes transferring maintenance of certain stretches to private contractors on a longterm basis.  In 2023-24, Rs 10,000 crore is estimated to be transferred from NHF, lower than the budget estimate of Rs 20,000 in 2022-23. 

## Expenditure By Nhai

NHAI's expenses are primarily met through the funds mentioned above.  It may also raise funds through market borrowings and as loans from multilateral agencies.  These are used for: (i) acquiring land, (ii) project expenditure, and (iii) repaying loans and interest payments.   

## Increased Budgetary Allocation To Nhai

Institutions like NHAI raise sources through internal and extra-budgetary resources (IEBR) by appropriating surplus toll revenues, or through lines of credit.  In 2022-23, noting the rising debt burden of NHAI, the government increased its budgetary allocation and reduced its dependence on IEBR.  In 
2023-24 NHAI has been allocated Rs 1,62,207 crore, 15% more than the revised estimates for 2022-23.  As of March 2022, NHAI's total outstanding debt was Rs 3,48,522 crore.   
The Standing Committee on Transport (2022) 
noted that although the budgetary allocation to NHAI has increased, it may not be enough to meet the investment requirements for developing NHs.14 It recommended the Ministry to resolve the apprehensions of the private sector and encourage them to invest in infrastructure.14 Between 2017-18 and 2019-20, the amount raised by NHAI from extra budgetary sources formed a majority of its funding (See Figure 7).  From 2022-
23 onwards, almost all of NHAI's finances come from budgetary allocation.  The total money spent by NHAI between 2017-18 and 2023-24 is estimated to increase by 14%. 

Sources: Expenditure Budget for various years; PRS. 

The Standing Committee on Transport (2016) had observed that several long-term loans disbursed for the road sector are turning into non-performing assets.  Project bids are often made without proper study and are awarded in a hurry.  This results in stalling of projects, and concessionaires leave midway.  There are several factors that affect the implementation of NH construction.  These include: (i) pre-construction activities, (ii) fund mobilisation capacity of contractors, and (iii) climatic conditions like monsoons.  The Comptroller and Auditor General of India (2016) had also noted some procedural inefficiencies with NHAI.  For instance, it was unable to earn toll on projects due to delay in approvals, operations and procedural lapses.15 

Year 
Debt 
Repayment 
Interest payment as a 
% of total repayment 
2020-21 
25,497 
74% 
2021-22 
40,191 
59% 
2022-23 
31,282 
79% 
2023-24 
24,189 
132% 
2024-25 
30,552 
78% 

Sources: Rajya Sabha Question No. 2017, August 2022; PRS. 

Initiatives such as streamlining the land acquisition process, improving cash flow to contracting agencies, securitisation of road sector loans, termination of stuck projects, and revamping dispute resolution are being undertaken to complete stalled projects.16  For projects that are stalled due to the contractor, penal action is taken as per the contract. The Committee on Revisiting and Revitalising the PPP Model of Infrastructure Development (2015) recommended setting up an independent regulator for the roads sector to encourage private participation and regulate their activity.17  It had also noted that service delivery, such as constructing roads meant for citizens is the responsibility of the government, and should not be evaded through PPPs. 

## Investment Infrastructure Trusts

An Investment Infrastructure Trust (InvIT) is a collective 
investment vehicle that pools funds from long-term investors to 
acquire income-generating infrastructure from developers.  InvITs 
invest in Special Purpose Vehicles through equity or debt 
instruments.  In 2019, NHAI was authorised to set up InvITs for 
monetising completed NHs.18 

As of November 2021, NHAI's InvIT was listed on Indian stock 
exchanges, and Rs 8,011 crore was raised from investors and 
banks.  The Canda Pension Plan Investment Board and Ontario 
Teachers' Pension Plan Board have invested with each of them 
holding 25% units.3 

Under the current tax laws, interest and dividend income earned 
by InvITs and distributed to investors is taxed from the investors.  
However, loan repayment distributions to investors are not taxed, 
despite those amounting to their income.19  The Ministry of 
Finance noted that the current special tax does not seek to 
exempt tax at two levels.  Hence from 2023-24 onwards, income 
received as debt repayment will be taxed from an InvIT investor. 

As per the National Monetisation Plan, 5,000 km of 
road worth Rs 30,000 crore was to be monetised 
during 2021-22.3  NHAI has monetised 390 km of 
road through InvITs.  About 450 km of road has 
been bid out through Toll Operate Transfer (TOT). 

## Cost Of Land Acquisition

In the past five years, the land acquisition cost of NHAI has reduced, while the project expenditure costs have been rising.  Although the share of loan repayment is lower than other costs, it rose by 38% between 2016-17 and 2020-21.  Land acquisition costs may have reduced since several states have agreed to bear at least 25% of the land acquisition costs for projects executed through NHAI.  For instance, Kerala has agreed for such an arrangement.  States such as Andhra Pradesh, Telangana and Madhya Pradesh have also proposed similar land sharing arrangements.20 Although the share of land acquisition costs has reduced, delay in projects due to land acquisition persists.  As of January 1, 2023 the Ministry of Statistics and Programme Implementation was monitoring 724 projects related to road transport.  
Of these, 428 have been delayed, and 105 have cost over-runs.21     

## Maintenance And Repair Of Highways

The onus of maintaining public funded projects primarily falls on the Ministry or NHAI or state public works departments.  The Standing Committee on Transport (2020) noted that the amount of funds allocated for maintaining NHs is miniscule, given the vast length of highways across the country.22  Several committees, including NITI Aayog, have recommended that maintaining existing roads should be prioritised over constructing new NHs.23  It also recommended that 10% of the Ministry's budget be spent on maintenance of roads.  Further, it has been recommended that the Ministry be allocated 100% 
of its demand for maintenance and repair.  Figure 10 indicates the allocation for maintenance against the demand by the Ministry. In 2023-24, the Ministry has been allocated Rs 2,600 crore for maintaining highways (1% of the Ministry's budget).  Between 2017-18 and 2022-
23, allocation for maintenance has remained fairly constant, while the proportion of allocation with respect to demand has increased.  This is because demand itself by the Ministry for maintenance has reduced.   

## Road Safety

In 2023-24, the Ministry has allocated Rs 330 crore for road safety, 20% greater than the revised estimates for 2022-23.  Between 2017-18 and 2022-23, the Ministry has underutilised road safety funds by about 41%.     
Allocation towards road safety provides for safety programmes, relief support for accident victims, strengthening public transport, research and development, and setting up of facilities on NHs. The 2023-24 allocation for road safety is 0.1% of the Ministry's budget.  However, revised estimates in 2022-23 are greater than the actual expenditure in the past five years. The Standing Committee on Transport (2020) suggested that the Ministry seek higher fund allocation towards road safety, and driver training programmes.22  In 2021, there were 4.1 lakh road accidents, of which 1.5 lakh were fatal.24  The number of road accidents increased by 13% from 2020 to 2021.  The increase may be due to a low base, i.e., reduced accidents during COVID when mobility was restricted.  Compared to 2019, road accidents decreased by 8%.28  However, fatalities increased by 2%.  Further, 31% of all accidents took place on NHs.  In 2021, the major cause of all road accidents on NHs was over-speeding (74%), followed by driving on the wrong side (4%).  Note that 41% of all accidents of NHs involved a twowheeler vehicle.28 As per the World Road Statistics, 2018, India ranks first in the number of road accident deaths (among 199 countries reported), followed by China, and the US.  The United States has a longer road network than India (66 lakh km).  As per the WHO Global Report on Road Safety 2018, about 11% of the accident-related deaths in the world occur in India.25  The Motor Vehicles (Amendment) Act, 2019 seeks to prevent road accidents.  It provides for penalties for road traffic violations, electronic monitoring, and greater penalties for underage driving.26  In 2021, the Ministry stated that implementation of the Act has led to improved road safety.3   
The Standing Committee (2021) observed that the number of ambulances (111), patrol vehicles (509), tow away cranes (443) available with the Ministry are not commensurate with the size of the NH network in India.22  In September 2021, the central government constituted the National Road Safety Board, which will advise the central and state governments on all aspects of road safety and traffic management.27  The Ministry has notified several Rules to implement provisions of the Act, such as: (i) protection of Good Samaritans, (ii) conditions for states to levy higher penalties than those in the Act, and (iii) amendments to obtaining driving licenses, among others.28   
There are several best practices followed by different countries to minimise road accidents and 
 
3 Annual Report 2021-22, Ministry of Road Transport and Highways, https://morth.nic.in/sites/default/files/Annual%20Report_21-22- 1.pdf. 4 Basic Road Statistics in India (2018-19), Ministry of Road Transport and Highways, May 25, 2022, https://morth.nic.in/sites/default/files/Basic%20Road%20Statisti cs%20in%20India-2018-19.pdf. 5 Unstarred Question No. 1231, Lok Sabha, Ministry of Road Transport and Highways, February 9, 2023, https://pqals.nic.in/annex/1711/AU1231.pdf. 6 Unstarred Question No. 1189, Lok Sabha, Ministry of Road Transport and Highways, February 9, 2023, https://pqals.nic.in/annex/1711/AU1189.pdf. 7 Starred Question No. 111, Lok Sabha, Ministry of Road Transport and Highways, February 9. 2023, https://pqals.nic.in/annex/1711/AS111.pdf. 8 Unstarred Question No. 202, Lok Sabha, Ministry of Road Transport and Highways, February 2, 2023, https://pqals.nic.in/annex/1711/AU202.pdf. 9 "Special Accelerated Road Development Programme for Development of Road Network in the North Eastern States", Press Information Bureau, Ministry of Road Transport and Highways, February 5, 2013, https://pib.gov.in/newsite/PrintRelease.aspx?relid=92040. 10 Fast Tracking Freight in India, NITI Aayog and RMI India, June 2021, https://www.niti.gov.in/sites/default/files/2021- 06/FreightReportNationalLevel.pdf. 11 'Report No. 285, 'Action Taken by the Government on the Recommendations/Observations of the Committee contained in its Two Hundred and Seventy Eighth Report on Demands for Grants (2020-21) of Ministry of Road Transport and Highways', Standing Committee on Transport, Tourism and Culture, February 3, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/148/285_2021_7_12.pdf. 12 Receipts Budget, Union Budget of India 2023-24, https://www.indiabudget.gov.in/doc/rec/tr.pdf. 13 Special Accelerated Road Development Programme in North East (SARDPNE), Ministry of Development of North Eastern their risks.  For instance, Sweden has a road safety policy based on the principles that: (i) human life is paramount, (ii) providers of services are responsible for the safety of the system, and (iii) road transport systems must minimise the opportunity for human error.2  As per the policy, the Swedish Road Administration is responsible for road safety.  The policy helped in upgrade single lane roads to 2+1 lanes with central cable barriers. The Australian safety system focuses enforcement and penalties to deter users from breaking rules.2  It also encourages high quality active and passive safety systems in vehicles to reduce impact forces on occupants and those who are struck. 

## 

Transport, Tourism and Culture, March 14, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/166/317_2022_9_11.pdf. 15 Chapter 12: Ministry of Road Transport and Highways, Report No. 9 of 2017, 2016, Compliance Audit Union Government Commercial, Comptroller and Auditor General of India, April 5, 2017. 16 Starred Question No. 76, Rajya Sabha, Ministry of Road Transport and Highways, December 14, 2022, https://pqars.nic.in/annex/258/AS76.pdf. 17 "Report of the Committee on Revisiting and Revitalising Public Private Partnership Model of Infrastructure", Department of Economic Affairs, Ministry of Finance, November 2015, https://www.pppinindia.gov.in/infrastructureindia/documents/10 184/0/kelkar+Pdf/0d6ffb64- 4501-42ba-a083 ca3ce99cf999. 18 NH-37012/01/2019-H, Ministry of Road Transport and Highways, January 1, 2020, https://morth.gov.in/sites/default/files/circulars_document/Circu lar%20Invit.pdf. 19 Memorandum Explaining the Provisions in the Finance Bill, 2023, https://www.indiabudget.gov.in/doc/memo.pdf. 20 Unstarred Question No. 788, Rajya Sabha, Ministry of Road Transport and Highways, July 26, 2021, https://pqars.nic.in/annex/254/AU788.pdf. 21 Project Implementation Overview - December 2022, Ministry of Statistics and Programme Implementation, http://www.cspm.gov.in/english/pio_report/PIO_Dec_2022.pdf. 22 Report No. 278, 'Demands for Grants (2020-21) of Ministry of Road Transport and Highways', Standing Committee on Transport, Tourism and Culture, March 12, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/127/278_2020_9_15.pdf. 23 Strategy for New India @ 75, NITI Aayog, November 2018, https://niti.gov.in/sites/default/files/2019- 01/Strategy_for_New_India_0.pdf. 24 Road Accidents in India, Ministry of Road Transport and Highways, December 12, 2022, https://morth.nic.in/sites/default/files/RA_2021_Compressed.pdf . 25 Road Accidents in India 2019, Transport Research Wing, Ministry of Road Transport and Highways, http://morth.nic.in/sites/default/files/RA_Uploading.pdf 26 Motor Vehicles (Amendment) Act, 2019, https://egazette.nic.in/WriteReadData/2019/210413.pdf. 27 'Notification for constitution of National Road Safety Board', Press Information Bureau, Ministry of Road Transport and Highways, October 5, 2021, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1761051.  

## Annexure: Road Transport And Highways

Types of Public Private Partnership Models: 

- 
Build Operate Transfer (Toll): The developer is responsible for: (i) designing and developing the project, (ii) 
conducting operation and maintenance during the entire concession period.  The developer also has the right to collect 
toll during the specified period. 
- 
Build Operate Transfer (Annuity): This model is the same as BOT (Toll), except that the developer receives payment 
in annuity (by the government) in return for developing and maintain a road.  The government has the right to collect 
toll, after a section is open for commercial operation. 
- 
Hybrid Annuity Model (HAM): Under this model, the government or its executing agency pays 40% of the project 
cost as a grant to the private developer.  The private developer invites bids for the 60%, which is paid back as annuity over 15 years.  The repayment includes interest, operations and management, and return on equity.  The government has 
the right to collect toll during the maintenance period.  This model is widely used for financing NHs in India. 

Loan repayment 
Year 
Land Acquisition 
Project 
and interest 
Others 
Total 
Expenditure 
payment 
2016-17 
17,823 
20,843 
5,130 
7,010 
50,806 
2017-18 
32,143 
30,648 
14,612 
8,946 
86,349 
2018-19 
36,048 
40,380 
14,612 
6,685 
97,726 
2019-20 
28,542 
49,785 
19,420 
6,319 
1,04,065 
2020-21 
35,858 
61,484 
25,633 
2,375 
1,25,350 

Sources: Annual Reports of NHAI; PRS. 

| Year     | Budgeted    | Actual    | Percentage of utilisation    |
|----------|-------------|-----------|------------------------------|
| 2012-13  | 30,798      | 22,537    | 73%                          |
| 2013-14  | 31,302      | 28,400    | 91%                          |
| 2014-15  | 34,345      | 33,048    | 96%                          |
| 2015-16  | 45,752      | 46,913    | 103%                         |
| 2016-17  | 57,976      | 52,232    | 90%                          |
| 2017-18  | 64,900      | 61,015    | 94%                          |
| 2018-19  | 71,000      | 77,301    | 109%                         |
| 2019-20  | 83,016      | 78,249    | 94%                          |
| 2020-21  | 91,823      | 99,159    | 108%                         |
| 2021-22  | 1,18,101    | 1,23,551  | 105%                         |
| 2022-23* | 1,99,108    | 2,17,027  | 109%                         |

Note: Actual expenditure for 2022-23 refers to revised estimates. Sources: Expenditure budget of various years; PRS.  

State/UT 
Existing NH 
length (km) 
% of NH 
Length of existing NH in 
km/ 1000 sq km 
Length of existing NH 
in km/ lakh population 
Maharashtra 
17,757 
13.4% 
57.7 
15.8 
Uttar Pradesh 
11,737 
8.9% 
49.2 
5.9 
Rajasthan 
10,342 
7.8% 
30.2 
15.1 
Madhya Pradesh 
8,772 
6.6% 
28.5 
12.1 
Karnataka 
7,335 
5.5% 
38.2 
12.0 
Andhra Pradesh 
6,913 
5.2% 
41.8 
13.8 
Tamil Nadu 
6,742 
5.1% 
51.8 
9.3 
Gujarat 
6,635 
5.0% 
33.8 
11.0 
Odisha 
5,762 
4.4% 
37.0 
13.7 
Bihar 
5,358 
4.0% 
56.9 
5.2 
Assam 
3,909 
3.0% 
49.8 
12.5 
Telangana 
3,795 
2.9% 
33.1 
10.8 
West Bengal 
3,664 
2.8% 
41.3 
4.0 
Chhattisgarh 
3,606 
2.7% 
26.7 
14.1 
Jharkhand 
3,367 
2.5% 
42.2 
10.8 
Punjab 
3,274 
2.5% 
65.0 
11.8 
Haryana 
3,166 
2.4% 
71.6 
12.5 
Uttarakhand 
2,949 
2.2% 
52.8 
29.2 
Himachal Pradesh 
2,607 
2.0% 
46.8 
38.0 
Arunachal Pradesh 
2,537 
1.9% 
30.3 
183.5 
Jammu & Kashmir 
2,423 
1.8% 
10.9 
19.3 
Kerala 
1,782 
1.3% 
45.8 
5.3 
Manipur 
1,750 
1.3% 
78.4 
64.3 
Nagaland 
1,548 
1.2% 
93.4 
78.1 
Mizoram 
1,423 
1.1% 
67.5 
130.4 
Meghalaya 
1,156 
0.9% 
51.5 
39.0 
Tripura 
854 
0.6% 
81.4 
23.3 
Sikkim 
463 
0.4% 
65.2 
76.2 
A & N Islands 
331 
0.3% 
40.1 
87.0 
Goa 
293 
0.2% 
76.8 
20.1 
Delhi 
157 
0.1% 
105.9 
0.9 
Dadra & Nagar Haveli 
31 
0.02% 
63.7 
9.0 
Daman & Diu 
22 
0.02% 
196.4 
9.1 
Puducherry 
27 
0.02% 
54.3 
2.2 
Chandigarh 
15 
0.01% 
134.0 
1.4 
TOTAL 
1,32,502 
 100% 
40.2 
11.0 

Sources: Ministry of Road Transport and Highways; PRS. 

 
Passenger Vehicles 
Commercial Vehicles 
Three wheelers 
Two wheelers 
Quadricycles 
Total 
2016-17 
30,47,582 
7,14,082 
5,11,879 
1,75,89,738 
- 
2,18,63,281 
2017-18 
32,88,581 
8,56,916 
6,35,698 
2,02,00,117 
- 
2,49,81,312 
2018-19 
33,77,389 
10,07,311 
7,01,005 
2,11,79,847 
627 
2,62,66,179 
2019-20 
27,73,519 
7,17,593 
6,37,065 
1,74,16,432 
942 
2,15,45,551 
2020-21 
27,11,457 
5,68,559 
2,19,446 
1,51,20,783 
-12 
1,86,20,233 
2021-22 
30,69,499 
7,16,566 
2,60,995 
1,34,66,412 
124 
1,75,13,596 
Total 
1,82,68,027 
45,81,027 
29,66,088 
10,49,73,329 
1,681 
 

Sources: SIAM; PRS. 

Table 8: Length of roads between 2015 and 2019 (in km) 
 
2015 
2016 
2017 
2018 
2019 
NHs 
97,991 
1,01,011 
1,14,158 
1,26,350 
1,32,499 
State Highways 
1,67,109 
1,76,166 
1,75,036 
1,86,908 
1,79,535 
District Roads# 
11,01,178 
5,61,940 
5,86,181 
6,11,268 
6,12,778 
Rural Roads 
33,37,255 
39,35,337 
41,66,916 
44,09,582 
45,22,228 
All Roads 
54,72,144 
56,03,293 
58,97,671 
62,15,797 
63,31,757 

Sources: Basic Road Statistics 2018-19; PRS. 

## Demand For Grants 2023-24 Analysis Railways

The Railways finances were presented on February 1, 2023, by the Finance Minister Ms. Nirmala Sitharaman along with the Union Budget 2023-24. Indian Railways is a commercial undertaking of the central government.1  The Ministry of Railways administers Indian Railways and policy formation through the Railway Board. Expenditure of Railways is financed through: (i) its internal resources (mainly freight and passenger revenue), (ii) budgetary support from the central government, and (iii) extra-budgetary resources (primarily borrowings but also includes institutional financing and public-private partnerships).  Railways' working expenses (salaries, pension, and asset maintenance) are met through its internal resources.  Railways generate some surplus, which is not enough to cover its capital expenditure plans (such as construction of lines and procurement of wagons).  Capital expenditure is supported by the grant from the central government and extra-budgetary resources. This note looks at the proposed expenditure of Railways for 2023-24, and the state of its finances over the last few years. 

## Highlights

- 
Revenue:  Railways' internal revenue for 
2023-24 is estimated at Rs 2,65,000 crore, an increase of 9% over the revised estimates of 2022-23.  In 2022-23, revenue is estimated to be 1% higher than the budget estimate (see Table 1 on next page). 
- 
Traffic revenue:  In 2023-24, traffic revenue 
is estimated to be Rs 2,64,600 crore, comprising 99.8% of the total revenue.  68% of the traffic revenue is estimated to come from freight services (Rs 1,79,500 crore), and another 26% from passenger services (Rs 70,000 crore).  Both passenger and freight revenue are estimated to increase by 9% over the previous year. 
- 
Revenue Expenditure:  The total revenue 
expenditure in  2023-24 is projected to be Rs 2,62,790 crore, an increase of 9% over revised estimates of 2022-23.  Expenses towards salaries and pension are estimated to comprise 64% of the total revenue expenditure.   
- 
Capital expenditure in 2023-24 is estimated 
at Rs 2,60,200 crore, an increase of 6% over the previous year.  There is a significant change in the pattern of financing capital expenditure.  In 2023-24, 92% of capital expenditure is estimated to be financed through 
budgetary support from the central government and 7% from extra budgetary resources.  In comparison, in 2022-23, their contributions are estimated at 65% and 33%, respectively. 

- 
Operating Ratio:  Operating Ratio is ratio of 
working expenses to the receipts from traffic. A lower ratio implies better profitability and availability of resources for capital spending. In 2023-24, the Railways' operating ratio is estimated to be 98.45%.  This is marginally higher than operating ratio for 2022-23 as per revised estimates (98.22%).  In 2021-22, 
operating ratio was 107.39%. 

## Diminishing Revenue Surplus

In recent years, Railways' revenue earnings have barely been able to keep up with its revenue expenditure (Figure 1).  Between 2013-14 and 2023-24, Railways' revenue expenditure is estimated to grow at an annualised rate of 7.2%, faster than its revenue receipts (annual growth of 6.3%).  Revenue expenditure includes spending on items such as salaries, pension, fuel, and maintenance of assets.  In 2023-24, as per budget estimates, Railways is expected to observe a marginal surplus of Rs 2,210 crore (which would finance less than 1% of its capital expenditure). 

 
Sources: Union Budget documents of various years; PRS. 

In 2021-22, Railways observed a revenue deficit of Rs 15,025 crore.  In 2019-20 and 2020-21 (COVID year), Railways managed to observe a revenue surplus by reducing the appropriation towards pension fund.  The gap in resources for pension for these years was filled through a special loan of Rs 79,398 crore from the central government in 2020- 21.  During these three years, Railways' passenger  

2021-22 
Actuals 
 
  
 
Receipts 

 
1 Passenger Revenue 
39,214 
58,500 
64,000 
9% 
70,000 
9% 
2 Freight Revenue 
1,41,096 
1,65,000 
1,65,000 
0% 1,79,500 
9% 
3 Other Traffic Sources 
10,896 
16,100 
13,693 
-15% 
15,100 
10% 
4 Gross Traffic Receipts (1+2+3) 
1,91,206 
2,39,600 
2,42,693 
1% 2,64,600 
9% 
5 Miscellaneous 
161 
400 
200 
-50% 
400 
100% 
6 Total Internal Revenue (4+5) 
1,91,367 
2,40,000 
2,42,893 
1% 2,65,000 
9% 
7 Budgetary Support from Government 
1,17,276 
1,37,300 
1,59,300 
16% 2,40,200 
51% 
8 Extra Budgetary Resources 
71,066 
1,01,500 
81,700 
-20% 
17,000 
-79% 
9 Total Receipts (6+7+8) 
3,79,709 
4,78,800 
4,83,893 
1% 5,22,200 
8% 
 Expenditure 

 
 
  
10 Ordinary Working Expenses 
1,56,506 
1,70,000 
1,81,000 
6% 1,88,574 
4% 
11 Appropriation to Pension Fund 
48,100 
60,000 
56,000 
-7% 
70,516 
26% 
12 Appropriation to Depreciation Reserve Fund 
0 
2,000 
1,000 
-50% 
1,000 
0% 
13 Total Working Expenditure (10+11+12) 
2,04,606 
2,32,000 
2,38,000 
3% 2,60,090 
9% 
14 Miscellaneous 
1,785 
2,640 
2,500 
-5% 
2,700 
8% 
15 Total Revenue Expenditure (13+14) 
2,06,392 
2,34,640 
2,40,500 
2% 2,62,790 
9% 
16 Total Capital Expenditure 
1,90,267 
2,45,800 
2,45,300 
0% 2,60,200 
6% 
17 Total Expenditure (15+16) 
3,96,659 
4,80,440 
4,85,800 
1% 5,22,990 
8% 
18 Net Revenue (6-15) 
-15,025 
5,360 
2,393 
-55% 
2,210 
-8% 
19 Operating Ratio  
107.39% 
96.98% 
98.22%   
98.45%   

Note: RE: Revised Estimates; BE: Budget Estimates. 

Sources: Expenditure Profile, Union Budget 2023-24; PRS. 

services were disrupted due to COVID-related restrictions, which led to lower revenue than usual. A large part of Railways' costs is committed in nature, which cannot be rationalised in the short term.  Hence, over last three years, Railways had to depend on budgetary support from the government and borrowings to finance its recurring expenses. 

Deterioration in Operating Ratio:  Operating ratio represents the ratio of working expenses (such as fuel and salaries) to traffic earnings.  A higher ratio indicates poorer ability to generate a surplus. As per actuals presented in the budget document, operating ratio was 107.4% in 2021-22.  This implies that in 2021-22, Railways spent Rs 107 to earn Rs 100 from traffic operations.  If accounting adjustments were to be ignored, operating ratio of Railways has been higher than 100% between 2018-19 and 2020-21.  CAG observed that if advances for the next financial year were not accounted as receipts, operating ratio in 2018-19 would have been 101.8%, instead of 97.3%. Similarly, in 2019-20 and 2020-21, operating ratio would have been 114.2% and 131.6%, respectively, if the apportionment for pension fund was as per the requirement.  For administrative purposes, Railway is divided into zones.  As per CAG, nine 

| 2022-23     | 2022-23     |
|-------------|-------------|
| BE          | RE          |
| % Change    |             |
| (2022-23 BE |             |
| to 2022-23  | BE          |
| % Change    |             |
| (2022-23 RE |             |
| to 2023-24  |             |
| RE)         | BE)         |

of these 17 zones have observed an operating ratio of more than 100% in all five years between 2016-
17 and 2020-21 (see Table 12 in annexure).   
Note:  *In 2018-19, certain advances for 2019-20 were included in receipts.  In 2019-20 and 2020-21, less than required amount was apportioned to pension fund. 

Sources: CAG, Union Budget documents of various years; PRS. 

Inability to generate a significant surplus has required Railways to rely on budgetary support from the central government and extra budgetary resources for capacity augmentation and investments.  This has in turn required it to set aside earnings for servicing debt, the liability for which is on a rise.  Inadequate surplus has also led to less than required provisioning for replacement of old assets and safety-related works.  In the following sections, we discuss these challenges and implications in further detail. 

## Modest Growth In Traffic Volume

Railways' primary source of earnings is operation of freight and passenger services.  In 2023-24, 94% of revenue receipts are expected from these operations, with freight's contribution at 68% of revenue receipts.  While freight traffic is estimated to grow at 5% over the revised estimates for 2022- 23, passenger traffic is estimated to grow at 11%. Over the last decade, both rail-based passenger and freight traffic have grown at a modest rate. Between 2013-14 and 2023-24, freight traffic is expected to grow at an annualised rate of 3.5%. Passenger traffic in 2023-24 is expected to remain lower than the levels observed between 2013-14 and 2016-17.  This is mainly due to lower traffic estimated in the second class (ordinary).  Excluding this class, passenger traffic is estimated to grow at an annualised rate of 2% between 2013-14 and 2023-24. 

Sources: Union Budget Documents of various years; PRS. 

In 2017-18, Railways' modal share in freight transport is estimated at 28%, down from 30% in 2011-12.2,3  The reasons for a lower share include: (i) inadequate capacity augmentation leading to unmet demand and sub-optimal speed, (ii) higher tariffs, (iii) negligible diversification in freight basket, and (iv) competition from road which provides better end-to-end connectivity.4   

## Railways' Share In Freight Of Cars Rises

Railways' freight services are used to transport cars from 
factories to the point of distribution.  Railways' share in the 
total domestic freight of cars has seen a significant increase 
in recent years.5   It increased from 1.5% in 2013-14 to 16% 
in 2021-22.5 

Sources: Union Budget Documents of various years; PRS. 

The Draft National Rail Plan envisages increasing the modal share to 45% by 2050.2  For this target, it has proposed an investment plan worth Rs 38 lakh crore for the period between 2021-22 and 2050-51.2 Railways classifies its network into: (i) highdensity network routes (HDN) and (ii) highlyutilised network routes (HUN).2  HDN routes comprise 16% of the total network and carry 41% of the total traffic.2  HUN routes comprise 35% of the total network and carry 40% of the total traffic.2 As per the Draft National Rail Plan, about 80% of HDN routes and 48% of  HUN routes see above 100% capacity utilisation, implying significant network congestion.2  As per the plan, the current average speed for Railway freight is about 25 km per hour.2  This is targeted to be raised to about 50 km per hour with development of dedicated freight corridors and increasing number of lanes in existing network.2 

Capacity Utilisation 
Network Type 
<70% 
70%-
100% 
100%-
150% 
>150% 
High-Density Network (HDN) 
2% 
18% 
58% 
22% 
Highly Utilised Network (HUN) 
24% 
36% 
35% 
13% 
Others 
69% 
22% 
9% 
0% 

Sources: Draft National Rail Plan, Ministry of Railways; PRS.   
Freight concentrated in few bulk goods Most of the freight traffic of railway comes from a few bulk goods such as coal, iron, and cement.  The freight basket has remained largely unchanged over the last 15 years (Table 3).  Coal freight alone constitutes more than 40% of the traffic volume and traffic revenue.  This dependence may present a challenge for Railways in the long-run, as India aims to transition away from coal as the main source of power generation. 

| 2022-23                                                | 2023-24    |
|--------------------------------------------------------|------------|
| Commodity                                              |            |
| 2010-15                                                |            |
| Average                                                |            |
| 2015-20                                                |            |
| Average                                                | RE         |
| Coal                                                   | 43%        |
| Iron and Steel                                         | 13%        |
| Cement                                                 | 9%         |
| Container Service                                      | 7%         |
| Foodgrains                                             | 10%        |
| Fertilizers                                            | 6%         |
| Petroleum, Oil, and                                    |            |
| Lubricant                                              |            |
| 4%                                                     | 4%         |
| Other Goods                                            | 8%         |
| Sources: Union Budget Documents of various years; PRS. |            |

Persistent losses in passenger services Railways is estimated to earn about 26% of its revenue in 2023-24 from passenger services. Passenger traffic is categorised into suburban and non-suburban traffic.  Suburban trains are passenger trains that help move passengers within cities and suburbs.  Majority of the passenger revenue (96% in 2023-24) comes from the nonsuburban traffic (or the long-distance trains). As can be seen in Figure 6, losses in operation of passenger services have been increasing in recent years.  After 2016-17, the profit from freight have not been enough to cover the widening losses from passenger services.  In 2019-20, for earning one rupee from passenger and other coaching services, Railways spent about two rupees and 10 paise. Except AC 3 tier and AC chair car, all other classes of passenger services have observed losses in every year between 2017-18 and 2020-21 (Table 4). 

NITI Aayog (2016) had observed that crosssubsidisation of passenger services by freight services has resulted in higher freight tariffs.6  In 2018, NITI Aayog highlighted higher freight tariffs as one of the reasons for a sub-optimal share of Railways in freight.7  Losses in passenger services are primarily caused due to: (i) passenger fares being lower than the costs, and (ii) concessions to various categories of passengers (senior citizens, National award winners etc.).6  Railways classifies these provisions as social service obligations.6  The Standing Committee on Railways (2020) had recommended that both freight and passenger fares should be rationalised prudently.8  It observed that any fare increase needs to take into account the competition from other transport modes such road and air.8  The Committee recommended that the social service obligations of Railways should be revisited.8  Budget support is provided only for losses on strategic lines.  In 2023-24, this contribution is estimated at Rs 2,216 crore. 

| Class          | 2017-18    | 2018-19    | 2019-20    | 2020-21    |
|----------------|------------|------------|------------|------------|
| AC-1st Class   | -165       | -249       | -403       | -719       |
| AC 2 Tier      | -604       | -908       | -1,378     | -2,995     |
| AC 3 Tier      | 739        |            | 318        |            |
| AC Chair Car   | 98         |            | 243        |            |
| Sleeper Class  | -11,003    | -13,012    | -16,056    | -20,134    |
| Second Class   | -11,524    | -13,214    | -14,457    | -17,641    |
| Ordinary Class | -16,568    | -19,124    | -20,450    | -11,438    |
| EMU Suburban   |            |            |            |            |
| Services       |            |            |            |            |
| -6,184         | -6,754     | -6,938     | -7,799     |            |

Sources: CAG; PRS. 

## Declining Share Of Non-Fare Revenue

Other than revenue from operation of passenger and freight services, Railways' revenue includes: (i) sundry earnings including earning from renting, leasing of buildings, catering services, and advertisements, and (ii) miscellaneous receipts including sale of tender documents, liquidated damages, and receipts by Railway Recruitment Board.  Till 2016-17, dividends from public sector undertakings of Railways used to be part of sundry earnings of Railways.  From 2017-18, it is credited to the general revenue of the central government. In 2023-24, Railways is estimated to have sundry earnings of Rs 8,000 crore, an increase of 13% over the revised estimates for 2022-23.  In 2023-24, sundry earnings are estimated to comprise 3% of revenue receipts, significantly lower than 2017-18 and 2018-19 (4.9% and 3.7% respectively).  CAG (2022) observed that there is a considerable scope for increasing revenue generation from advertisements and commercial utilisation of railway land.9  In September 2022, the Union Cabinet approved revisions to Railways' land policy to encourage long-term leasing for logisticsrelated activities.10   
High salary and pension burden Revenue expenditure of Railways include spending on fuel, maintenance of assets, salaries and pension.  A considerable portion of Railways' 
revenue is spent towards payment of salaries and pension, which are difficult to rationalise in short term.  In 2023-24, Railways is estimated to spend Rs 1,05,235 crore on salaries and Rs 62,000 crore on pension.  These expenses are estimated to increase by 5% and 11% over the previous year, respectively.  Owing to revisions as per the 7th Pay Commission recommendations, spending towards salaries and pension saw a significant increase in 2016-17 (Figure 8).  Since then, spending towards these items as a percentage of revenue receipts has ranged between 63%-75%, except in 2020-21 (COVID year).   
The Committee on Restructuring Railways (2015) had observed that the Railways' expenditure on staff is extremely high and unmanageable.11   As of March 2021, Railways has a total of 15.14 lakh sanctioned posts, out of which around 2.94 lakh posts are lying vacant, i.e., there is a vacancy of about 19%.12  If all of these posts were to be filled, staff costs for Railways would be higher than the current level. As of March 2021, Railways has 15.54 lakh pensioners.13  The number of pensioners is higher than the number of current employees.  The Standing Committee on Railways (2017) had observed that the pension bill may increase further in the next few years, as about 40% of the Railways staff was above the age of 50 years in 2016-17.14 The Standing Committee on Railways (2020) noted that the new pension scheme implemented in 2004 to reduce the pension bill will show results only around 2034-35.8  The Standing Committee (2022) 
recommended that central government should consider providing support for pension expenditure from general revenue till 2034-35.15  

## Infrastructure Projects See Significant Delays And Cost Escalation

Infrastructure development projects by Railways often see delay in completion and cost escalation. This shows inefficiency in project execution, which has a negative impact on budgetary requirements as well as operations.  As of December 2022, out of 173 ongoing projects worth Rs 150 crore or above, 76% have seen cost escalation.16  The cumulative sanctioned costs of these 131 projects was Rs 1.94 lakh crore, which escalated to Rs 4.52 lakh crore (about 2.3 times).16  This also includes the two dedicated freight corridor projects (eastern and western), whose revised cost together is Rs 1.02 lakh crore, an increase of 263% over the sanctioned cost (Rs 28,181 crore).16  
Note: Data corresponds to 173 ongoing projects. Sources: 445th Flash Report on Central Sector Projects, Infrastructure and Project Monitoring Division; MoSPI; PRS.  
One of the key reasons for cost escalation is delay in completion.  Out of 122 ongoing projects for which timeline-related data is available, 96% projects are delayed.16  74% of these projects were delayed by more than 24 months.16  Average delay in these projects is about 64 months.16 
Note: Data corresponds to 122  ongoing projects. Sources: 445th Flash Report on Central Sector Projects, Infrastructure and Project Monitoring Division; MoSPI; PRS. 

## Budget Support And Extra Budgetary Resources Help Sustain Investments

Railways' capital expenditure includes investments for constructing new lines, procuring wagons, doubling of lines, and renewing tracks.  In 2023-24, Railways' capital expenditure is targeted at Rs 2.6 
lakh crore, an increase of 6% over the previous year (Table 5).  The share of capital expenditure in total expenditure of Railways has consistently increased in recent years, despite low revenue surplus (Figure 11).  This increase has been funded through budgetary support from the central government and extra budgetary resources.  

% Change 
(22-23 RE to 
2021-22 
Actuals 
2022-23 
Revised 
2023-24 
Budget 
23-24 BE) 
1,17,276 1,59,300 2,40,200 
51% 
Gross Budgetary Support 
71,066 
81,700 
17,000 
-79% 
Extra Budgetary Resources Internal Resources 
1,925 
4,300 
3,000 
-30% 
Total 
1,90,267 2,45,300 2,60,200 
6% 
Sources: Expenditure Profile, Union Budget 2023-24; PRS. 

Sources: CAG, Union Budget Documents of various years; PRS. 

Extra budgetary resources include: (i) borrowings through Indian Railway Finance Corporation (IRFC), and (ii) borrowings from banks, institutional finance, and external investments. Investments are in the form of public-private partnership, joint ventures, and purchase of equity and bonds by private sector.   Extra budgetary resources funded more than 50% of capital expenditure between 2017-18 and 2020-21.  This reliance has increased debt servicing obligation of Railways (discussed in the next section in detail).   
Sources: CAG, Union Budget Documents of various years; PRS. 

From 2021-22 onwards, the budgetary support has been increased significantly.  This has been made possible with the central government incurring a much higher fiscal deficit than the usual (above 6% 
of GDP).17  In 2023-24, 92% of capital expenditure will be financed through budgetary support (Rs 2,40,200 crore), up from 65% in 2022-23 (Rs 1,59,300 crore).  Correspondingly, extra budgetary resources have been scaled back.  Funds from extra budgetary resources are estimated at Rs 17,000 crore in 2023-24, a decrease of 79% from the previous year. 

## Rise In Liability For Lease Charges

Extra budgetary resources include funds raised through IRFC.  IRFC borrows from market and follows a leasing model to finance the rolling stock assets.  Since 2015-16, IRFC has also been utilised for project financing.9  Lease charges have both interest and principal components.  Increasing lease charges payment obligation is crowding out the space for productive expenditure. Between 2015-16 and 2023-24, the interest payment obligation is expected to increase at an annualised rate of 15% and principal repayment obligation at 17%.  During the same period, revenue receipts are expected to grow at a much lower rate, i.e., 6%.  In 2023-24, Railways is estimated to spend Rs 23,782 crore towards the interest component, and Rs 22,229 crore towards the principal component.  Together, these payments are estimated to be 17% of revenue receipts, a sharp rise from 9% of revenue receipts in 2015-16. 

% Change 
(22-23 RE to 
Table 6: Payment of lease charges (Rs crore) 
  
2021-22 
Actuals 
2022-23 
Revised 
2023-24 
Budget 
23-24 BE) 
Capital Component 
14,581 
18,898 
22,229 
18% 
Interest Component 
13,896 
19,855 
23,782 
20% 
Total 
28,477 
38,753 
46,011 
19% 

Sources: Expenditure Profile, Union Budget 2023-24; PRS. 

Shortage of funds for essential provisions Railways operates various funds to earmark surplus resources for certain purposes.  For instance, Depreciation Reserve Fund is for replacement and renewal of assets and Capital Fund is to finance capital works and repayment of principal component of lease charges.  Diminishing revenue surplus has meant that these funds do not get adequate provisions (Table 11 in annexure).  These purposes are then met either from general revenue of the central government or extra budgetary resources.  This has also led to postponement of critical works. 

## Huge Backlog In Replacement Of Old Assets

At the end of 2020-21, value of old assets pending to be replaced from Depreciation Reserve Fund is Rs 94,873 crore.9  This includes: (i) Rs 58,459 crore on track renewals and (ii) Rs 26,493 crore on rolling stock.9  CAG (2022) observed that given the backlog and depleting surplus, the replacement and renewal of assets could become a burden for the central government.9 

## Servicing Of Lease Charges From General Revenue

Due to inadequate funds in the capital fund, the principal component of lease charges is being paid from budgetary support.  CAG (2022) observed that ideally, this expenditure should be met from Railways' internal resources.9  CAG (2019) had observed that if obligations towards IRFC have to be met from budgetary support, the government might as well borrow directly from the market, as the cost of borrowings would be lower.18  In 2023- 24, no extra budgetary resources have been estimated to be raised through IRFC. 

## Inability In Meeting Committed Funds For Safetyrelated Works

Rashtriya Rail Sanraksha Kosh was set up for five years from 2017-18 for financing critical safety related works.8  The fund was to have a corpus of one lakh crore rupees.8  Railways was to apportion Rs 5,000 crore in each of these five years, however, it did not meet this obligation in any year

## 

1 "Evolution - About Indian Railways", Website of Ministry of Railways, last accessed on February 10, 2023, http://www.indianrailways.gov.in/railwayboard/view_section.js p?lang=0&id=0,1,261.   
2 The Draft National Rail Plan, Ministry of Railways, December 
2020, http://indianrailways.gov.in/NRP- %20Draft%20Final%20Report%20with%20annexures.pdf. 3 "India Transport Report: Moving India to 2032: Volume II, National Transport Development Policy Committee, June 2014, http://logistics.gov.in/media/42bjzvcx/india-transport-reportmoving-india-to-2032-national-transport-development-policycommittee.pdf. 4 "Reform, Perform, and Transform", Indian Railways, July 2017, https://indianrailways.gov.in/Reform-Perform- Transform%202022_v10%20(2).pdf. 5 "Indian Railways registers growth in automobile traffic", Press Information Bureau, Ministry of Railways, September 12, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1858765 . 6 "Reviewing the Impact of "Social Service Obligations" by Indian Railways", NITI Aayog, http://niti.gov.in/writereaddata/files/document_publication/Socia l-Costs.pdf. 7 "Strategy for New India @75", NITI Aayog, November 2018, https://www.niti.gov.in/sites/default/files/2019- 01/Strategy_for_New_India_2.pdf. 8 "3rd Report: Demand for Grants (2020-21) - Ministry of Railways", Standing Committee on Railways, March 2020, https://loksabhadocs.nic.in/lsscommittee/Railways/17_Railways _3.pdf. 9 "Railways Finances", Report No. 23 of 2022, CAG, December 21, 2022, https://cag.gov.in/webroot/uploads/download_audit_report/2022 /Report-No.-23-of-2022_Railway_English_DSC- 063a2e6ca00eb78.95210994.pdf. 10 "Cabinet approves policy on long term leasing of Railways Land for implementing PM Gati Shakti framework (Cargo related activities, Public utilities & Railway's exclusive use)", 
 
 
Press Information Bureau, Ministry of Railways, September 7, 2022, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1857411. 11 Report of the Committee for Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board, Ministry of Railways, June 2015, http://www.indianrailways.gov.in/railwayboard/uploads/director ate/HLSRC/FINAL_FILE_Final.pdf. 12 Annual Report on Pay and Allowances of Central Government Civilian Employees 2020-21, Department of Expenditure, Ministry of Finance, https://doe.gov.in/sites/default/files/Annual%20Report%202020 -21.pdf. 13 Pensioner Portal, Ministry of Personnel, Public Grievances, & Pensions, as accessed on February 10, 2023, https://pensionersportal.gov.in/dashboard/CGP/RPT_CGP.aspx. 14 "13th Report: Demands for Grants (2017-18) - Ministry of Railways", Standing Committee on Railways, March 10, 2017, https://loksabhadocs.nic.in/lsscommittee/Railways/16_Railways _13.pdf. 15 "11th Report: Demand for Grants (2022-23) - Ministry of Railways", Standing Committee on Railways, March 2022, https://loksabhadocs.nic.in/lsscommittee/Railways/17_Railways _11.pdf. 16 445th Flash Report on Central Sector Projects, Infrastructure and Project Monitoring Division, Ministry of Statistics and Programme Implementation, http://www.cspm.gov.in/english/flr/FR_Dec_2022.pdf. 17 Budget at a Glance, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/Budget_at_Glance/budget_ at_a_glance.pdf. 18 "Railways Finances", Report No 10 of 2019, CAG, December 2, 2019, https://cag.gov.in/uploads/download_audit_report/2019/Report_ No_10_of_2019_Union_Government_(Railways)_Railways_Fi nances.pdf.  
 

## Annexure: Railways

% change  
(2022-23 RE  
2021-22 
2022-23 
Revised 
2023-24 
Budget 
% share in  
2023-24 BE 
Commodity 
to 2023-24 BE) 
Earning Volume Earning Volume Earning Volume Earning Volume Earning Volume 
Coal 
65,856 3,27,754 
82,752 3,88,536 
89,875 4,08,474 
9% 
5% 
50% 
43% 
Other Goods 
10,018 
78,877 
11,996 
88,565 
13,227 
94,530 
10% 
7% 
7% 
10% 
Cement 
10,605 
81,476 
12,397 
80,080 
14,073 
88,000 
14% 
10% 
8% 
9% 
Containers service 
6,275 
66,622 
7,263 
63,520 
8,514 
71,918 
17% 
13% 
5% 
8% 
Food grains 
10,661 
97,076 
10,592 
79,850 
8,479 
61,880 
-20% 
-23% 
5% 
7% 
Iron ore 
13,093 
66,123 
11,923 
53,851 
14,101 
61,717 
18% 
15% 
8% 
7% 
Pig iron and Finished steel 
9,125 
60,238 
9,911 
52,756 
11,865 
61,140 
20% 
16% 
7% 
6% 
Fertilizers 
5,428 
44,530 
6,447 
44,787 
6,755 
45,430 
5% 
1% 
4% 
5% 
Petroleum, Oil, and Lubricant 
5,822 
31,359 
6,337 
31,131 
6,739 
32,050 
6% 
3% 
4% 
3% 
Raw materials for steel plants 
2,406 
17,761 
2,632 
15,431 
2,902 
16,470 
10% 
7% 
2% 
2% 
Miscelleneous revenue 
1,809 
- 
2,750 
- 
2,967 
- 
8% 
- 
2% 
- 
Total 
1,41,096 8,71,816 1,65,000 8,98,507 1,79,500 9,41,609 
9% 
5% 
100% 
100% 

Note: NTKM - Net Tonne Kilometre (One NTKM is when one tonne of goods is carried for a kilometre). RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Profile; Union Budget 2023-24; PRS. 

% change  
(2022-23 RE  
2023-24 
Budget 
% share in  
2023-24 BE 
 
2021-22 
2022-23 
Revised 
to 2023-24 BE) 
Earning Volume Earning 
Volume 
Earning 
Volume 
Earning Volume Earning Volume 
Suburban 
1,370 
69,798 
2,265 
1,13,425 
2,619 
1,31,893 
16% 
16% 
4% 
12% 
Non-Suburban 
37,844 **5,20,418** 
61,735 
8,89,083 
67,381 
9,80,440 
9% 
10% 
96% 
88% 
Second Class (M E) 
7,170 1,58,819 
17,174 
3,80,434 
19,027 
4,24,847 
11% 
12% 
27% 
38% 
Sleeper Class (M E) 
12,849 2,25,637 
15,753 
2,76,630 
17,028 
3,01,415 
8% 
9% 
24% 
27% 
AC 3 Tier 
12,225 
90,488 
19,310 
1,42,725 
21,156 
1,57,619 
10% 
10% 
30% 
14% 
Second Class (Ordinary) 
400 
18,355 
983 
45,129 
1,058 
48,970 
8% 
9% 
2% 
4% 
AC 2 Tier 
3,385 
18,536 
5,446 
29,779 
5,855 
32,272 
8% 
8% 
8% 
3% 
AC Chair Car 
1,163 
6,602 
1,912 
10,834 
1,999 
11,421 
5% 
5% 
3% 
1% 
AC First Class 
496 
1,537 
880 
2,726 
962 
3,006 
9% 
10% 
1% 
0% 
Executive Class 
140 
368 
241 
634 
257 
680 
6% 
7% 
0% 
0% 
Sleeper Class (Ordinary) 
3 
39 
6 
90 
6 
97 
7% 
8% 
0% 
0% 
First Class (Ordinary) 
4 
27 
11 
84 
12 
95 
12% 
13% 
0% 
0% 
First Class (M E) 
11 
10 
20 
18 
19 
18 
-1% 
0% 
0% 
0% 
Total 
39,214 **5,90,216** 
64,000 **10,02,508** 
70,000 **11,12,333** 
9% 
11% 
100% 
100% 

Note: PKM - Passenger Kilometre (One PKM is when a passenger is carried for a kilometre). RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Profile; Union Budget 2023-24; PRS. 

## Table 9: Details Of Capital Expenditure (Rs Crore)

| 2022-23                                       | 2022-23    | 2023-24    |
|-----------------------------------------------|------------|------------|
| % change from                                 |            |            |
| 22-23 RE to 23-                               | Head       |            |
| 2021-22                                       |            |            |
| Actuals                                       | BE         | RE         |
| 24 BE                                         |            |            |
| New Lines (Construction)                      | 21,245     | 26,324     |
| Gauge Conversion                              | 2,837      | 3,475      |
| Doubling                                      | 32,219     | 37,150     |
| Traffic Facilities-Yard Remodeling and Others | 2,675      | 3,045      |
| Rolling Stock                                 | 41,406     | 38,887     |
| Leased Assets-Payment of Capital Component    | 14,581     | 22,188     |
| Road Safety Works-Road Over/Under Bridges     | 4,222      | 6,500      |
| Track Renewals                                | 14,082     | 12,077     |
| Electrification Projects                      | 6,961      | 7,695      |
| Other Electrical Works incl. TRD              | 627        | 650        |
| Workshops Including Production Units          | 2,668      | 2,045      |
| Staff Welfare                                 | 473        | 495        |
| Customer Amenities                            | 1,995      | 2,700      |
| Investment in Govt. Commercial Undertaking -  |            |            |
| Public Undertaking/JVs/SPVs                   |            |            |
| 25,751                                        | 38,687     | 28,981     |
| Metropolitan Transport Projects               | 2,515      | 1,998      |
| Others                                        | 5,621      | 6,884      |
| EBR- Partnership                              | 10,388     |            |
|                                               |            |            |
| 14,700                                        |            |            |
|                                               |            |            |
| 17,000                                        |            |            |
|                                               |            |            |
| 16%                                           |            |            |
|                                               |            |            |
| Total                                         | 1,90,267   | 2,45,800   |

RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Profile; Union Budget 2023-24; PRS. 

Head 
Achieve
% 
2021-22 
2022-23 
2023-24 
% change 
from 22-
23 RE to 
23-24 BE 
Revised  
Target 
ment 
In % 
Budget 
Target 
Revised 
Target 
change 
Budget 
Target 
Construction of New Lines (Route Kms) 
300 
289 
96% 
300 
200 
-33% 
600 
200% 
Gauge conversion (Route Kms) 
500 
636 
127% 
500 
100 
-80% 
150 
50% 
Doubling of Lines (Route Kms) 
1,600 
1,984 
124% 
1,700 
2,200 
29% 
2,800 
27% 
Rolling Stock 


(i) Diesel Locomotives 
0 
100 
- 
100 
100 
0% 
100 
0% 
(ii) Electric Locomotives 
1,091 
1,110 
102% 
1,290 
1,290 
0% 
1,290 
0% 
Coaches 
8,115 
7,151 
88% 
7,551 
7,520 
0% 
6,978 
-7% 
Wagons (vehicle units) 
9,600 
8,386 
87% 
13,000 
21,000 
62% 
26,000 
24% 
Track renewals (Track Kms) 
3,600 
4,275 
119% 
3,700 
4,200 
14% 
4,800 
14% 
Electrification Projects (Route Kms) 
6,000 
6,366 
106% 
6,500 
6,500 
0% 
6,500 
0% 

Sources: Expenditure Profile; Union Budget 2023-24; PRS. 


Development 
Year 
Capital Fund 
Debt Service 
Fund 
Depreciation 
Reserve Fund 
Fund 
Rashtriya Rail 
Sanraksha Kosh 
2013-14 
500 
165 
7,900 
3,075 
- 
2014-15 
6,233 
57 
7,775 
1,375 
- 
2015-16 
5,798 
3,488 
5,600 
1,220 
- 
2016-17 
2,398 
0 
5,200 
2,515 
- 
2017-18 
0 
0 
1,540 
1,506 
0 
2018-19 
0 
0 
300 
750 
3,024 
2019-20 
0 
0 
400 
1,389 
201 
2020-21 
0 
0 
200 
1,547 
1,000 
2021-22 
0 
0 
0 
0 
0 
2022-23 RE 
1,300 
0 
1,000 
1,093 
0 
2023-24 BE 
0 
0 
1,000 
1,210 
1,000 

RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Profile; Union Budget 2023-24; PRS. 

| Zone               |   2016-17  |   2017-18  |   2018-19  |   2019-20  |   2020-21  |
|--------------------|------------|------------|------------|------------|------------|
| Central            |      105   |      111   |      105   |      105   |      126   |
| East Central       |      102   |       98   |       98   |      102   |       89   |
| East Coast         |       54   |       52   |       52   |       51   |       47   |
| Eastern            |      165   |      181   |      186   |      170   |      175   |
| Metro Rail/Kolkata |      260   |      278   |      248   |      216   |      678   |
| North Central      |       71   |       67   |       68   |       74   |       79   |
| North Eastern      |      197   |      202   |      205   |      188   |      203   |
| North Western      |       95   |      108   |      106   |      113   |      107   |
| Northeast Frontier |      130   |      169   |      161   |      152   |      139   |
| Northern           |      119   |      117   |      132   |      155   |      154   |
| South Central      |       86   |       83   |       80   |       88   |      101   |
| South East Central |       56   |       56   |       56   |       54   |       46   |
| South Eastern      |       73   |       76   |       73   |       65   |       57   |
| South Western      |      120   |      129   |      133   |      124   |      138   |
| Southern           |      148   |      161   |      153   |      146   |      219   |
| West Central       |       74   |       75   |       68   |       71   |       68   |
| Western            |      103   |      108   |      102   |      115   |      128   |
| Overall            |       96.5 |       98.4 |       97.3 |       98.4 |       97.5 |

Note: Figures have been rounded off. Sources: CAG; PRS. 

## Demand For Grants 2023-24 Analysis Food And Public Distribution

The Ministry of Consumer Affairs, Food and Public Distribution has two Departments: (i) Food and Public Distribution, and (ii) Consumer Affairs. Allocation to the Ministry accounts for 5% of the budget of the central government in 2023-24.1 
The **Department of Consumer Affairs** is responsible for spreading awareness among consumers about their rights, protecting their interests, implementing standards, and preventing black marketing.2  In 2023-24, the Department has been allocated Rs 251 crore, a 14% increase over the revised estimate of 2022-23.3  However, the allocation to the Department has declined by 87% in 2022-23 at the revised estimate stage as compared to the budget estimate stage. 

The **Department of Food and Public Distribution** 
is responsible for ensuring food security through procurement, storage, and distribution of food grains, and for regulating the sugar sector.4  In 2023- 24, the Department has been allocated Rs 2,05,514 crore (almost the entire allocation of the Ministry).5 This is a decrease of 31% as compared to the revised estimate of 2022-23. 

% change 
2023-24 BE 
over  
Department 
2021-22 
Actuals 
2022-23 
Revised 
2023-24 
Budgeted 
2022-23 RE  
Food & Public Distribution 
3,04,361 2,96,304 
2,05,514 
-31% 
Consumer Affairs 
2,211 
220 
251 
14% 
Total 
3,06,571 2,96,523 
2,05,765 
-31% 

This note examines the allocation to the Department of Food and Public Distribution.  It also discusses the broad issues in the sector and key observations and recommendations made in this regard. 

## Overview Of Finances

Food subsidy is the largest expenditure by the Department of Food and Public Distribution.  96% of the Department's allocation in 2023-24 is towards food subsidy (see Table 7 in the Annexure for more details).  The subsidy is provided to the Food Corporation of India (FCI) and states for procuring food grains from farmers at government notified prices and selling them at lower subsidised prices (known as Central Issue Prices), under the National Food Security Act (NFSA), 2013.  The Act mandates coverage of up to 75% of the population in rural areas and 50% in urban areas.6,7  Beneficiary households under the Act are divided into Antyodaya Anna Yojana (AAY, i.e., the poorest of poor families) and priority households.  AAY households are eligible to receive 35 kg of foodgrains per month and priority households are eligible to receive 5 kg of foodgrains per person per month at subsidised prices. The subsidy also covers the storage cost incurred by FCI in maintaining buffer stocks in order to ensure food security in the country.  Figure 1 shows the expenditure on food subsidy during 2013-14 to 2023-24 as a percentage of GDP.  The spending on food subsidy as a percentage of GDP decreased between 2013-14 (0.8%) and 2019-20 (0.5%). However, this downward trend was driven by releasing less subsidy than what was originally claimed by the FCI.8     
Note: RE is revised estimate; BE is budget estimate. Sources: Union Budget Documents; MoSPI; PRS. 

The amount of unpaid subsidy to the FCI had steadily increased over the last few years.  While the central government released less than claimed subsidy, it provided loans to the FCI through the National Small Savings Fund (NSSF).  In the budget for 2021-22, the central government made provisions to repay the loans taken from NSSF and clear the past dues of the FCI.  As a result, the expenditure on food subsidy increased sharply in 2020-21 to 2.7% of GDP.  Between 2020-21 and 2022-23, food subsidy also included expenditure on account of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).  Under the scheme, 5 kg additional foodgrains were allocated per person per month free of cost to eligible beneficiaries at an expense of Rs 3.9 lakh crore.9  In December 2022, the Union Cabinet decided to provide foodgrains under NFSA free of cost to the eligible beneficiaries.  This would be applicable for a oneyear period from January 1, 2023.10   

Foodgrains 
Expenditure (Rs 
Phases 
crore) 
allocated (lakh 
metric tonnes) 
Apr 20–Jun 20 
120 
44,834 
Jul 20-Nov 20  
201 
68,351 
May 21-Jun 21 
80 
26,602 
Jul 21-Nov 21 
199 
67,266 
Dec 21-Mar 22 
159 
53,344 
Apr 22-Sep 22 
239 
85,838 
Oct 22-Dec 22 
120 
44,763 
Total  
1,118 
3,90,998 

Sources: Unstarred Question No. 1994, Rajya Sabha; PRS. 

## Components Of Food **Subsidy**

Expenditure on food subsidy can be classified under the following three heads (break-up in Table 3): 

- 
Subsidy to FCI: The Food Corporation of 
India (FCI) receives subsidy for procuring food 
grains from farmers at government notified prices and selling them at lower subsidised prices.  It also receives subsidy for the storage cost incurred in maintaining buffer stocks. 
- 
Subsidy to states: Under the decentralised 
procurement scheme, states may choose to undertake the operations of procurement, storage, and distribution on behalf of FCI.  In such cases, states are provided with subsidy.   
- 
Sugar subsidy: Under this, one kg of sugar per 
family per month is provided at subsidised rates to families covered under the Antyodaya Anna Yojana.  This is less than 0.2% of the total subsidy bill. 
In addition, Rs 7,425 crore has been allocated as assistance to states for intra-state movement of foodgrains and margins of fair price shop dealers. In the budget for 2023-24, the subsidy allocated to the FCI and states is expected to be 36% and 17% lower as compared to the revised estimate of 2022- 23, respectively. 

Subsidy 
2021-22  
Actuals 
2022-23  
Revised 
2023-24 
Budgeted 
% change in 
2023-24 BE 
over 2022-
23 RE 
Subsidy to FCI 
2,08,929 2,14,696 
1,37,207 
-36% 
79,790 
72,283 
59,793 
-17% 
Subsidy to states (decentralised procurement) Sugar subsidy 
250 
216 
350 
62% 
Total 
2,88,969 2,87,194 
1,97,350 
-31% 
Sources: Expenditure Budget, Union Budget 2023-24; PRS. 

## Issues In The Sector Coverage Under Nfsa

The NFSA provides that subsidised foodgrains be provided to up to 75% of the rural population and up to 50% of the urban population (as per the census).6 On an average, it covers 67% of the total population of the country.  As per the 2011 census, the number of eligible beneficiaries covered under NFSA is around 80 crore.  Who should receive food subsidy has been a key question.  On one hand there have been suggestions to identify beneficiaries as per the latest population figures to increase coverage.  On the other hand, experts have suggested to reduce the coverage under NFSA while increasing the entitlements for priority households. The next decadal census was to be conducted in 2021.  However, due to the COVID-19 pandemic, it has been postponed until further orders.11  In the backdrop of this delay and the increase in population during the intervening period, the number of people getting food subsidy under NFSA may be less than 67% of the population.  According to the population estimates prepared by the National Commission on Population, India's population as on March 1, 2021 is expected to be 136 crore as compared to 121 crore in 2011.12  Going by this estimate, the number of people who are eligible to be covered under NFSA would be around 91 crore which is more than the current number of beneficiaries receiving subsidised foodgrains. In July 2022, the Supreme Court observed that the central government should come with a formula or policy such that the benefits under NFSA are not restricted as per the 2011 census.13  The Court noted that the 'Right to Food' is a fundamental right under Article 21 of the Constitution.  It recommended that the central government may use projections of population increase during 2011-2021 to ensure more needy people are covered under NFSA.13 Note that certain states run an expanded version of the PDS.  According to the central government, more than six crore state ration cards exist which cover another 25 crore people over and above the NFSA mandate.14  
Various experts have noted that the coverage of NFSA is high, but the allocation to priority households is low.  In 2011-12, the per capita consumption of cereals in rural areas was 11.2 kg and in urban areas was 9.3 kg.15  Compared to this, under NFSA, priority households are entitled to receive 5 kg of foodgrains (primarily rice and wheat) per person per month.  In the last two years, some of the consumption gap was being met through the additional allocation of foodgrains under PMGKAY, which was discontinued in December 2022. The High Level Committee on Restructuring of Food Corporation of India (2015) had recommended that the central government should rethink the coverage of population under NFSA.16  It noted that allocating 5 kg foodgrains per person to priority households made them worse off compared to the earlier framework of targeted PDS under which they were entitled to 7 kg of foodgrains per person.16  It had recommended reducing the overall coverage for NFSA to around 40% of the population.  This would cover all families below the poverty line and some families above that.  At the same time, it recommended increasing the allocation of foodgrains to priority households to 7 kg per person. 

## Free Provision Of Foodgrains Under Nfsa Is Against Long-Standing Recommendation Of Revision Of Cip

Under the National Food Security Act, 2013, food grains are allocated to the beneficiaries at the Central Issue Price (CIP).  These prices have not changed since July 1, 2002.17  The Standing Committee on Food, Consumer Affairs and Public Distribution (2017) noted that the food subsidy bill has increased due to increase in MSP of wheat and rice with respect to the CIP, increased off take of food grains under targeted PDS, and implementation of NFSA in all states/UTs.18  The Economic Survey 2020-21 noted that the central government's food subsidy bill is becoming unmanageably large.19  

| Food grain    |   NFSA  |   BPL  |   APL  |
|---------------|---------|--------|--------|
| Rice          |       3 |   5.65 |   7.95 |
| Wheat         |       2 |   4.15 |   6.1  |

Note: BPL - Below Poverty Line, APL - Above Poverty Line. Sources: FCI; PRS. 

Food subsidy has three elements: (i) consumer subsidy, (ii) cost of maintaining buffer stock, and (iii) subsidy on coarse grains, regularisation of FCI's operational losses and other non-plan allocation to states.20  Consumer subsidy is the difference between the economic cost and CIP. Economic cost includes cost of procurement, acquisition, and distribution.  In 2002-03, from when the CIP has been effective, the economic cost of rice was Rs 11.7 per kg and for wheat it was Rs 8.8 per kg.20  In 2023-24, the economic cost of rice is estimated to be Rs 39.2 per kg while that for wheat is estimated at Rs 27 per kg.20  The NFSA 
provides that the CIP may be periodically revised by the central government in a manner such that it does not exceed the minimum support price for rice, wheat, and coarse grains.6   
In 2023, the central government will provide free foodgrains to all eligible beneficiaries under the NFSA.10  This distribution of foodgrains has now been renamed as PMGKAY (after the scheme which ran from April 2020 to December 2022).21  The free distribution of foodgrains under NFSA is against the recommendations given in the past with respect to the revision of the CIP.  
budget estimates. Sources: FCI; PRS. 

Subsidy

Note: Figures for 2022-23 are revised estimates and 2023-24 are budget estimates. 

Sources: FCI; PRS. 

The Economic Survey 2020-21 noted that while it is difficult to reduce the economic cost of food management, there is a need to consider revising CIP to reduce food subsidy bill.  The 15th Finance Commission observed that the increase in economic cost of food grains will need to be partially offset by increasing CIP of subsidised foodgrains.22  Increase in expenditure on food subsidy may hinder investments in the agriculture and food sector.16 One recommendation has been to provide foodgrains at the prevailing subsidised rates only to the AAY households.16  However, the prices for priority households must be linked to MSP.  The rise in economic costs is driven by periodic increases in MSP (Figure 5). 

## Distribution Of Commodities Under Nfsa May Not Cater To Nutritional Requirements Of The Beneficiaries

According to the National Family Health Survey - 5, 50% of the women and 48% of the men surveyed between the ages of 15-49 reported consuming pulses or beans daily.23  Around 49% of the respondents reported consuming milk or curd daily.23  One of the reforms prescribed under NFSA includes diversifying the commodities distributed under PDS over a period of time.6  However, foodgrains distributed under PDS primarily include only cereals (rice, wheat, and coarse grains).  This has not changed since the Act was implemented in 2013 despite certain structural changes in consumption patterns of people. Between 1993-94 and 2011-12, the amount of protein intake by consuming cereals decreased in both rural areas and urban areas.24  There was an increase in the share of proteins consumed through items such as pulses, milk, and egg, fish and meat.24   
 
Sources: Nutritional Intake in India 2011-12, NSSO; 15th Finance Commission; PRS. 

Sources: Nutritional Intake in India 2011-12, NSSO; 15th Finance Commission; PRS. 

Moreover, while cereals or foodgrains contain only 10% protein, their share as a percentage of total protein intake in rural and urban areas was more than 50% in 2011-12.24  Other sources of consumption such as pulses, milk, fish, and meat contain more than 20% protein but account for only 15% of total protein intake in India.24 
Pulses under PMGKAY: Pulses can be a better source of protein as compared to cereals and can help improve nutrition intake for NFSA beneficiaries.  Under the first phase of the PMGKAY between April to June 2020, the central government distributed one kg of pulses per household per month free of cost for NFSA beneficiaries.25  Between July to November 2020, one kg of chana was provided free of cost per family per month to beneficiaries covered under the NFSA. However, the allocation of pulses was not continued after that under PMGKAY. Between 2011-12 and 2021-22, the domestic production of pulses has increased at an annual rate of 5% as compared to the increase of 2% in the total production of foodgrains.26  However, India continues to be import dependent for meeting its domestic needs for consumption of pulses.  India's import dependency for pulses in 2020-21 was 9% which is estimated to decline to 3.6% by 2030-31.27 This is in contrast to wheat and rice where the domestic production is more than sufficient to meet the domestic consumption demand.  As long as India continues to be import dependent for meeting its consumption needs for pulses, it may be challenging to include them as one of the commodities given under NFSA.    

## Delivery Of Food Subsidy

Leakages in PDS:  Leakages refer to food grains not reaching the intended beneficiaries.  Note that recent data on leakages is not publicly available. The latest available data is for 2011.  According to the 2011 data, leakages in PDS were estimated to be 46.7%.16,28  Leakages may be of three types: (i) pilferage or damage during transportation of food grains, (ii) diversion to non-beneficiaries at fair price shops through issue of ghost cards, and (iii) 
exclusion of people entitled to food grains but who are not on the beneficiary list.29,30 Exclusion errors occur when entitled beneficiaries do not get food grains.  It refers to the percentage of poor households that are entitled to but do not have PDS cards.  Exclusion errors had declined from 55% 
in 2004-05 to 41% in 2011-12.31  Inclusion errors occur when those who are ineligible get undue benefits.  Inclusion errors had increased from 29% in 2004-05 to 37% in 2011-12.31 Considering the significant leakages under the PDS, the High-Level Committee (2015) had recommended the incorporation of Aadhaar and biometric authentication.16  In February 2017, the Ministry made it mandatory for beneficiaries under the National Food Security Act, 2013 to use Aadhaar as proof of identification for receiving food grains.32  However, non-linking of Aadhaar with ration cards is not a ground for cancellation of ration cards.33  The deadline for applying for Aadhaar enrolment in order to avail subsidised food grains or cash transfer of food subsidy has been extended several times and currently stands at March 31, 2023.34  According to the central government, due to measures such as digitisation of ration cards, deduplication, and identification of fake/ineligible ration cards, states/UTs have cancelled about 4.28 crore bogus cards between 2014 to 2021.33  As on February 4, 2022, 93.5% of the ration cards have been seeded with Aadhaar (of at least one member of the household).35 Note that beneficiaries may face issues with Aadhaar authentication while availing PDS benefits. According to the data submitted by UIDAI to the Supreme Court, the Aadhaar authentication failure rate (across all purposes) was 8.5% for iris scans and 6% for fingerprints.36  In its judgement, the Court held that services cannot be denied to beneficiaries due to Aadhaar authentication failure.36 
is pending  

% FPS 
State/UT 
Total FPS 
Operational 
ePoS 
Automation 
464 
445 
96% 
Andaman and Nicobar Islands Assam 
33,987 
19,078 
56% 
Chhattisgarh 
12,304 
12,004 
98% 

Sources: 18th Report, Standing Committee on Consumer Affairs, Food and Public Distribution, 2022; PRS. 

Automation of fair price shops (FPS) by installing electronic point of sale devices (ePoS) has been another reform which has been suggested to address leakages in PDS.  This helps in transparent distribution of food grains after unique identification of beneficiaries.37  In addition to this, ePoS devices also upload the electronic records of sale transactions to centralised servers in states/UTs.37  
As on February 2, 2022, 97% of all FPSs have operationalised ePoS.35 In May 2022, the Department of Food and Public Distribution revised the central assistance paid to states/UTs for meeting, among other expenses, the margins paid to FPS dealers.38  Under the revised norms, the margin of FPS dealers have been increased from 70 paise per kg to 90 paise per kg in general category states and from Rs 1.43 per kg to Rs 1.8 per kg in north-eastern, Himalayan, and island states.38 However, certain ground surveys have indicated that Aadhaar based authentication and automation of FPSs have led to problems of exclusion.  For instance, a study in rural Jharkhand (2017) found that certain households were unable to pass the biometric authentication test and were hence unable to timely access their food entitlements.39  Certain households with elderly couples reported issues with fingerprint recognition.  The survey also found that quantity fraud (providing less than entitled foodgrains to beneficiaries) persisted even after the implementation of PoS devices.39   
Direct Benefit Transfer (DBT): The NFSA 
provides that one of the reforms in targeted PDS is the introduction of schemes such as cash transfer and food coupons.6  The High-Level Committee on FCI (2015) had observed that a majority of the rural population covered under NFSA are farmers or people working on farms.16  This implies that the government often procures, stores, and distributes grains to the same persons that they are buying grains from at MSP.16  The Committee recommended that it would be better to provide cash subsidy to such farmers and farm workers.  This was seen to reduce the subsidy expenses of the central government while at the same time improve the effective subsidy support received by the beneficiaries.16  The Committee estimated that this would save around Rs 30,000-35,000 crore for the central government.  It recommended giving cash transfers indexed to inflation.16 In September 2015, the central government started pilot projects for providing food subsidy through cash transfers.  This is being implemented in Chandigarh, Puducherry and urban areas of Dadra and Nagar Haveli.40  According to the central government these pilot projects aim to: (i) reduce the need for physical movement of foodgrains, (ii) provide greater autonomy to beneficiaries to choose their consumption basket, and (iii) reduce leakages and improve targetting.40  However, even after seven years of starting the pilot projects, the uptake of DBT across states has been limited.  The government of Puducherry had sought an exemption from the DBT scheme under NFSA.41  However, its request was turned down by the Centre.41  A DBT pilot project started in the Nagri block of Jharkhand was discontinued in 2018, 10 months after it was launched.42  According to news reports, a social audit of the scheme had revealed that some beneficiaries took more than four days in accessing the ration after receiving the money.42  Moreover, some beneficiaries also had to borrow money in order to be able to buy rations.42 
One Nation One Ration Card (ONORC): In order to facilitate nationwide portability of NFSA entitlements, the central government has implemented the ONORC.  Under the scheme, NFSA beneficiaries have the choice to lift their entitled foodgrain from any FPS across the country with their existing ration card.43  It is being implemented in all states/UTs.  Between August 2019 and November 2022, more than 93 crore portability transactions were carried out under ONORC.  However, only 0.6% of these accounted for inter-state transactions while the remaining were intra-state transactions.43  Bihar accounts for 31% of the total portability transactions, followed by Andhra Pradesh at 12% and Rajasthan at 11%.43   

## Procurement Of Foodgrains

There are two broad procurement systems: (i) centralised and (ii) decentralised.44  Under the centralised procurement system, foodgrains are procured either directly by the FCI or by state government agencies (at MSP).  Foodgrains procured by state agencies are handed over to FCI for storage, distribution, or transportation.  Under decentralised procurement, state government/agencies procure, store, and distribute rice/wheat/coarse grains within the state.  The excess stocks of rice and wheat are handed over to FCI in the central pool.  The expenditure incurred by the states and its agencies are reimbursed by the central government.  At present, 15 states undertake decentralised procurement for rice while eight states undertake the decentralised procurement of wheat.35   

|         | Year    | Rice    |   Wheat  |
|---------|---------|---------|----------|
| 2015-16 | 342.18  |         |   280.88 |
| 2016-17 | 381.06  |         |   229.61 |
| 2017-18 | 381.74  |         |   308.24 |
| 2018-19 | 443.99  |         |   357.95 |
| 2019-20 | 518.26  |         |   341.32 |
| 2020-21 | 602.45  |         |   389.92 |
| 2021-22 | 575.88  |         |   433.44 |
| 2022-23 | 434.83* | 187.92  |          |

In 2022-23, the wheat procurement for the central pool was 57% less as compared to the procurement in 2021-22.45  This was driven by lower domestic production of wheat and sale of wheat by farmers in the open market to benefit from higher prices in the aftermath of geo-political tensions.46  As a result of the lower procurement of wheat in 2022-23, the stock of wheat in the central pool as on January 1, 
2023 was 171.7 lakh metric tonnes.47  While this was above the foodgrain stocking norms of 138 lakh metric tonnes for wheat as on January 1 of each year, the actual stock in the central pool was the lowest since 2017.47,48  
Decentralised procurement: The Standing Committee on Food, Consumer Affairs, and Public Distribution (2022) noted that after 24 years of starting decentralised procurement, the scheme has not been implemented by all states/UTs.35  The Department had informed the Committee that since decentralised procurement involves the state governments to make arrangement for funds, storage, and manpower, they hesitate to adopt it.35 Decentralised procurement of foodgrains is considered to be more effective as it does not require FCI to take over the stock of foodgrains and then release it to states.35  The Standing Committee recommended that all states/UTs should adopt the decentralised procurement of foodgrains.  This would ensure the effective implementation of NFSA and make available foodgrains suited to local tastes for distribution under PDS.35  The Committee had recommended the central government to help states in adopting decentralised procurement. 

## Storage Capacity

In 2023-24, the central government has allocated Rs 104 crore for creation of storage capacity through FCI and state governments.5  FCI has its own network of storage infrastructure.  Further, it also hires additional storage facilities from Central Warehousing Corporation and state warehousing corporations.49 
The existing storage facilities are primarily conventional godowns where the foodgrains are stacked in bags.49  During peak procurement periods, FCI also uses cover and plinth (CAP) facilities for short-term storage of foodgrains.49  As on April 1, 2022, the storage capacity with FCI for central pool stocks was 427 lakh metric tonnes.50 The High Level Committee (2015) had recommended that CAP storage should be gradually phased out with no grain stocks remaining in CAP for more than three months.16  The Committee also recommended to replace CAP storage with silo bag technology and conventional storages wherever it was possible.   
Note: Data as on June 1 of every year. Data for covered and CAP storage. Sources: 13th Report, Standing Committee on Food, Consumer Affairs and Public Distribution, 2021; PRS. 

The Standing Committee (2021) noted that the utilisation of hired storage capacity is much higher than the storage capacity owned by FCI.49  The Committee recommended that godowns should be hired only when it is absolutely necessary. 49  It recommended that FCI should utilise its own storage capacity to the maximum to save funds spent on renting storage space.49  The Standing Committee (2021) was informed that storage capacity is hired only when there is absolute necessity for it.49  This is the reason that hired capacity is utilised fully.  Also, hired storage facility allows more flexibility in responding to changes in procurement pattern or change in offtake of food grains.49 The Standing Committee (2022) noted that physical and financial targets for construction of godowns was not met between 2019-20 and 2021-22.35  In 2021-22, against a target of 30,020 metric tonnes storage in north-eastern states, 20,000 metric tonnes was constructed up to February 8, 2022.35  In other states, no construction of godowns could be completed in 2021-22 against a target of 26,220 metric tonnes.  The reasons for not meeting construction targets of godowns was cited to be: (i) COVID-19 related lockdowns, (ii) inability of state governments to timely hand over land parcels in the north east, (iii) local interference and law and order situation, and (iv) difficult geographical terrain.35 The Committee noted that inadequate storage space hampers the efficiency of the PDS.  It recommended improving the pace of construction of storage godowns going ahead in both north eastern and other states.35  

## Sugarcane

The Department is also responsible for formulation of policies and regulations for the sugar sector.  This includes fixing the Fair and Remunerative Price (FRP) of sugarcane which is payable to farmers by sugar factories, training in sugar technology, and regulation of supply of free sale sugar.  As of December 16, 2022, Rs 5,143 crore were pending in dues to sugarcane farmers for the sugar seasons (October-September) up to 2021-22.51  According to the Department, domestic production in excess of demand leads to an accumulation of sugar stock.35 In a normal sugar season, the production of sugar is around 310-320 lakh metric tonnes against domestic consumption of about 260 lakh metric tonnes.35 This causes blockage of funds and adversely affects the liquidity of sugar mills, thereby leading to accumulation of arrears to sugarcane farmers.   
Ethanol Blending Programme: The central government has been implementing the ethanol blended petrol (EBP) programme to increase the value addition in sugar industry and clear the arrears of sugarcane farmers.52  The National Biofuel Policy, 2018, mandated 10% blending of ethanol into motor fuel by 2022 and 20% by 2030.35  The target of achieving average 10% blending was achieved in June 2022.53  The original target has been revised to achieve 20% blending by 2025-26.35 In order to utilise the excess stock of sugarcane, the central government has permitted the production of ethanol from sugarcane juice, molasses (by-product in the production of sugar), sugar, and sugar syrup.35 The ethanol supplied to oil marketing companies (OMCs) has increased from 38 crore litre in ethanol supply year (December-November) 2013-14 to over 452 crore litre in 2021-22.53 
Sugarcane prices: Certain state governments fix their own State Advised Price (SAP) at levels higher than the FRP announced by the central government. This causes further strain on the financial health of the sugar mills.54  A Task Force on Sugarcane and Sugar Industry (2020) recommended that sugarcane prices must be linked to sugar prices.54  Increases in FRP should be kept moderate and state announcing SAP should also bear the additional costs associated with it.54  The Task Force recommended a staggered payment mechanism for sugarcane.  However, it should be ensured that the entire dues to the farmers are cleared within two months.54  The central government also fixes the minimum selling price for white/refined sugar.  This was increased from Rs 29 per kg to Rs 31 per kg with effect from February 14, 2019.55  The task force had recommended increasing the minimum selling price of sugar to Rs 33 per kg with it being reviewed six months after notification.54  It observed that raising the selling price would help sugar mills  to cover their production and maintenance costs

## 

1 Ministry-wise Summary of Budget Provisions, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sumsbe.pdf. 2 About DCA, Department of Consumer Affairs, https://consumeraffairs.nic.in/about-us/about-dca. 3 Department of Consumer Affairs, Expenditure Budget, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe14.pdf.  
4 Introduction, Department of Food and Public Distribution, https://dfpd.gov.in/index.htm. 5 Department of Food and Public Distribution, Expenditure Budget, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe15.pdf. 6 The National Food Security Act, 2013, https://www.indiacode.nic.in/bitstream/123456789/2113/1/20132 0.pdf. 7 Lok Sabha Unstarred Question No. 1192, Ministry of Consumer Affairs, Food and Public Distribution, February 9, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU1192.pdf. 8 Subsidy, Budget and Cost, Food Corporation of India, as accessed on February 8, 2023, https://fci.gov.in/finances.php?view=109. 9 Unstarred Question No. 1994, Ministry of Consumer Affairs, Food & Public Distribution, Rajya Sabha, December 23, 2022, https://pqars.nic.in/annex/258/AU1994.pdf. 10 "Free foodgrains to 81.35 crore beneficiaries under National Food Security Act: Cabinet Decision", Press Information Bureau, Ministry of Consumer Affairs, Food & Public Distribution, December 23, 2022, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1886215. 11 Unstarred Question No, 2287, Lok Sabha, Ministry of Home Affairs, December 20, 2022, https://pqals.nic.in/annex/1710/AU2287.pdf. 12 Population Projections for India and States 2011-2036, National Commission on Population, Ministry of Health and Family Welfare, July 2020, https://main.mohfw.gov.in/sites/default/files/Population%20Proje ction%20Report%202011-2036%20- %20upload_compressed_0.pdf. 13 Miscellaneous Application No. 94 of 2022, Supreme Court of India, July 21, 2022, https://main.sci.gov.in/supremecourt/2022/2157/2157_2022_11_ 16_36554_Judgement_21-Jul-2022.pdf. 14 "Department of Food & Public Distribution refutes a news report published in 'The Wire' regarding distribution of food grains & pulses", Press Information Bureau, Ministry of Consumer Affairs, Food and Public Distribution, June 4, 2020, https://pib.gov.in/PressReleasePage.aspx?PRID=1629465, 15 Household Consumption of Various Goods and Services in India, 2011-12, Ministry of Statistics and Programme Implementation, June 2014, http://164.100.161.63/sites/default/files/publication_reports/Repo rt_no558_rou68_30june14.pdf. 16 Report of the High Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, https://fci.gov.in/app2/webroot/upload/News/Report%20of%20th e%20High%20Level%20Committee%20on%20Reorienting%20t he%20Role%20and%20Restructuring%20of%20FCI_English.pdf . 17 Pricing, Overview of TPDS, Sales, Food Corporation of India, as accessed on January 25, 2023, https://fci.gov.in/sales.php?view=41. 0Affairs%20&%20Public%20Distribution/16_Food_Consumer_
20 Budget and Cost, Finance and Accounts, Food Corporation of India, as accessed on January 25, 2023, https://fci.gov.in/finances.php?view=109. 21 "Centre names new integrated food security scheme launched from 1 January 2023 as "Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY)", Press Information Bureau, Ministry of Consumer Affairs, Food and Public Distribution, January 11, 
2023, https://pib.gov.in/PressReleasePage.aspx?PRID=1890272. 22 Chapter 4, Volume-I Main Report, 15th Finance Commission, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC%20VOL%20I%20Main%20Report.pdf. 23 National Family Health Survey (NFHS-5), 2019-20, India Report, Ministry of Health and Family Welfare, March 2022, https://dhsprogram.com/pubs/pdf/FR375/FR375.pdf. 24 Chapter 8: Department of Food and Public Distribution, Volume-III The Union, 15th Finance Commission, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC-Vol%20III-Union.pdf. 25 "75987138.23 MT tentative total allocation under PMGKAY (Phase –I to Phase-V)", Press Information Bureau, Ministry of Consumer Affairs, Food and Public Distribution, February 2, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1794809. 26 First Advance Estimates of Production of Foodgrains for 2022- 23, Ministry of Agriculture and Farmers Welfare, September 21, 2022, https://eands.dacnet.nic.in/Advance_Estimate/Time%20Series%2 01%20AE%202022-23%20(English).pdf. 27 "India Inching Towards 'Atmanirbharta' in Pulses", Press Information Bureau, Ministry of Information and Broadcasting, June 15, 2022, https://static.pib.gov.in/WriteReadData/specificdocs/documents/2 022/jun/doc202261565201.pdf. 28 Third Report: 'Demands for Grants (2015-16)', Standing Committee on Food, Consumer Affairs and Public Distribution, Lok Sabha, April 2015, https://loksabhadocs.nic.in/lsscommittee/Food,%20Consumer%2 0Affairs%20&%20Public%20Distribution/16_Food_Consumer_ Affairs_And_Public_Distribution_3.pdf. 29 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_D irect_Cash_Transfers_to_the_Poor.pdf. 30 Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds. pdf. 31 Role of the Public Distribution System in Shaping Household Food and Nutritional Security in India, National Council of Applied Economic Research, December 2016. 32 S.O. 371(E), Notification, Ministry of Consumer Affairs, Food and Public Distribution, February 8, 2017, https://egazette.nic.in/WriteReadData/2017/174131.pdf. 33 Unstarred Question No. 1522, Rajya Sabha, Ministry of Consumer Affairs, Food and Public Distribution, December 10, 2021, https://pqars.nic.in/annex/255/AU1522.pdf. 34 S.O. 6010(E), Notification, Ministry of Consumer Affairs, Food, and Public Distribution, December 22, 2022, https://egazette.nic.in/WriteReadData/2022/241315.pdf. 35 18th Report: 'Demands for Grants (2022-23)', Standing Committee on Food, Consumer Affairs and Public Distribution, Lok Sabha, March 2022, https://loksabhadocs.nic.in/lsscommittee/Food,%20Consumer%2 0Affairs%20&%20Public%20Distribution/17_Food_Consumer_ Affairs_And_Public_Distribution_18.pdf. 36 Justice K. S. Puttaswamy (Retd.) and Another vs Union of India and Others, W. P. (C.) No. 494 of 2012, https://main.sci.gov.in/supremecourt/2012/35071/35071_2012_Ju dgement_26-Sep-2018.pdf. 37 12th Report, Strengthening of Public Distribution System - Augmenting Use of Technological Means and Implementation of  
'One Nation, One Ration Card' Scheme, Standing Committee on Food, Consumer Affairs and Public Distribution, Lok Sabha, 
 
March 2021, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/17_Food_Consumer_Affair s_And_Public_Distribution_12.pdf. 38 "Centre revises norms of Central Assistance paid to States/UTs for meeting the expenditure towards intra-State movement, handling of foodgrains and margins paid to fair price shop dealers under National Food Security Act, 2013", Press Information Bureau, Ministry of Consumer Affairs, Food, and Public Distribution, May 25, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1828270. 39 "Aadhaar and Food Security in Jharkhand: Pain Without Gain?", Economic and Political Weekly, December 16, 2017. 40 "Cash transfer of food subsidy directly into the bank account of PDS being implemented on a pilot basis in three UTs-Chandigarh and Puducherry since September, 2015 and urban areas of Dadra and Nagar Haveli since March, 2016", Press Information Bureau, Ministry of Consumer Affairs, Food and Public Distribution, March 30, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1811483# :~:text=The%20Direct%20Benefit%20Transfer%20(DBT,(vi)%2 0promote%20financial%20inclusion.. 41 Unstarred Question No. 1533, Rajya Sabha, Ministry of Consumer Affairs, Food and Public Distribution, December 10, 2021, https://pqars.nic.in/annex/255/AU1533.pdf. 42 "Pilot Project for Direct Benefit Transfer withdrawn 10 months after launch", The Indian Express, as accessed on January 28, 
2023, https://indianexpress.com/article/india/jharkhand-pilotproject-for-direct-benefit-transfer-withdrawn-10-months-afterlaunch-5299959/. 43 Unstarred Question No, 212, Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution, December 7, 2022, https://pqals.nic.in/annex/1710/AU212.pdf. 44 Policy and System, Procurement, Food Corporation of India, as accessed on January 28, 2023, https://fci.gov.in/procurements.php?view=86. 45 Procurement of Wheat for central Pool, Food Corporation of India, as accessed on February 13, 2023, https://fci.gov.in/app/webroot/upload/Procurement/3.%20wheat% 20state%20last%2010%20years%20wise%20.pdf. 46 "Sufficient food grain stocks under Central Pool: Centre", Press Information Bureau, December 15, 2022, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1883624.  
47 Food grains stock in central pool for the years 2016-2023 (Opening Balance), Stocks, Food Corporation of India, as accessed on January 29, 2023, https://fci.gov.in/stocks.php?view=217. 48 Current Foodgrains Stocking Norms, Stocks, Food Corporation of India, as accessed on January 29, 2023, https://fci.gov.in/stocks.php?view=18.  
49 13th Report, Procurement, Storage and Distribution of Foodgrains by Food Corporation Of India, Standing Committee on Food, Consumer Affairs and Public Distribution, August 2021, https://loksabhadocs.nic.in/lsscommittee/Food,%20Consumer%2 0Affairs%20&%20Public%20Distribution/17_Food_Consumer_ Affairs_And_Public_Distribution_13.pdf. 50 Overview, Storage and Contract, Food Corporation of India, as accessed on January 28, 2023, https://fci.gov.in/storages.php?view=35. 51 Unstarred Question No. 1215, Rajya Sabha, Ministry of Consumer Affairs, Food and Public Distribution, December 16, 2022, https://pqars.nic.in/annex/258/AU1215.pdf. 52 Ethanol Blended Petrol Programme (EBP Programme), Ministry of Consumer Affairs, Food and Public Distribution, as accessed on February 2, 2023, https://dfpd.gov.in/ebpProgramme_C.htm. 53 "Cabinet approves Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies (OMCs) under Ethanol Blended Petrol (EBP) Programme - Revision of ethanol price for supply to Public Sector OMCs for Ethanol Supply Year (ESY) 2022-23", Press Information Bureau, Cabinet Committee on Economic Affairs, November 2, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1873021. 54 Report of the Task Force on Sugarcane and Sugar Industry, NITI Aayog, March 2020, https://www.niti.gov.in/sites/default/files/2021- 08/10_Report_of_the_Task_Force_on_Sugarcan_%20and_Sugar _Industry_0.pdf. 55 Sugar Pricing Policy, Department of Food & Public Distribution, as accessed on February 3, 2023, https://dfpd.gov.in/gen_policy.htm.   
 

## Annexure: Food And Public Distribution

% change in 2023-
24 BE over 2022-
 
2021-22 
Actuals 
2022-23 
Budgeted 
2022-23 
Revised 
2023-24 
Budgeted 
23 RE 
Food subsidy 
2,88,969 
2,06,831 
2,87,194 
1,97,350 
-31% 
        Subsidy to Food Corporation of India (FCI) 
2,08,929 
1,45,920 
2,14,696 
1,37,207 
-36% 
        Subsidy to states (decentralised procurement) 
79,790 
60,561 
72,283 
59,793 
-17% 
        Sugar subsidy payable under PDS 
250 
350 
216 
350 
62% 
6,000 
6,572 
6,572 
7,425 
13% 
Assistance to state agencies for intra-state movement of food grains and for margin of fair price shops' dealers Investment in equity capital of FCI 
2,500 
1,900 
1,900 
- 
-100% 
3,478 
- 
21 
- 
-100% 
Scheme for providing assistance to Sugar Mills for expenses on marketing costs and costs of transport on export of sugar Scheme for Assistance to Sugar Mills for 2019-20 season 
2,121 
- 
15 
- 
-100% 
160 
300 
260 
400 
54% 
Scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity Department 
3,04,361 
2,15,960 
2,96,304 
2,05,514 
-31% 

Sources: Demand No. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2023-24; PRS. 

## 

|         |       |       | Year    | Procurement   |       | Offtake    | % Offtake    | Stocks    |
|---------|-------|-------|---------|---------------|-------|------------|--------------|-----------|
| Rice    | Wheat | Total | Rice    | Wheat         | Total | Rice       | Wheat        | Total     |
| 2004-05 | 24.7  | 16.8  | 41.5    | 23.2          | 18.3  | 41.5       | 100%         | 13.3      |
| 2005-06 | 27.6  | 14.8  | 42.4    | 25.1          | 17.2  | 42.3       | 100%         | 13.7      |
| 2006-07 | 25.1  | 9.2   | 34.3    | 25.1          | 11.7  | 36.8       | 107%         | 13.2      |
| 2007-08 | 28.7  | 11.1  | 39.9    | 25.2          | 12.2  | 37.4       | 94%          | 13.8      |
| 2008-09 | 34.1  | 22.7  | 56.8    | 24.6          | 14.9  | 39.5       | 70%          | 21.6      |
| 2009-10 | 32.0  | 25.4  | 57.4    | 27.4          | 22.4  | 49.7       | 87%          | 26.7      |
| 2010-11 | 34.2  | 22.5  | 56.7    | 29.9          | 23.1  | 53.0       | 93%          | 28.8      |
| 2011-12 | 35.1  | 28.3  | 63.4    | 32.1          | 24.3  | 56.4       | 89%          | 33.4      |
| 2012-13 | 34.0  | 38.2  | 72.3    | 32.6          | 33.2  | 65.9       | 91%          | 35.5      |
| 2013-14 | 31.9  | 25.1  | 56.9    | 29.2          | 30.6  | 59.8       | 105%         | 30.5      |
| 2014-15 | 32.0  | 28.1  | 60.2    | 30.7          | 25.2  | 55.9       | 93%          | 23.8      |
| 2015-16 | 34.2  | 28.1  | 62.3    | 31.8          | 31.8  | 63.7       | 102%         | 28.8      |
| 2016-17 | 38.1  | 22.9  | 61.0    | 32.8          | 29.1  | 61.9       | 101%         | 29.8      |
| 2017-18 | 38.2  | 30.8  | 69.0    | 35.0          | 25.3  | 60.3       | 87%          | 30.0      |
| 2018-19 | 44.4  | 35.8  | 80.2    | 34.4          | 31.5  | 65.9       | 82%          | 39.8      |
| 2019-20 | 51.8  | 34.1  | 86.0    | 34.4          | 26.4  | 60.8       | 71%          | 49.1      |
| 2020-21 | 60.1  | 39.0  | 99.1    | 56.3          | 36.8  | 93.1       | 94%          | 49.8      |
| 2021-22 | 58.1  | 43.3  | 101.4   | 53.3          | 49.1  | 102.3      | 101%         | 54.9      |

Note: Total stocks include coarse cereals. Sources: Handbook of Statistics on Indian Economy, Reserve Bank of India; PRS. 

 

| Aadhaar              | Online    |
|----------------------|-----------|
| State/UT             |           |
| Digitisation of      |           |
| Ration Cards         |           |
| Computerisation      |           |
| of Supply Chain      |           |
| Seeding with         |           |
| Ration Cards         |           |
| Allocation of        |           |
| Food grains          |           |
| Andhra Pradesh       | 100%      |
| Arunachal Pradesh    | 100%      |
| Assam                | 100%      |
| Bihar                | 100%      |
| Chhattisgarh         | 100%      |
| Goa                  | 100%      |
| Gujarat              | 100%      |
| Haryana              | 100%      |
| Himachal Pradesh     | 100%      |
| Jharkhand            | 100%      |
| Karnataka            | 100%      |
| Kerala               | 100%      |
| Madhya Pradesh       | 100%      |
| Maharashtra          | 100%      |
| Manipur              | 100%      |
| Meghalaya            | 100%      |
| Mizoram              | 100%      |
| Nagaland             | 100%      |
| Odisha               | 100%      |
| Punjab               | 100%      |
| Rajasthan            | 100%      |
| Sikkim               | 100%      |
| Tamil Nadu           | 100%      |
| Telangana            | 100%      |
| Tripura              | 100%      |
| Uttar Pradesh        | 100%      |
| Uttarakhand          | 100%      |
| West Bengal          | 100%      |
| 100%                 | 100%      |
| Islands              |           |
| Chandigarh           | 100%      |
| 100%                 | 100%      |
| Haveli and Daman and |           |
| Diu                  |           |
| Delhi                | 100%      |
| Jammu and Kashmir    | 100%      |
| Ladakh               | 100%      |
| Lakshadweep          | 100%      |
| Puducherry           | 100%      |
| Total                |           |

Sources: 18th Report, Standing Committee on Food, Consumer Affairs, and Public Distribution (2022); PRS. 


## Table 10: Outstanding Dues Of Sugarcane Farmers (Rs Crore)

| State          |       |
|----------------|-------|
| 2017-18 and    |       |
| earlier        |       |
| 2018-19        |       |
| Andhra Pradesh | 1     |
| Bihar          | 18    |
| Chhattisgarh   | 0     |
| Gujarat        | 54    |
| Haryana        | 0     |
| Karnataka      | 3     |
| Madhya Pradesh | 8     |
| Maharashtra    | 205   |
| Odisha         | 3     |
| Punjab         | 0     |
| Tamil Nadu     | 1,380 |
| Telangana      | 0     |
| Uttar Pradesh  | 137   |
| Uttarakhand    | 36    |
| Total          |       |

Sources: Unstarred Question No. 1215, Rajya Sabha, December 16, 2022; PRS. 

## Demand For Grants 2023-24 Analysis Home Affairs

The Ministry of Home Affairs is the nodal ministry for matters concerning internal security, central armed police forces, border management, disaster management, census, and centre-state relations. Article 355 of the Constitution enjoins the Union to protect every state government against internal disturbance.1  The Ministry of Home Affairs is empowered to extend manpower, financial support, guidance and expertise to state governments for maintenance of security.2  In addition, the Ministry makes certain grants to union territories (UTs), since they are not covered by the Finance Commission's recommendations on devolution and, thus, do not receive any share in central taxes. This note analyses the expenditure trends and budget proposals for the Ministry of Home Affairs for 2023- 24, and discusses issues across the sectors administered by the Ministry.  

## Overview Of Finances

In 2023-24, the Ministry of Home Affairs has been allocated Rs 1,96,035 crore.  This is an increase of 1.1% over the revised estimates for 2022-23 (Rs 1,93,912 crore).  The budget for the Ministry constitutes 4.4% of the total expenditure budget of the union government in 2023-24, and is the fifth highest allocation across ministries. Since 2019, expenditure of the Ministry also includes grants to the newly formed UTs of Jammu and Kashmir, and Ladakh.  The average annual growth rate in expenditure over the last ten years has been 43%. 

Note: Figures for 2022-23 are Revised Estimates and for 2023-24 are Budget Estimates. 

Source: Union Budgets 2014-15 to 2023-24; PRS. 

23.  The expenditure of the Ministry in 2021-22 was nearly 5% higher than the budgetary estimate.  The expenditure of the Ministry has been higher than the budgeted expenditure in all years since 2015-16.  The exception was 2020-21, when the actual expenditure was 11% lower than the allocation.  This was due to the onset of the COVID-19 pandemic and a shift in expenditure priorities.3   
Note: Figures for 2022-23 are Revised Estimates. 

Source: Union Budgets 2013-14 to 2023-24; PRS. 

Of the Ministry's total budget for 2023-24, (i) 65% of the expenditure is on police, (ii) 31% is on grants to UTs, and (iii) 4% is on miscellaneous items such as disaster management, rehabilitation of refugees and migrants, and conducting the Census.  Table shows the allocations to these three heads. 

Major 
Head 
2021-22 
Actuals 
2022-23 
Revised 
2023-24 
Budget 
% Change 
(BE 2023-24/ 
RE 2022-23) 
Police  
1,06,622 
1,19,070 
1,27,757 
7% 
UTs 
56,490 
69,040 
61,118 
-11% 
Others 
5,679 
5,802 
7,160 
23% 
Total 
1,68,791 
1,93,912 
1,96,035 
1.1% 

Note: BE - Budget Estimates, RE - Revised Estimates.  
Expenditure under 'Others' includes disaster management and administrative matters. Source: Union Budget 2023-24; PRS.  
Police: Expenditure on police includes allocation towards the Central Armed Police Forces, the Intelligence Bureau, and the Delhi Police.  For 2023- 24, Rs 1,27,757 crore has been allocated towards police.  This is an increase of 7% over the revised estimates for 2022-23.    
Grants and loans to UTs: In 2023-24, Rs 61,118 
crore has been allocated towards grants and loans for the administration of UTs.  This is a decrease of 11% 
from the revised estimates for 2022-23 (Rs 69,040 
crore).  The decrease in allocation is largely due to a 20% reduction in allocation to Jammu and Kashmir. The allocation to the UTs of Jammu and Kashmir, and Ladakh (both formed after the reorganisation of the former state of Jammu and Kashmir in 2019) is 68% of the total amount allocated to all UTs. 

Other items: Other expenditure items of the Ministry include disaster management, rehabilitation of refugees and migrants, and administrative matters. In 2023-24, these items have been allocated Rs 7,160 crore.  This is 23% higher than the revised estimates for 2022-23 (Rs 5,802 crore).  This is primarily on account of increase in allocation towards the Census and the office of the Registrar General of India, from Rs 520 crore (at the revised estimate stage) in 2021- 22 to Rs 1,565 crore in 2023-24.  

## Analysis Of Key Areas Of Expenditure Police

In 2023-24, Rs 1,27,757 crore has been budgeted for police expenditure.  This includes allocations to various police organisations, including: (i) the Central Armed Police Forces, primarily responsible for border protection and internal security, (ii) Delhi Police, responsible for maintenance of law and order in Delhi, and (iii) Intelligence Bureau, the nodal agency for collection of domestic intelligence.  Funds are also allocated for modernisation of police, and border infrastructure. 

 
2020-21 Actual 
2022-23 RE 
2023-24 BE 
% Cha nge* 
Central Armed Police Force 
81,235 
90,870 
94,665 
4% 
Delhi Police 
11,131 
11,618 
11,662 
0% 
Police Infrastructure 
2,839 
2,188 
3,637 
66% 
Intelligence Bureau 
2,569 
3,022 
3,418 
13% 
Modernisation of police 
3,307 
2,432 
3,750 
54% 
Border Infrastructure 
2,662 
3,739 
3,545 
-5% 
Others** 
2,879 
5,201 
7,080 
36% 
Total 
1,06,622 
1,19,070 
1,27,757 
7% 

Note: * % change refers to change (2023-24 BE/ 2022-23RE) **Includes schemes, such as safety of women and Land Port Authority of India. BE - Budget Estimates, RE - Revised Estimates. Source: Home Affairs Demand for Grants 2023-24; PRS. 

The total budget for police in 2023-24 has increased by 7% over the revised estimates for 2022-23.  Over the last ten years (2014-24), expenditure on police has increased at an average annual rate of 11%.  
Note: Revised Estimates used for 2022-23 and Budget Estimates for 2023-24.  Actuals used for all other years. Source: Union Budgets 2015-16 to 2023-24; PRS. 

Figur shows the percentage of utilisation of the amount budgeted for police from 2013-23.  Since 2015-16, the actual expenditure on police has been higher than the budget estimate, except in 2020-21, when spending was 13% lower than the budget.   
Note: Figures for 2022-23 are Revised Estimates.  
Source: Union Budgets 2013-14 to 2023-24; PRS. 

## Central Armed Police Forces

The Central Armed Police Forces (CAPFs) comprise seven forces: (i) the Central Reserve Police Force (CRPF) which assists in internal security and law and order, (ii) Central Industrial Security Force (CISF) which protects vital installations (such as airports) and public sector undertakings, (iii) the National Security Guard (NSG) which is a special counterterrorism force, and (iv) four border guarding forces, namely, the Border Security Force (BSF), the Indo- Tibetan Border Police (ITBP), the Sashastra Seema Bal (SSB), and the Assam Rifles (AR).  Though the AR functions under the administrative control of the Home Affairs Ministry, its operational control lies with the Ministry of Defence.4  The AR, ITBP, SSB, and BSF are the Border Guarding Forces (see Table 13 in the Annexure). 

The CAPFs have been allocated Rs 94,665 crore in 2023-24.  This accounts for 74% of the expenditure on police, and is 4% higher than the revised estimates for 2022-23 (Rs 90,870 crore).  Of this, the highest expenditure is towards the CRPF, which will receive 34% (Rs 31,772 crore) of the total allocation for CAPFs, followed by the BSF, which will receive 26% (Rs 24,771 crore) of the allocation. In 2023-24, out of the total spending on CAPFs, only 2% is on capital expenditure, while the remaining 98% is on revenue expenditure.  This is in line with the average trend in the last ten years with capital expenditure staying within the 1% to 2% band every year.  Capital expenditure includes spending on procuring machinery, equipment, and vehicles. Revenue expenditure includes salaries, arms and ammunition, and clothing.  Note that the capital component does not include funds for construction. 

## Vacancies

As of January 2023, there is a 9% vacancy in the CAPF and AR as against the actual strength.5  As of January 01, 2021, SSB reported the highest vacancy against actual strength at 23% (see **Table 3**).6   
The Standing Committee on Home Affairs (2018) highlighted that there was a lack of estimation of future vacancies, leading to delays in recruitments. The Committee has recommended that the Ministry proactively identify and assess vacancies to recruit personnel on time.7  The Ministry has decided to reserve 10% of vacancies for ex-Agniveers in the recruitment to the post of constable/rifleman in the CAPF and AR.8  Further, a provision has been made for relaxation in the upper age limit and exemption from the Physical Efficiency Test.  

CAPFs 
Sanctioned 
Strength 
Actual 
Strength 
% Vacancies 
CRPF 
3,24,723 
2,96,393 
10% 
BSF 
2,65,173 
2,36,158 
12% 
CISF 
1,63,313 
1,39,192 
17% 
SSB 
97,244 
78,809 
23% 
ITBP 
88,439 
82,930 
7% 
AR 
66,411 
58,121 
14% 
NSG 
10,844 
9,369 
16% 
Total  
1,016,695 
901,310 
11% 

In January 2016, 33% posts at constable level were reserved for women in the CRPF and CISF.  Further, around 14-15% of constable posts were reserved for women in the border guarding forces.9  However, as of January 2023, the total strength of women personnel in the CAPF was 3.8% against the total sanctioned strength.10  The Standing Committee on Home Affairs (2022) recommended the Ministry to take concrete steps in increasing the representation of women by conducting fast track recruitment drives for women in CISF and CRPF.12  Further, the Committee recommended the need to create separate arrangements in border outposts to attract women recruits.  Vacancies for women in CAPFs are given in **Table 4.**  

Strength of 
Force 
Sanctioned 
strength 
women 
% of total 
strength  
personnel 
CRPF 
2,96,393 
9,454 
3.2% 
BSF 
2,36,158 
7,391 
3.1% 
CISF 
1,39,192 
9,320 
6.7% 
ITBP 
82,930 
2,518 
3.0% 
SSB 
78,809 
3,610 
4.6% 
AR 
58,121 
1,858 
3.2% 
Total 
8,91,603 
34,151 
3.8% 

Note: CRPF - Central Reserve Police Force; BSF - Border Security Force; CISF - Central Industrial Security Force; AR - Assam Rifles; ITBP - Indo-Tibetan Police Force; SSB - Sashastra Seema Bal; NSG - National Security Guard. Source: Unstarred Question No. 1698, Rajya Sabha, Ministry of Home Affairs, August 02, 2022; PRS. 

## Living Conditions

The Standing Committee on Home Affairs (2022) has observed that certain CRPF camps in Jammu and Kashmir were functioning from rented accommodation.  It noted that the housing problem was due to shortage of accommodation facilities and lack of availability of lands.11  Further, the Committee highlighted that the living conditions were not conducive and needed to be addressed urgently.  As of February 2022, the housing satisfaction level in CAPFs was 47% as against authorised dwelling units.11  In the Ministry's reply it was stated that a committee would be constituted to review the conditions of CRPFs camps, which are functioning from rented accommodation.12 About 17% of the 23,456 houses under construction for CAPFs as of March 2021 were completed by April 2022.12  In 2023-24, Rs 3,367 crore has been budgeted for building projects for CAPFs and Central Police Organisations.  Since 2019-20, there has been underutilisation of funds for building projects.  In 2021-22, the actual expenditure (Rs 2,459 crore) on building projects was 26% less than the budgeted estimate (Rs 3,306 crore).  

## Fencing Of Border Areas

Proper management of the border is critical for maintaining national security.13  The Indo-
Bangladesh border is India's longest border at 4,097 
km.  The fencing work across the Indo-Bangladesh border has not been completed with about 24% of the border being unfenced.14  Further, the state of Mizoram has only half of its total international border with Bangladesh fenced (see **Table 5**).  According to the Ministry, the fencing of the border is set to be complete by March 2024.  The Ministry has cited difficult terrain, land acquisition problems, short working seasons, protests, and objections by Border Guard Bangladesh as reasons for incompletion. The Standing Committee on Home Affairs (2022) highlighted that only 50% of the revised estimates for 
2021-22 had been utilised till December 31, 2022.11  

State 
Total 
International 
Area 
fenced 
Balance 
length  
% of 
border 
Border 
unfenced 
Assam 
263 
210 
53 
20% 
W. Bengal 
2,217 
1,638 
579 
26% 
Meghalaya 
443 
326 
117 
26% 
Mizoram 
318 
155 
163 
51% 
Tripura 
856 
794 
62 
7% 
Total 
4,097 
3,123 
973 
24% 

Source: Unstarred Question No. 2437, Rajya Sabha, Ministry of Home Affairs, March 11, 2021; PRS. 

In 2023-24, Rs 3,545 crore has been budgeted for border infrastructure and management.  This is a decrease of 5% from the revised estimates for 2022- 23 (Rs 3,739 crore).  This includes allocations for maintenance of border works, border check posts and outposts, and capital outlay for various items including barbed wire fencing, construction of roads, and hi-tech surveillance on the Indo-Bangladesh and Indo-Pakistan borders. 

% 
 
2021-22 
Actuals 
2022-
23 RE 
2023-
24 BE 
Change 
(BE 
2023-
24/ RE 
2022-
23) 
284 
268 
351 
31% 
Maintenance and Border Check post Capital Outlay 
2,378 
3,471 
3,194 
-8% 
Total 
2,662 
3,739 
3,545 
-5% 

Note: BE - Budget Estimates, RE - Revised Estimates. Source: Union Budget 2023-24; PRS. 

Between 2015-16 and 2023-24, the expenditure on border infrastructure and management has increased at an average annual growth rate of 8%, with a significant decrease in 2021-22 (**Figure 6)**.  
Note: Revised Estimates used for 2022-23 and Budget Estimates used for 2023-24.  Figures for all other years are actuals. Source: Union Budgets 2017-18 to 2023-24; PRS.   

## Delhi Police

An amount of Rs 11,662 crore has been allocated to the Delhi Police in 2023-24.  This is a 0.4% increase over the revised estimates for 2022-23. 

## Vacancies

As on July 15, 2022, Delhi Police reported a vacancy of 15% as against the actual strength.15  

| Actual     | % of     |
|------------|----------|
| Force      |          |
| Sanctioned |          |
| strength   | strength |
| 2015       |          |
|            |          |
| 82,242     | 77,083   |
|            |          |
| 7%         |          |
|            |          |
| 2016       |          |
|            |          |
| 82,242     | 76,348   |
|            |          |
| 8%         |          |
|            |          |
| 2017       |          |
|            |          |
| 84,417     | 82,979   |
|            |          |
| 2%         |          |
|            |          |
| 2018       |          |
|            |          |
| 86,531     | 74,712   |
|            |          |
| 16%        |          |
|            |          |
| 2019       |          |
|            |          |
| 91,963     | 82,190   |
|            |          |
| 12%        |          |
|            |          |
| 2020       | 91,962   |
| 2021*      | 94,353   |
| 2022**     | 94,255   |

Note: *as on March 15, 2021. ** as on July 15, 2022. Source: Bureau of Police Research and Development; Starred Question No. 302, Rajya Sabha, March 24, 2021, Unstarred Question No. 1476, Lok Sabha, July 26, 2022; PRS. 

Since 2018, the vacancy rate in the Delhi Police has been higher than 10% of the sanctioned strength. Vacancies in the Delhi Police force varies across different ranks.  For instance, as of February 2022, 
26% of the sanctioned strength for constable posts are vacant.16  The Standing Committee on Home Affairs (2021) observed that women were not adequately represented in the Delhi Police.17  In 2015, the central government had approved 33% reservation for women in direct recruitment in nongazetted posts from constable to sub-inspector.18 As of February 2022, women personnel made up for 13% (10,205 personnel) of the actual strength in the police force.19 The highest percentage of women police personnel in a state/UT as against actual strength is in Chandigarh (22%) followed by Tamil Nadu (19.3%).20  Meanwhile, Kerala and Andhra Pradesh reported 7% and 6% of women police personnel, respectively.  As of January 2021, there were 251 persons per Delhi police personnel.  Delhi Police had more than the national average of 656 people per police personnel.  Delhi Police is one of the largest metropolitan police forces in the world.21 The strength of the Delhi Police follows the recommendations of the Srivastava Committee to address the population of the city and the rising problems of policing.21  

## Poor Logistical Management

An effective communication and technology system is imperative for supporting police personnel in performing their duties.  According to a Comptroller and Auditor General of India report (2020), between April 2018 and March 2019, the percentage of functional CCTV cameras ranged between 55%- 68%.22  During the same period, the number of CCTV cameras which could be monitored at the Integrated Command, Control, Coordination, and Communication Centre ranged from 22% to 48%. Surveillance footage from the remaining cameras was not available due to network related issues or faulty cameras.  Additionally, the report observed that Delhi Police was using a 20-year-old trunking system (APCO) beyond its normal span of 10 years. The 15th Finance Commission recommended that the Ministry allocate Rs 100 crore per annum for improved communication systems and technology upgradation of the police personnel from the Modernisation Fund for Defence and Internal Security (MFDIS).23  In 2023-24, Rs 1,019 crore was allocated to the modernisation of traffic and network communication for the Delhi Police.24  This was 265% more than the revised estimates of 2022-23 (Rs 385 crore).  

## Standards Of Living

The Mooshahary Committee (2005) had recommended that 100% family accommodation should be provided for all non-gazetted ranks of police personnel.25  As of August 2019, Delhi Police had only 15,360 quarters available for allotment to its force of over 80,000 personnel.22  Out of these quarters, about 10% were not being allotted for lack of basic facilities or were declared dangerous.  The Standing Committee on Home Affairs (2022) observed that the housing satisfaction rate for Delhi Police was 20%.11  Further, only Rs 52 crore had been used of the revised estimates (Rs 150 crore) for 2021-22 allocated for residential buildings for Delhi Police. The 15th Finance Commission recommended that the Ministry allocate Rs 500 crore for redeveloping/improving the residential facilities for police personnel in Delhi from the MFDIS.23 In 2023-24, an amount of Rs 270 crore has been allocated for infrastructural projects for the Delhi Police.  The budgetary allocation is a 4% increase from the revised estimates (Rs 259) for 2022-23. Since 2018-19, the actual expenditure on police infrastructure for Delhi Police has been higher than the budget estimate.  The only exception was the financial year 2020-21 where the budget estimate was higher than the actual expenditure.  Figure 9 in the Annexure shows the utilisation of funds on infrastructural projects for the Delhi Police between 2016-17 and 2022-23.  

## Modernisation Of Police Forces

'Police' and 'Public order' are state subjects as per the Seventh Schedule to the Constitution of India.26 However, due to financial constraints on states the Ministry has been supplementing the resources and efforts to the states since 1969-70.27  For 2023-24, the central government has made allocations towards four items related to modernisation of police forces. These are: (i) the Crime and Criminal Tracking Network and Systems (CCTNS) scheme; (ii) Special Infrastructure Scheme (SIS) for Left Wing Extremist (LWE) Areas; (iii) Narcotics Control Bureau; and (iv) Modernisation of Forensic Capacities. In 2023-24, Rs 3,800 crore has been allocated for modernisation of police forces, which is a 56% increase from the revised estimates for 2022-23 
(**Table 8**).  There has been a 73% increase in allocation towards the Modernisation of State Police Forces Scheme and the CCTNS scheme. Note that the central government has approved continuation of the umbrella scheme for modernisation of police forces with a central outlay of Rs 26,275 crore for the period 2021-22 to 2025- 26.28  This includes Rs 4,846 crore for modernisation of state police forces, and Rs 18,839 crore for security related expenditure for the UT of Jammu and Kashmir, insurgency-affected north eastern states, and areas affected by left wing extremism.28  

police (in Rs crore) 
| 2022-23                                              | %      | Major Head    | 2021-22    |
|------------------------------------------------------|--------|---------------|------------|
| Actuals                                              | RE     |               |            |
| 2023-                                                |        |               |            |
| 24 BE                                                | Change |               |            |
| (RE 22-                                              |        |               |            |
| 23 to BE                                             |        |               |            |
| 23-24)                                               |        |               |            |
| SRE and SIS                                          |        |               |            |
| for LWE areas                                        |        |               |            |
| 3,136                                                | 2,025  | 2,781         | 37%        |
| 170                                                  | 153    | 264           | 73%        |
| Modernisation                                        |        |               |            |
| of State Police                                      |        |               |            |
| Forces and                                           |        |               |            |
| CCTNS                                                |        |               |            |
| -                                                    | 5      | 5             | -          |
| Narcotics                                            |        |               |            |
| Control                                              |        |               |            |
| Bureau                                               |        |               |            |
| -                                                    | 250    | 750           | 200%       |
| Modernisation                                        |        |               |            |
| of forensic                                          |        |               |            |
| capacities                                           |        |               |            |
| Total                                                | 3,306  | 2,433         | 3,800      |
| Note: BE - Budget Estimates, RE - Revised Estimates. |        |               |            |
| Source: Union Budget 2023-24; PRS.                   |        |               |            |

Between 2011-12 and 2023-24, the expenditure on modernisation of police forces has increased at an average annual rate of 15%, despite a reduction in the last three years (**Figure 7**).  In 2019-20, states were released Rs 781 crore for the modernisation of police forces.29   About 62% of the funds released were underutilised in 2019-20.  Out of the total released funds, Rs 120 crore was released to some states for better performance incentives.  Andhra Pradesh, Tamil Nadu, and Gujarat were some of the states that received better performance incentives.29  
Note: Revised Estimates used for 2021-22 and Budget Estimates used for 2023-24.  Actuals used for all other years. 

Source: Union Budgets 2015-16 to 2023-24; PRS. 

## Modernisation Of Forensic Capacities

The Modernisation of Forensic Capacities Scheme is aimed to assist States/UTs to develop and modernise quality forensic science facilities and facilitate availability of trained manpower.30  In 2023-24, Rs 700 crore has been allocated for the modernisation of forensic capacities, which is a 180% increase from the revised estimates for 2022-23.  The key challenges faced by the Forensic Science Laboratories (FSL) include: (i) increasing capacities in FSL for timely investigation, (ii) upgrading technologies, (iii) availability of trained manpower, and (iv) and ensuring quality assurance and control.30 One of the functions of a forensic laboratory is to provide forensic crime case analytical support to the investigating agencies and the judiciary.31  Forensic laboratories conduct DNA-based forensic investigation on crimes such as, homicide, sexual assault, and robbery.32  The Standing Committee on Education, Women, Children, Youth, and Sports (2021) noted that law enforcement agencies failed to ensure timely justice against crimes against women.33 The Committee noted that accessibility to forensic capacities would increase the conviction rate by building a stronger case against perpetrators. Currently, there are six Central Forensic Laboratories (CFL) of the Directorate of Forensic Science Laboratories.34  An additional CFL is under the control of the Central Bureau of Investigation in Delhi.  As of July 2022, there are 32 State Forensic Laboratories, 81 Regional Forensic Science Laboratories, and 529 Mobile Forensic Science Vehicles with states and union territories.30 Forensic labs are not uniformly distributed across states/UTs.  For instance, Uttar Pradesh and Bihar have four and two functional regional forensic science laboratories, respectively.  Andhra Pradesh and Tamil Nadu have five and ten, respectively.20 The Committee on Home Affairs (2022) recommended that the Ministry should set up one forensic laboratory in every state capital within a two-year timeframe and every city with a population over one million persons.11  

## Lack Of Cyber Crime Cells

Under the Police Modernisation Scheme, the Ministry is supporting the establishment of Cyber Crime Police Station and Cyber Crime Investigations and Forensic Training Facilities in each State/UT. The Standing Committee on Home Affairs (2022) noted the rising rate of cyber crimes in the country.11 In 2021, there were 52,430 cyber crime cases reported, which was a 5.5% increase from 2020.35 The Committee highlighted that certain states, such as Rajasthan, Goa, and Punjab, do not have a single cyber crime cell.  As of January 2021, there were 466 cyber crime cells and 202 cyber crime police stations in the country.6  Only three cyber crime police stations were located across the union territories (two in J&K and one in Puducherry).  Jammu and Kashmir does not have a single cyber crime cell.  Further, a Comptroller and Audit General Report (2020) observed that out of the 142 personnel deployed in the Delhi Police Cyber Crime Unit, only five had technical qualification and 35 personnel had general proficiency in computers.22 The Committee recommended the Ministry to coordinate with states to set up cybercrime cells in every district.  Further, it recommended that the cybercrime cells should set up separate cells to monitor different kinds of cybercrimes, such as social media crime and dark web monitoring cells.  

## Increase In Narcotics Trafficking

There has been an increase in the narcotics trafficking and illegal substance abuse in the country.36,11  India is vulnerable as a transit point for drug trafficking due to its geographical location, between the Golden Crescent and Golden Triangle.37 The Golden Crescent (Afghanistan-Pakistan-Iran) and Golden Triangle (Thailand-Laos-Myanmar) are major opium producing regions of the world. According to the Ministry of Social Justice and Empowerment, the consumption of drugs has increased from 2004 to 2019.38  The United Nations Office on Drug and Crime (UNODC) World Drug Report 2022, ranked India in the top five countries for the quantity of cannabis, opium, heroine, and morphine seized.39  The Standing Committee on Home Affairs (2022) noted that along with arresting the people for drug consumption; it would important to also break the supply chain network of drugs.  It recommended that the NCB coordinate with state NCBs and other concerned agencies to counter the growing problem of drug trafficking, particularly from across the borders.11 As of January 2021, there were 66 special police stations for narcotics and drug control.6  Bordering states such as Punjab and West Bengal do not have a special police station for narcotics and drug control. In 2023-24, five crore rupees had been allocated to the Narcotics Control Bureau under the Centrally Sponsored Schemes.   

## Disaster Management

The Ministry of Home Affairs is the nodal ministry for handling all types of disasters other than drought (which is handled by the Ministry of Agriculture).40  Disaster management includes capacity building, mitigation, and response to natural calamities and man-made disasters. Currently, the central and state governments share costs for disaster management initiatives.  The cost-sharing pattern between centre and states is: (i) 90:10 for northeastern and Himalayan states, and (ii) 75:25 for all other states.  In 2021, the 15th Finance Commission recommended retaining this pattern.23 

| %              | Department   |
|----------------|--------------|
|                |              |
| 2021-22        |              |
| Actuals        |              |
| 2022-          |              |
| 23 RE          |              |
| 2023-          |              |
| 24 BE          | Change       |
| (BE            |              |
| 2023-24/       |              |
| RE             |              |
| 2022-23)       |              |
| 1,305          | 1,419        |
| National       |              |
| Disaster       |              |
| Response       |              |
| Force          |              |
| 170            | 166          |
| National       |              |
| Cyclone Risk   |              |
| Mitigation     |              |
| Project        |              |
| 128            | 92           |
| Disaster       |              |
| management     |              |
| infrastructure |              |
| Other          |              |
| schemes        |              |
| 238            | 106          |
| Total          | 1,841        |

Note: BE - Budget Estimates, RE - Revised Estimates. Source: Union Budget 2023-24; PRS. 

## National Disaster Response Force

The National Disaster Response Force (NDRF) is a specialised force responsible for disaster response and relief.  For 2023-24, NDRF has been allocated Rs 1,601 crore, which is 13% higher than the revised estimates for 2022-23. As on January 2021, the sanctioned strength of the NDRF is 18,555 personnel, with a vacancy rate of 34%.6  The Standing Committee on Home Affairs (2018) noted that there was a standard operating procedure for deployment of the National Disaster Response Force during a disaster, according to which states can requisition for forces.  However, states may be unable to make optimal assessment of the requirements, which could lead to competing demands for mobilisation of forces in disasterstricken areas.   

## National Cyclone Risk Mitigation Project

The National Cyclone Risk Mitigation Project (NCRMP) was launched by the Ministry of Home Affairs with the aim of minimising vulnerability in states/UTs that are prone to cyclone hazards.  Key objectives of the project include: (i) improving early warning dissemination systems, and (ii) construction and maintenance of cyclone shelters.41 The Ministry of Earth Sciences stated that there was a decrease in the frequency of cyclonic storms in the Bay of Bengal and an increasing trend in the Arabian Sea.42  However, coastal vulnerability continues over the Bay of Bengal region with about 60 to 80% of cyclones causing loss of life and property.42 For 2023-24, a budgetary allocation of Rs 110 crore has been made towards this project.  This is a 34% decrease from the revised estimates for 2022-23.  The decrease of funds from the NCRMP does not factor in the overall rise of cyclone and coastal vulnerability in India.  

## National Disaster Response Fund

Section 44 of the Disaster Management Act, 2005 mandates the creation of a National Disaster Response Fund and State Disaster Response Funds.43 The central government supplements the efforts of state governments by providing logistic and financial support in case of natural disasters of severe nature.44 Allocations to the National Disaster Response Fund are made by the Ministry of Finance, though it is administratively controlled by the Ministry of Home Affairs.  The National Disaster Response Fund is financed through the National Calamity Contingency Duty (NCCD) imposed on specified goods under central excise and customs.45  For the year 2023-24, a budgetary allocation of Rs 8,780 crore has been made to the fund.  

| %        | Department   |
|----------|--------------|
|          |              |
| 2021-22  |              |
| Actuals  |              |
| 2022-23  |              |
| Revised  |              |
| 2023-24  |              |
| Budget   | Change       |
| (BE      |              |
| 2023-24/ |              |
| RE 2022- |              |
| 23)      |              |
| 6,130    | 8,000        |
| Disaster |              |
| Response |              |
| Fund     |              |

Note: Allocation to the National Disaster Response Fund is made by the Ministry of Finance. BE - Budget Estimates, RE - Revised Estimates. Source: Union Budget 2023-24; PRS. 

The 15th Finance Commission has recommended that the allocation for the National Disaster Risk Management Fund (NDRMF) be Rs 68,463 for the duration of 2021-26.23  The National Disaster Response Fund would get 80% of the total allocation of the NDRMF.  Further, central assistance to states should be provided on a graded cost-sharing pattern. States must contribute: (i) 10% of assistance for grants of up to Rs 250 crore, (ii) 20% of assistance for grants of Rs 250-500 crore, and (iii) 25% of assistance for grants of over Rs 500 crore.  The 15th Finance Commission also recommended replacing the existing system of damages caused by natural calamities with a two-stage assessment.  The twostage assessment would assess: (i) initial humanitarian need for response and relief assessment, and (ii) a post-disaster needs assessment (PDNA) for recovery and rehabilitation. There is a large gap between the relief/amount sought by state government from the National Disaster Response Fund and the amount allocated to them.46 In all years between 2018-19 and 2020-21, the amount approved from the National Disaster Response Fund accounted for less than half of the amount sought by states.  In 2020-21, the amount approved made up for 17% of the amount sought (see Figure 8).  

## Evolving Demands Of Climate Change

The Intergovernmental Panel on Climate Change (2022) identified India as one of the most vulnerable countries to climate change.47  There has been an increase in the observed natural disasters like cyclones and floods.48  Further, about 89% of India's land mass is prone to earthquakes of different intensities.49  The impact of climate change and various kinds of natural disasters are expected to continue as a challenge for India in the future.  The 15th Finance Commission noted that India has experienced a large-scale of different climate disasters from floods in Uttarakhand and Bihar to cyclones in Odisha and Bengal.23  Therefore, the question of fund allocation needs to be addressed considering the changing demands of states. The Standing Committee on Finance (2019) noted the wide gap between the funds sought by affected states and those released by the central government.50 The Committee recommended an annual increase of 15% in the total corpus of SRDF, for the period 2020-25.  The 15th Finance Commission replaced the expenditure-drive methodology for allocation of funds to states to address the disparity in allocations. The new methodology assesses a combination of: (i) capacity (expenditure), (ii) risk exposure (area and population), (iii) and hazard and vulnerability (risk index).  For the year 2023-24, there has been a 10% increase in the budgetary allocation for National Disaster Response Fund from the revised estimates of 
2022-23 (**Table** 10).  However, the percentage of funds released from the National Disaster Response Fund may not adequately address the rapidly changing climate challenges that face the country.  

## Grants To Uts

For 2023-24, Rs 61,118 crore has been allocated towards grants and loans for the administration of UTs.  This is a decrease of 11% from the revised estimates for 2022-23 (Rs 69,040 crore).  Of the total allocation, the highest share is for the UTs of Jammu and Kashmir (58%), and Ladakh (10%).  These two UTs were formed after the reorganisation of the former state of Jammu and Kashmir in 2019. Allocation towards each of the UTs is shown below.  

| Union        | 2021-   | 2023-   | %      |
|--------------|---------|---------|--------|
| Territory    | 22      |         |        |
|              | 2022-   |         |        |
| 23 RE        |         |         |        |
| Actuals      |         |         |        |
| 24           |         |         |        |
| BE           |         |         |        |
| Change       |         |         |        |
| (RE 22-      |         |         |        |
| 23 to        |         |         |        |
| BE 23-       |         |         |        |
| 24)          |         |         |        |
| Ladakh       | 5,060   |         | 5,958  |
| Jammu and    |         |         |        |
| Kashmir      |         |         |        |
| 34,746       |         | 44,538  | 35,581 |
| Andaman      |         |         |        |
| and Nicobar  |         |         |        |
| 5,718        |         | 5,508   | 5,987  |
| Chandigarh   | 4,433   |         | 5,131  |
| 2,375        |         | 2,475   | 2,475  |
| Dadra and    |         |         |        |
| Nagar Haveli |         |         |        |
| & Daman and  |         |         |        |
| Diu          |         |         |        |
| Puducherry   | 1,880   |         | 3,130  |
| Lakshadweep  | 1,248   |         | 1,322  |
| Delhi        | 1,029   |         | 977    |
| Total        | 56,490  |         |        |

Note: BE - Budget Estimates, RE - Revised Estimates. Source: Union Budget 2023-24; PRS. 

## Census

In 2023-24, the Census, Survey, and Statistics Registrar of India was allocated Rs 1,565 crore.  This 
2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R eportFile/15/143/231_2021_3_11.pdf. 4 "Central Armed Police Forces (CAPFs), Indian Police, Ministry of Home Affairs, as accessed on February 12, 2023, https://police.gov.in/poi-internal-pages/central-armed-policeforces-capfs.   
is an increase of 180% over the revised estimates of 2022-23 (Rs 553 crore). As of February 2023, the 16th Census of India has not taken place.  In December 2022, the government stated that the reason for the postponement of the Census 2021 was the outbreak of the COVID-19 pandemic.51 Since the Census of 1881, censuses have been undertaken without interruption once every decade.52 Several schemes and determining eligibility of beneficiaries depends on Census data.  For instance, the National Food Security Act, 2013 determines the number of eligible beneficiaries based on the latest census figures.  These figures have not been updated since 2011 and may be leading to the exclusion of potential beneficiaries.53 Further, Article 82 of the Constitution provides for the delimitation of Lok Sabha constituencies.54 Currently, the number of seats for each state is based on the Census of 1971 and will be readjusted next based on the first census after 2026.  If the census is not published till 2026, then this census will be the basis of readjustment.   

 
2021-22 
Actuals 
2022-23 
RE 
2023-24 
BE 
% Change (BE 2023- 24/ RE 2022-
23) 
Census 
505 
553 
1,565 
183% 
Note: BE - Budget Estimates, RE - Revised Estimates.   
Source: Union Budget 2023-24; PRS. 

https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R eportFile/15/107/214_2019_11_11.pdf. Affairs, August 02, 2022, https://pqars.nic.in/annex/257/AU1968.pdf. 10 Unstarred Question No. 689, Rajya Sabha, Ministry of Home Affairs, February 08, 2023, https://pqars.nic.in/annex/259/AU689.pdf. 11 Report No. 238: 'Demands for Grants (2022-23), Ministry of Home Affairs' , Standing Committee on Home Affairs, Rajya Sabha, March 14, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R eportFile/15/161/238_2022_3_17.pdf. 12 Report No. 240, 'Action Taken by Government on the Recommendations/Observations Contained in the Two Hundred Thirty Eight Report on Demands for Grants (2022-23), Ministry of Home Affairs', Standing Committee on Home Affairs, Rajya Sabha, December 13, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R eportFile/15/169/240_2023_1_12.pdf.   
 
13 Annual Report 2021-22, Ministry of Home Affairs, 2022, https://www.mha.gov.in/sites/default/files/AnnualReport202122_2 4112022%5B1%5D.pdf.   
14 Unstarred Question No. 2437, Rajya Sabha, Ministry of Home Affairs, March 17, 2023, https://pqars.nic.in/annex/253/AU2437.pdf. 15 Unstarred Question No. 1476, Lok Sabha, Ministry of Home Affairs, July 26, 2022, https://pqals.nic.in/annex/179/AU1476.pdf. 16 Unstarred Question No. 858, Rajya Sabha, Ministry of Home Affairs, February 09, 2022, https://pqars.nic.in/annex/256/AU858.pdf. 17 Report No. 230: 'Atrocities and Crimes against Women and Children', Standing Committee on Home Affairs, Rajya Sabha, March 15, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R eportFile/15/143/230_2021_3_12.pdf. 18 Unstarred Question No. 3180, Lok Sabha, Ministry of Home Affairs, March 22, 2022, https://pqals.nic.in/annex/178/AU3180.pdf. 19 Unstarred Question No. 3180, Lok Sabha, Ministry of Home Affairs, March 22, 2022, https://pqals.nic.in/annex/178/AU3180.pdf. 20 Data on Police Organisation, Bureau of Police Research and Development, Ministry of Home Affairs, 2021, https://bprd.nic.in/WriteReadData/News/DoPO-21f%20%20.pdf. 21 "History of Delhi Police", Delhi Police, Ministry of Home Affairs, as accessed on February 19, 2023, https://delhipolice.gov.in/history. 22 Audit Report No.15 of 2020, 'Performance Audit of Manpower and Logistical Management in Delhi Police', 2020, https://cag.gov.in/uploads/download_audit_report/2020/Report%2 0No.%2015%20of%202020_English_Police- 05f809de4527eb8.68338874.pdf. 23 Report for the year 2020-21, 15th Finance Commission of India, November 2019, https://fincomindia.nic.in/ShowContent.aspx?uid1=3&uid2=0&uid 3=0&uid4=0. 24 "Detailed Demand for Grants 2022-23 Volume I, Ministry of Home Affairs, https://www.mha.gov.in/sites/default/files/2023- 02/DDGVol1_09022023.pdf. 25 Report of the Review Committee on the Recommendations of National Police Commission and Other Commissions/Committees on Police Reforms, Ministry of Home Affairs, March 2005, https://www.mha.gov.in/sites/default/files/Musaharicommittee_08 042019.pdf. 26 State List, List II, Seventh Schedule, The Constitution of India, https://www.mea.gov.in/Images/pdf1/S7.pdf. 27 Report No.237, 'Police Training, Modernisation, and Reforms', Standing Committee on Home Affairs, Rajya Sabha, February 10, 2022, https://loksabhadocs.nic.in/lsscommittee/Finance/16_Finance_71.p df. 28 "Government of India under leadership of Prime Minister, Shri 
33 Report No. 316: 'Issues Related to Safety of Women', Standing Committee on Education, Women, Children, Youth, and Sports, Rajya Sabha, March, 19 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/R
eportFile/16/144/316_2021_4_15.pdf.  
34 Unstarred Question No. 2686, Rajya Sabha, Ministry of Home Affairs, August 10, 2016, https://www.mha.gov.in/MHA1/Par2017/pdfs/par2016-pdfs/rs- 100816/2686%20E.pdf. 35 Volume II: Crimes in India 2021, National Crime Records Bureau, Ministry of Home Affairs, 2021, https://ncrb.gov.in/sites/default/files/CII-
2021/CII_2021Volume%202.pdf.   
36 Unstarred Question No. 459, Lok Sabha, Ministry of Home Affairs, July 20, 2021, https://www.mha.gov.in/MHA1/Par2017/pdfs/par2021-pdfs/LS- 20072021/459.pdf. 37 Unstarred Question No. 3478, Lok Sabha, Ministry of Home Affairs, Lok Sabha, August 08, 2021, https://loksabha.nic.in/Members/QResult16.aspx?qref=56841. 38 Unstarred Question No. 693, Rajya Sabha, Ministry of Home Affairs, February 08, 2023, https://pqars.nic.in/annex/259/AU693.pdf. 39 Booklet No. 3, UNODC World Drug Report, 2022, United Nations Office on Drugs and Crimes, 2022, https://www.unodc.org/res/wdr2022/MS/WDR22_Booklet_3.pdf. 40 Report of the Fourteenth Finance Commission, 2014, https://fincomindia.nic.in/writereaddata/html_en_files/oldcommiss ion_html/fincom14/others/14thFCReport.pdf. 41 Aims and Objectives, National Cyclone Risk Mitigation Project (NCRMP), last accessed on February 13, 2022, https://ncrmp.gov.in/aims-objectives/ 42 Unstarred Question No. 2880, Lok Sabha, Ministry of Earth Sciences, March 12, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU2880.pdf. 43 The Disaster Management Act, 2005, https://ndma.gov.in/sites/default/files/PDF/DM_act2005.pdf. 44 Unstarred Question No. 153, Rajya Sabha, Ministry of Home Affairs, December 21, 2022, https://pqars.nic.in/annex/258/AS153.pdf. 45 Report No. 71: 'Central Assistance for Disaster Management and Relief', Standing Committee on Finance, Lok Sabha, http://164.100.47.193/lsscommittee/Finance/16_Finance_71.pdf.    
46 Unstarred Question No. 1986, Rajya Sabha, Ministry of Home Affairs, December 15, 2021, https://pqars.nic.in/annex/255/AU1986.pdf. 47 Climate Change 2022: Impacts, Adaption, and Vulnerability, Intergovernmental Panel on Climate Change, 2022, https://report.ipcc.ch/ar6/wg2/IPCC_AR6_WGII_FullReport.pdf. 48 Unstarred Question No. 2115, Rajya Sabha, Ministry of Earth Sciences, December 16, 2021, https://moes.gov.in/sites/default/files/RS_English_2115.pdf.   
49 Unstarred Question No. 28, Rajya Sabha, Ministry of Earth Sciences, February 02, 2023, https://moes.gov.in/sites/default/files/RS-in-English-28-02-02- 2023.pdf. Relief', Standing Committee on Finance, Lok Sabha, February 13, 2019, https://loksabhadocs.nic.in/lsscommittee/Finance/16_Finance_71.p df.   
 

## Annexure: Home Affairs

|              |         |         |         |         |         |         |         |         | Table 13: Expenditure on the Central Armed Police Forces in the last ten years (in Rs crore)   |         |
|--------------|---------|---------|---------|---------|---------|---------|---------|---------|------------------------------------------------------------------------------------------------|---------|
| Department   | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23                                                                                        | 2023-24 |
| CRPF         | 12,747  | 14,327  | 16,804  | 18,560  | 21,974  | 25,133  | 24,410  | 27,307  | 29,325                                                                                         | 31,772  |
| BSF          | 11,687  | 12,996  | 14,909  | 16,019  | 18,652  | 20,254  | 19,322  | 21,491  | 22,718                                                                                         | 24,771  |
| CISF         | 4,955   | 5,662   | 6,563   | 7,614   | 9,115   | 10,421  | 11,218  | 11,373  | 12,202                                                                                         | 13215   |
| SSB          | 3,148   | 3,418   | 4,045   | 4,641   | 5,420   | 6,382   | 6,017   | 6,940   | 7,654                                                                                          | 8,329   |
| ITBP         | 3,399   | 3,773   | 4,641   | 5,078   | 5,699   | 6,625   | 6,143   | 6,965   | 7,461                                                                                          | 8,097   |
| AR           | 3,450   | 3,848   | 4,724   | 5,031   | 5,694   | 5,632   | 5,499   | 6,046   | 6,658                                                                                          | 7,052   |
| NSG          | 527     | 569     | 697     | 968     | 1,007   | 1,114   | 930     | 1,151   | 1,293                                                                                          | 1,287   |
| Departmenta  |         |         |         |         |         |         |         |         |                                                                                                |         |
| l Accounting |         |         |         |         |         |         |         |         |                                                                                                |         |
| 74           | 78      | 92      | 95      | 110     | 111     | 112     | 122     | 132     | 142                                                                                            |         |
| Total        |         | 39,988  |         | 44,669  | 52,474  |         | 58,007  |         | 67,670                                                                                         |         |

Note: Revised Estimates used for 2021-22, and Budget Estimates used for 2023-24; actuals used for all other years. CRPF - Central Reserve Police Force; BSF - Border Security Force; CISF - Central Industrial Security Force; AR - Assam Rifles; ITBP - Indo- Tibetan Police Force; SSB - Sashastra Seema Bal; NSG - National Security Guard. Source: Union Budgets 2015-16 to 2023-24; PRS. 

| Year        | Sanctioned         | Vacancies           |
|-------------|--------------------|---------------------|
| strength    |                    |                     |
| Actual      |                    |                     |
| strength    | (in %)             |                     |
| State       | Releases from NDRF | % of total releases |
| 2013        | 9.1                | 8.3                 |
| Gujarat     | 1,000              | 28%                 |
| 2014        | 9.3                | 8.7                 |
| Jharkhand   | 200                | 6%                  |
| 2015        | 9.5                | 8.9                 |
| Karnataka   | 629                | 18%                 |
| 2016        | 9.7                | 9.0                 |
| Maharashtra | 701                | 20%                 |
| 2017        | 10.8               | 9.2                 |
| Odisha      | 500                | 14%                 |
| 2018        | 9.9                | 9.3                 |
| Tamil Nadu  | 214                | 6%                  |
| 2019        | 10.1               | 9.2                 |
| West Bengal | 300                | 8%                  |
| 2020        | 10.2               | 9.1                 |
| Total       | 3,544              |                     |
| 2021        | 10.2               | 9.0                 |

Source: Unstarred Question No. 2668, Lok Sabha, December 14, 2021; 
PRS. 

Note: Figures for each year are as of January 1 of that year. 

Source: Bureau of Police Research and Development; PRS. 

Note: Revised Estimates used for 2022-23.   
  
 Source: Union Budgets 2017-18 to 2023-24; PRS

## Demand For Grants 2023-24 Analysis Rural Development

The Ministry of Rural Development aims to improve the quality of life in rural India and acts as the nodal agency for most development and welfare activities in rural areas of the country.1  The Ministry comprises of two Departments, the Department of Rural Development and the Department of Land Resources. The Department of Rural Development aims to enhance livelihood opportunities, provide social assistance to vulnerable sections, and develop infrastructure for rural growth.1  The Department of Land Resources aims to ensure sustainable development of rainfed cultivable and degraded lands, and optimise the use of land resources in the country.2 This note looks at the proposed expenditure for the Ministry of Rural Development for 2023-24, financial trends, and related issues with the Ministry's schemes and programmes.   

## Union Budget Highlights 2023-24

In 2023-24, the Ministry of Rural Development has been allocated Rs 1,59,964 crore in 2023-24.3,4  The Department of Rural Development has been allocated Rs 1,57,545 crore, 13% less than the revised estimates of 2022-23.  The Department of Land Resources has been allocated Rs 2,419 crore, which is a 92% increase over the revised estimates of 2022-23.  

Rural Development (in Rs crore) 
% 
Department 
21-22 
Actuals 
22-23 
RE 
23-24 
BE 
Change* 
Rural Development 
1,60,433 
1,81,122 
1,57,545 
-13% 
Land Resources 
1,210 
1,260 
2,419 
92% 
Total 
1,61,643 
1,82,382 
1,59,964 
-12% 

Note: BE is budget estimate and RE is revised estimate. *% change is change in 2023-24 BE over 2022-23 RE. Sources: Demands for Grants of the Ministry of Rural Development 2023-24; PRS.  

## Policy Announcements In The Budget Speech 2023-24

- 
Rural women organised into self-help groups (SHGs) will be empowered through the formation of large producer collectives.  They will be provided raw materials and support to scale up operations.5    
- 
Outlay on the Pradhan Mantri Awas Yojana (rural and urban components taken together) increased by 66% to Rs 79,590 crore. 

## Department Of Rural Development Overview Of Finances

The Department of Rural Development implements programmes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY), and Pradhan Mantri Awas Yojana-Gramin (PMAY-G).  
Between 2013-14 and 2023-24, budgetary allocation to the Department has grown at an average annual rate of 
8%.  In 2020-21, allocation to the Ministry was increased significantly to provide more financial support during to the COVID-19 pandemic.  This increased allocation was largely towards MGNREGS and welfare schemes, such as the direct benefit transfer to women account holders under Pradhan Mantri Jan Dhan Yojana.6   
Note: BE is budget estimate; actual figure for 2022-23 is revised estimate.  Source: Demands for Grants of the Ministry of Rural Development for various years; PRS. 

Since 2015-16, actual expenditure for this Department has been higher than the budget estimates except in the year 2018-19.  Since 2020-21, the actual expenditure has been more than 20% higher than the budget estimates.  This is mainly due to expenditure on MGNREGS, which is a demand-based scheme. 

Source: Demands for Grants of the Ministry of Rural Development for various years; PRS. 

## Major Schemes Under The Department

In 2023-24, MGNREGS (38%) and PMAY-G (35%) together account for almost 75% of the budgetary allocation.  This is followed by PMGSY (12%), National Rural Livelihood Mission (NRLM, 9%), and the National Social Assistance Programme (NSAP, 6%). Allocation to the MGNREGS has declined by 33% as compared to the revised estimates of 2022-23.  For most other schemes, barring PMAY-G and NRLM, allocations remain constant when compared with the revised estimates of 2022-23.  The Shyama Prasad Mukherjee Rurban Mission (SPMRM), which was set to end in March 2022, has not been allocated any funds in this financial year.7 

% Change 
from 22-23 RE 
Scheme 
21-22 
Actuals 
22-23 
RE 
23-24 
BE 
to 23-24 BE 
MGNREGS 
98,468 
89,400 
60,000 
-33% 
PMAY-G 
30,057 
48,422 
54,487 
13% 
PMGSY 
13,992 
19,000 
19,000 
0% 
NRLM  
9,383 
13,336 
14,129 
6% 
NSAP 
8,152 
9,652 
9,636 
0% 
SPMRM 
150 
989 
0 
- 
CSS 
205 
126 
113 
-10% 

Note: CSS - Central Sector Schemes.  Source: Demands for Grants of the Department of Rural Development, 2023-24; PRS. 

## Key Issues And Analysis Mahatma Gandhi National Rural Employment Guarantee Scheme

The National Rural Employment Guarantee Act, 2005 
provides for the enhancement of livelihood security of rural households by providing at least 100 days of guaranteed work to every household every year.8  The provisions of the Act are operationalised through the MGNREGS.9  The scheme covers the entire country, except for those districts with 100% urban population. Works permitted under the scheme are related to watershed development, water conservation, agriculture, rural sanitation, flood management, etc.10 

## Reduction In Budgetary Allocation; Demand For Work Expected To Decrease

Rs 60,000 crore has been allocated for MGNREGS in 2023-24.3  This is 33% lower than the revised estimates of 2022-23.  However, actual expenditure on the scheme being higher than what was budgeted has been a consistent trend since 2015 (**Figure 4**).  Despite this, in successive years, the budget estimates have been lower than the revised estimates of the previous year. The decline in allocation in 2023-24 could be indicative of the expectation that the pandemic induced job demand might have eased off.  The Ministry of Rural Development has clarified that additional funds will be 
 
 
released for wage and material payments under the scheme whenever it is required.11  

| Year          | BE     | Actual    |
|---------------|--------|-----------|
| % increase of |        |           |
| actual over   |        |           |
| BE            |        |           |
| 2015-16       | 33,713 | 37,341    |
| 2016-17       | 38,500 | 48,215    |
| 2017-18       | 48,000 | 55,166    |
| 2018-19       | 55,000 | 61,815    |
| 2019-20       | 60,000 | 71,687    |
| 2020-21       | 61,500 | 1,11,170  |
| 2021-22       | 73,000 | 98,468    |
| 2022-23       | 73,000 | 89,400    |
| 2023-24       | 60,000 | -         |

Note: BE is budget estimate; actual figure for 2022-23 is the revised estimate.  Source: Demands for Grants of the Department of Rural Development for various years; PRS.   
MGNREGS is a demand-driven scheme.  Demand is higher during the summers and lower during harvests 
(**Figure 5**).  Between 2018-19 and 2019-20, the demand for work remained largely the same, and peaked in 2020-21.  The 15th Finance Commission noted that the slowdown in primary sectors, trade, and aggregate demand during the COVID-19 pandemic period severely hit rural economies.12  This was reflected in the increased demand for work under the scheme during the pandemic.  Since then, demand for work has decreased.  Between July and December 2022, demand reached pre-pandemic levels.  The Economic Survey 2022 noted that monthly year-onyear demand for work decreased in 2021-22 and 2022- 23.13  It also noted that the decrease in demand for work was due to normalisation of the rural economy as a result of resurgence of agriculture. As of February 20, 2023, 6.66 crore households have demanded employment under the scheme in 2022-23.14 Of this, employment has been offered to 6.65 crore households (99.8% of households that demanded employment), and 5.87 crore households have availed employment (88% of households that demanded employment).  8.25 crore persons have availed of employment under the scheme.   

  

Despite the statutory guarantee of 100 days of wage employment, not all households avail work for 100 days.  Over the last five years, the number of days of employment per household has averaged around 51 days.15  During the same time, the proportion of households that completed 100 days of wage employment has not crossed 10%.   

## Aadhar Based Payment System Now Mandatory

Under MGNREGS, payments to workers are directly credited to their bank accounts.16  This could be through bank/Post Office account details, or using the beneficiary's Aadhar number.  To avail of the Aadhar Based Payment System (ABPS), Aadhaar cards have to be linked to the beneficiary's bank account and NREGS job card.  After linking, the card is authenticated.  Only those beneficiaries who are successfully authenticated are eligible for ABPS.  The Ministry of Rural Development also decided that all payments to NREGS beneficiaries would be made through ABPS from February 1, 2023.  However, as of February 20, 2023, only 44% of total workers are eligible for ABPS.17 Around 5 crore workers have not been successfully authenticated.  If all future payments are made only through the ABPS, a large number of workers would need to be authenticated to ensure that they get paid. 

## Pradhan Mantri Awas Yojana - Gramin

PMAY-G was launched in 2016 with the aim of providing 'Housing for All' by 2022.  The scheme has been extended till 2024.18  As of February 20, 2023, 
2.15 crore houses have been constructed, against a target of 2.94 crore houses.  **Table 4** shows the house completion target and achievement for each financial year from 2016-17.  However, a CAG audit (2020) of the scheme showed that 31% (183 houses out of 590 audited houses) were not being used for residential purposes.19   

## Table 4: Houses Constructed Under Pmay-G (In Lakhs)

 
Year 
Target 
Achievement 
% 
Completed 
2016-17 
42.2 
32.1 
76% 
2017-18 
31.5 
44.5 
142% 
Phase I 
2018-19 
25.1 
47.3 
188% 
2019-20 
57.9 
21.9 
38% 
2020-21 
43.1 
35.3 
82% 
Phase II 
2021-22 
71.4 
43.8 
61% 
 
2022-23 
22.8 
34.8 
153% 

Source: PMAY-G Dashboard, accessed on February 20, 2023; PRS. 

## Disparity In Completion Rate Across States

The average time taken to complete one house is 282 days.20  This figure varies across states, from 163 days in Arunachal Pradesh to 771 days in Lakshadweep.  In nine states, the average completion time is greater than a year.  Odisha has an average completion time of 269 days, one of the lowest among states.20  The state government is providing an incentive of Rs 20,000 to beneficiaries who complete construction within four months from the release of the first instalment, and Rs 10,000 to those who complete construction within six months.21  The Standing Committee (2022) recommended that states take similar measures to reduce completion time, and hence achieve the targets set for each year.21  

## Poor Uptake Of Loan Scheme

Under PMAY-G, beneficiaries can avail of a home loan from financial institutions for up to Rs 70,000, with an interest subsidy of 3%.  However, the loan uptake has been low, as noted by the Standing Committee on Rural Development (2021).22  Beneficiaries of PMAY-G are scattered across remote rural areas.  Banking services are difficult to access in these areas, as there may be fewer bank branches.  Accessing formal credit through banks and other financial institutions would require some collateral security.  However, target beneficiaries under the scheme are those who do not have pucca houses.  It is unlikely that they would have significant assets which could be pledged as collateral.  Nonbanking finance companies and housing finance companies also charge higher interest rates on loans. The Committee (2023) urged the Ministry to launch an attractive loan product with minimum collateral and low interest rates.21   

## Pradhan Mantri Gram Sadak Yojana

Rural road networks facilitate the growth of rural market centres and rural hubs.12  PMGSY, launched in December 2000, aims to provide all-weather connectivity to eligible rural habitations.23  Upgradation of existing rural roads in districts where all eligible roads have all-weather connectivity is also covered under the scheme.  The scheme has been allocated Rs 19,000 crore in 2023-24, which is the same as the budget allocation and revised estimate for 2022-23. While the budget allocation has remained around Rs 19,000 crore since 2017-18, the actual expenditure has been lower (**Table 5**).   

Year 
Budget 
Estimate 
Actuals 
% Utilisation 
2016-17 
19,000 
       17,923 
94% 
2017-18 
19,000 
       16,862  
89% 
2018-19 
19,000 
       15,414  
81% 
2019-20 
19,000 
       14,017  
74% 
2020-21 
19,500 
       13,688  
70% 
2021-22 
15,000 
       13,992  
93% 
2022-23 
19,000 
19,000 
100% 
2023-24 
19,000 
- 
- 

Note: Actual figure for 2022-23 is revised estimate.  Source: Demands for Grants of the Department of Rural Development for various years; PRS. 

There are four verticals under PMGSY.24  Phase I targets habitats with population more than 250 people. Its tenure was extended till September 2022.  Phase II, launched in 2013, targets the upgrade of 50,000 km of roads, which form through routes and rural links.  Phase III, launched in 2019, aims to consolidate 1.2 lakh km of roadways through rural links.  This phase will end in March 2025.  The Road Connectivity Project for Left Wing Extremism Affected Areas (RCPLWEA) was launched as a separate vertical in 2016, and will be implemented till March 2023. PMGSY aimed to connect 1.64 lakh eligible habitations.25  As on February 17, 2023, 99% of rural habitations have been covered under PMGSY.  92% of sanctioned roads have also been completed.26 However, the CAG (2016) had noted that in several states, works were shown as completed without providing complete connectivity to habitations.27     

| Vertical    | Sanctioned    | Completed    |
|-------------|---------------|--------------|
| %           |               |              |
| Completed   |               |              |
| PMGSY-I     | 6,45,390      | 6,36,602     |
| PMGSY-II    | 49,873        | 48,896       |
| PMGSY-III   | 99,319        | 50,727       |
| RCPLWEA     | 12,100        | 6,944        |
| Total       | 8,06,681      | 7,43,168     |

Sources: PMGSY Dashboard as accessed on February 17, 2023; PRS.   
Issues in the tendering/contracting process The CAG (2016) and the Standing Committee on Rural Development (2021) have flagged several issues in the tendering and contracting process of roads built under PMGSY.27,28  The Standing Committee (2021) noted the issue of down-tendering in PMGSY.  Bidders quote up to 25-30% less than the minimum bid amount to win the tender.  To maximise profits, contractors may then construct roads that do not meet technical specifications or are of poor quality.  The CAG (2016) also noted that the execution of roads with lower specifications would affect their long-term sustainability.27  The Department responded that measures have been taken to prevent down-tendering.  If any inconsistencies are noticed with the bid of the successful bidder, they may be asked to produce a detailed price analysis.  Since state governments are responsible for the tendering process, they have also been encouraged to ask for performance guarantees, if the bid is below a certain threshold.29 As per the Standard Bidding Document for PMGSY, the contractor may subcontract part of the construction work (up to 25% of the contract price), and part or full maintenance work on the road.30  However, the contractor will be held responsible for all work undertaken on the project.  The Standing Committee noted that since sub-contractors are not held accountable for their work, they may not be concerned with the durability and quality of construction.28   

## Maintaining Quality Of Roads

Roads constructed under PMGSY are covered by fiveyear maintenance contracts.  During this time, contractors are responsible for road maintenance. Following this, state governments are responsible for their upkeep.12  Roads and bridges constructed under PMGSY are tested for quality while construction is in progress, post construction, and during the maintenance phase.  Between April 2022 and February 2023, 10% of completed road projects have been found to be of unsatisfactory quality.31  7% of ongoing projects and 18% of projects under maintenance were also found to be unsatisfactory. The Standing Committee (2022) noted that there were several lacunae in the monitoring mechanism set up to oversee maintenance of roads in the first five years.29 They pointed out that contractors resort to cosmetic patchwork before they hand over the assets to state governments.  They recommended that specific teams be formed, which would undertake periodic physical inspection of roads.29 The 15th Finance Commission noted that once state governments take over PMGSY roads, there are interstate disparities in the level of maintenance.12  The 15th Finance Commission recommended that such variations should be minimised.  This could be achieved by extending the maintenance clause beyond five years. Different states have also taken unique measures to improve road maintenance (Table 7: Models adopted by various states to improve road maintenance). 

| States                          |
|---------------------------------|
| Chhattisgarh,                   |
| Rajasthan                       |
| Zonal maintenance contracts are |
| signed with contractors         |
| SHGs made responsible for road  |
| maintenance                     |
| Uttar Pradesh,                  |
| Madhya Pradesh,                 |
| Uttarakhand                     |
| Madhya Pradesh,                 |
| Punjab, Rajasthan               |
| Mandi cess used for road        |
| maintenance                     |

Source: 15th Finance Commission Report, Vol III; PRS.    

## National Rural Livelihood Mission

The Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM) aims to reduce poverty by enabling poor households to access gainful employment, and by ensuring universal financial inclusion.32  The scheme involves social mobilisation through self-help groups (SHGs), promotion of SHG federations, creation of community funds, and access to credit and financial services. 29  The budgetary allocation to NRLM has increased at an average annual rate of 33% between 2013-14 and 2023-24.   

|         |      |       |      | Target    | Achievement    | % Achievement    |
|---------|------|-------|------|-----------|----------------|------------------|
| Year    | SHG  | DA    | SHG  | DA        | SHG            | DA               |
| 2017-18 | 20.7 | 31.0  | 27.5 | 62.2      | 133%           | 201%             |
| 2018-19 | 31.0 | 50.7  | 31.4 | 61.5      | 101%           | 121%             |
| 2019-20 | 30.9 | 67.1  | 34.2 | 70.9      | 111%           | 106%             |
| 2020-21 | 32.3 | 73.8  | 47.8 | 84.6      | 148%           | 115%             |
| 2021-22 | 37.3 | 97.2  | 42.9 | 120.3     | 115%           | 124%             |
| 2022-23 | 42.7 | 139.6 | 42.6 | 120.3     | 100%           | 86%              |

Note: DA is disbursed amount in Rs thousand crore.  Source: DAY- NRLM Bank-Linkage Dashboard, accessed on February 20, 2023; 
PRS.  

## National Social Assistance Programme

The National Social Assistance Programme was introduced in 1995, with the aim of supporting citizens who are destitute, aged, sick, or disabled.33  It comprises of five sub-schemes, (i) Indira Gandhi National Old Age Pension Scheme (IGNOAPS), (ii) 
Indira Gandhi National Widow Pension Scheme (IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme (IGNDPS), (iv) National Family Benefit Scheme, and the (v) Annapurna scheme.  The scheme extends across rural and urban areas, and is implemented by states.33  The 15th Finance Commission recommended that states coordinate with the Union Ministry of Finance to work out a minimum uniform standardised annual per capita amount to be spent on social security across the country.12 Rs 9,636 crore has been allocated to the NSAP in 2023- 24.  This includes Rs 6,634 crore for the old age pension scheme, Rs 659 crore for the National Family Benefit Scheme, Rs 2,027 for the widow pension scheme, Rs 290 crore for the disability pension scheme, and Rs 10 crore for the Annapurna scheme.3  

Year 
Budget 
Estimates 
Actuals 
% 
Utilisation 
2014-15 
       10,618  
          7,084  
67% 
2015-16 
          9,074  
          8,616  
95% 
2016-17 
          9,500  
          8,854  
93% 
2017-18 
          9,500  
          8,694  
92% 
2018-19 
          9,975  
          8,418  
84% 
2019-20 
          9,200  
          8,692  
94% 
2020-21 
          9,197  
       42,443  
461% 
2021-22 
          9,200  
          8,152  
89% 
2022-23 
          9,652  
          9,652  
100% 
2023-24 
          9,636  
- 
- 

Source: Demands for Grants of the Department of Rural Development for various years; PRS.  
Under IGNOAPS, senior citizens below the poverty line are entitled to a monthly pension of Rs 200 up to 79 years of age and Rs 500 thereafter.33  Despite NSAP being a 100% centrally sponsored scheme, states/UTs have added to the quantum of central assistance from their own resources.29  This ranges from Rs 50 to Rs 2,300.  The Standing Committee on Rural Development (2021) recommended that this amount be increased.28 In 2022, the Department of Rural Development stated that the final decision on increasing the central assistance is contingent on consultation with States.29  

## Overview Of Finances: Department Of Land Resources

The Department of Land Resources aims to ensure sustainable development of rainfed and degraded land, and implement a modern land record management system.34   

of Land Resources (in Rs crore) 
Major Head 
21-22 
Actual 
22-23 
RE 
23-24 
BE 
% change  
PMKSY- WDC 
941 
1,000 
2,200 
120% 
DILRMP 
250 
239 
196 
-18% 
Secretariat 
19 
21 
23 
13% 
Total 
1,210 
1,260 
2,419 
92% 

Note: BE is budget estimate, RE is revised estimate; % change refers to the % increase of 2023-24 BE over 2022-23 RE.  Source: Demands for Grants of the Department of Land Resources, 2023-24; PRS.  
In 2023-24, the Department of Land Resources has been allocated Rs 2,419 crore.4  This is a 92% increase over the revised estimates of 2022-23, mostly on account of a 120% increase in allocation to watershed development.  Between 2013-14 and 2023-24, budgetary allocation for the Department has decreased by an average annual rate of 8%.  Since 2013-14, actual spending by the Department of Land Resources has been less than the budget estimates for that year.  In 2013-14, actual expenditure was 57% less than the budget estimate.  Since 2020-21, actual expenditure has been at least 40% less than the budget estimate. 

The Standing Committee on Rural Development noted that the reduction in the budgetary allocation to the Department at the revised estimate stage reflects faulty budgetary planning.35  This has had a cascading impact, leading to a reduced level of expenditure under the schemes implemented by the Department.  Funds are transferred from the Centre to States/UTs after the submission of release proposals by States/UTs. Incomplete or delayed proposals lead to lower release of Central funds.  They recommended that measures be taken to improve collaboration between the Centre and States/UTs to address these issues.36  
Major schemes under the Department The department implements two major schemes, (i) the Digital India Land Records Modernisation Programme (DILRMP), and (ii) Pradhan Mantri Krishi Sinchai Yojana - Watershed Development Component 
(PMKSY - WDC).2 The Integrated Watershed Management Programme has the objective of improving the productive potential of rainfed/degraded land, and improving the efficiency of watershed projects.37  It was amalgamated into the Krishi Sinchai Yojana (Watershed Development Component) in 2015-16.  Projects taken up under this scheme include ridge area treatment, drainage line treatment, soil and moisture conservation, rain-water harvesting, and pasture development.  

## Key Issues And Analysis Unspent Balances

The Standing Committee on Rural Development (2022) noted high unspent balances under the PMKSY-WDC scheme.35  The COVID-19 pandemic, heavy rains, and delayed transfer of Central funds to State Level Nodal Agencies are cited as reasons for such high unspent balance.35,36  The Committee also noted that States/UTs are slow in the implementation of projects.  This has led to the accumulation of unspent balances, and the surrendering of funds without utilisation.  The Committee recommended that the implementation of the scheme be monitored more consistently.  Similar unspent balances have also been noted in the DILRMP.   

| Year    | PMKSY-WDC    | DILRMP    |
|---------|--------------|-----------|
| 2019-20 | 2255         | 399       |
| 2020-21 | 1833         | 493       |
| 2021-22 | 1325*        | 537**     |

*Till December 31, 2021; **Till January 5, 2022 Source: Report 23, Standing Committee on Rural Development; PRS. 

Pradhan Mantri Krishi Sinchai Yojana - Watershed Development Component Expenditure on PMKSY-WDC is estimated to be Rs 
2,200 crore in 2023-24, a 120% increase over the revised estimate of 2022-23.  Since 2015-16, allocation to the scheme has grown at an average rate of 4%. However, fund utilisation has declined during this time. In 2015-16 and 2016-17, actual expenditure was between 97%-99% of the budget estimate.  However, this declined to 47% in 2021-22.  In 2022-23, it is expected to be 50% of the budget estimate.  
  
Note: % Utilisation is mapped to the right axis; 'Actual' figure for 
2022-23 is the revised estimate.  Source: Demands for grants of the Department of Land Resources for various years; PRS. 

## Incomplete Projects Under Pmksy-Wdc 1.0

PMKSY-WDC has been implemented in two phases.35 PMKSY-WDC 1.0 functioned from 2009-10 to 2014- 15, and PMKSY-WDC 2.0 is expected to function from 2021-22 to 2025-26.  As of July 2022, 5,693 projects have been completed out of 6,382 projects sanctioned under PMKSY-WDC 1.0 (89%).38  The Standing Committee on Rural Development (2022) noted that projects under PMKSY-WDC 1.0 remained incomplete even as the second phase of the scheme was launched. 35   

## Digital India Land Records Modernisation Programme

DILRMP has been allocated Rs 196 crore in 2023-24, which is an 18% decrease from the allocation for 2022- 23.  Apart from three years between 2017-18 to 2019- 20), fund utilisation has remained above 90%.  In 2021- 22, actual expenditure exceeded the budget estimates by Rs 100 crore.    

| Year    |   BE  | Actuals    | % Utilisation    |
|---------|-------|------------|------------------|
| 2016-17 |  150  | 139        | 92%              |
| 2017-18 |  150  | 93         | 62%              |
| 2018-19 |  250  | 68         | 27%              |
| 2019-20 |  150  | 44         | 29%              |
| 2020-21 |  239  | 225        | 94%              |
| 2021-22 |  150  | 250        | 167%             |
| 2022-23 |  239  | 239        | 100%             |
| 2023-24 |  196  | -          | -                |

Note: Actual figure for 2022-23 is the revised estimate.  Source: Demands for Grants of the Department of Land Resources for various years; PRS. 

## Dilrmp And Svamitva Scheme

SVAMITVA is a Central Sector Scheme implemented by the Ministry of Panchayati Raj.  It aims to provide 'Record of Rights' to village house owners.  Legal ownership rights will be issued after mapping land parcels using drone technology.39  An expert committee constituted by the Ministry of Panchayati Raj recommended that the Ministry work together with the Department of Land Resources on implementing the two schemes.40  Since the preparation of computerised land records falls under the ambit of DILRMP, funds for the preparation of record of rights should be provided under that scheme.  They also recommended that all villages surveyed under SVAMITVA be prioritised under the DILRMP.  

## Slow Progress Of Components

DILRMP has eight major components, including computerisation of land records; survey/resurvey; and updating of survey and settlement records, and computerisation of registration.41  The Standing Committee on Rural Development (2022) noted that the different components under the scheme showed differing levels of completion.35  The need for skilled manpower, delays by state governments, and lack of timely revision of rates in some components were cited as reasons for this.  They recommended that implementation be accelerated, after resolving issues with state/UT governments.35  

| Activity (Unit)        | Target    | Achievement    |
|------------------------|-----------|----------------|
| %                      |           |                |
| Achieved               |           |                |
| 6.57                   | 6.22      | 95%            |
| Land record            |           |                |
| computerisation        |           |                |
| (lakh revenue          |           |                |
| villages)              |           |                |
| 5,268                  | 4,910     | 93%            |
| Automation of sub-     |           |                |
| registrar offices      |           |                |
| (number of sub-        |           |                |
| registrar offices)     |           |                |
| 5,268                  | 3,993     | 76%            |
| Integration of land    |           |                |
| records                |           |                |
| (number of sub-        |           |                |
| registrar offices)     |           |                |
| 36                     | 29        | 81%            |
| States for which       |           |                |
| record of rights is on |           |                |
| the web                |           |                |
| 6.57                   | 0.90      | 14%            |
| Survey/re-survey       |           |                |
| (lakh revenue          |           |                |
| villages)              |           |                |
| 1.69                   | 1.27      | 75%            |
| Digitisation of        |           |                |
| cadastral maps         |           |                |
| (crore maps)           |           |                |
| 6,865                  | 3,186     | 46%            |
| Modern record          |           |                |
| rooms in tehsils       |           |                |
| (number of tehsils)    |           |                |
| Number of State Data   |           |                |
| Centres set up         |           |                |
| 36                     | 24        | 67%            |
| 6.57                   | 4.13      | 63%            |
| Textual and spatial    |           |                |
| data integration (lakh |           |                |
| revenue villages)      |           |                |

Source: DILRMP Dashboard, as of February 20, 2023; PRS.

 
11 "Clarification of the Union Rural Development Ministry on Budget Cut to MGNREGA", Press Information Bureau, Ministry of Rural Development, February 3, 2023, https://rural.nic.in/en/pressrelease/clarifications-union-rural-development-ministry-budget-cutmgnrega. 12 Finance Commission in Covid Times, Report for 2021-26, Vol III, 
15th Finance Commission, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/Rep orts/XVFC-Vol%20III-Union.pdf. 13 Social Infrastructure and Employment: Big Tent, Economic Survey 2022-23, Government of India, https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap 06.pdf. 14 Employment Generated during the year 2021-2022, MGNREGA dashboard, last accessed on February 20, 2023, https://mnregaweb4.nic.in/netnrega/citizen_html/demregister.aspx?lfl ag=eng&fin_year=2022- 2023&source=national&labels=labels&Digest=kODLAkQv8M9FT6
WbXb7zhA. 

15 Employment Generation Progress Reports of various years, MGNREGA Dashboard, accessed on February 2, 2023, https://mnregaweb4.nic.in/netnrega/MISreport4.aspx. 16 Mahatma Gandhi National Rural Employment Guarantee Act, 2005, Master Circular, Ministry of Rural Development, https://rural.nic.in/sites/default/files/nrega/Library/Books/Master_Cir cular_2018_19.pdf. 17 Aadhaar Authentication Status Report, MGNREGS Dashboard, accessed on February 17, 2023, https://mnregaweb4.nic.in/netnrega/MISreport4.aspx. 18 "Cabinet approves continuation of Pradhan Mantri Awas Yojana - 
Gramin beyond March 2021 till March 2024", Press Information Bureau, Cabinet, December 8, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1779325. 19 Report No. 1 of 2020, General and Social Sector for the year ended 31 March 2019, Comptroller and Auditor General of India, https://cag.gov.in/webroot/uploads/download_audit_report/2020/Rep ort_No_1_of_2020_General_and_Social_Sector_Government_of_Raj asthan.pdf. 20 PMAY-G Dashboard, Completion Rate for Houses sanctioned across the Month, accessed on February 20, 2023, https://rhreporting.nic.in/netiay/dataanalytics/CompletionRateForHsS ancRpt.aspx. 21 Report No. 21, Action Taken on Recommendations in 16th Report, Standing Committee on Rural Development and Panchayati Raj, March 16, 2023, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20
and%20Panchayati%20Raj/17_Rural_Development_and_Panchayati _Raj_21.pdf. 22 Report No. 16, Pradhan Mantri Awas Yojana - Gramin, Standing Committee on Rural Development and Panchayati Raj, August 5, 2021, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20 and%20Panchayati%20Raj/17_Rural_Development_16.pdf. 23 Pradhan Mantri Gram Sadak Yojana Dashboard Home, accessed on February 10, 2023, http://omms.nic.in/. 24 Unstarred Question No. 2123, Lok Sabha, Ministry of Rural Development, answered on March 15, 2022, https://pqals.nic.in/annex/178/AU2123.pdf. 25 Habitations Covered, PMGSY Dashboard, accessed on February 17, 2023, http://omms.nic.in/dbweb/Home/HabitationCoverage. 26 Road Length Completion, PMGSY Dashboard, accessed on February 17, 2023, https://app.powerbi.com/view?r=eyJrIjoiMmNlNzVkMDYtYjJmMC
 
00MWYyLTk0M2UtNzA5MmI3ZTQwZjdjIiwidCI6IjliZjc5NjA5L WU0ZTgtNDdhZC1hYTUzLTI0NjQ2MTg1NTM4YyJ9&pageName =ReportSection6b29be769c4ff01a033b. 27 Report No. 23 of 2016, Performance Audit of Pradhan Mantri Gram Sadak Yojana, Comptroller and Auditor General of India, https://cag.gov.in/ag2/gujarat/en/audit-report/details/23927. 28 Report No. 13, Demands for Grants (2021-22), Department of Rural Development, Standing Committee on Rural Development and Panchayati Raj, March 9, 2021, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20 and%20Panchayati%20Raj/17_Rural_Development_13.pdf. 

29 Report No. 22, Demands for Grants (2022-23), Department of 
Rural Development, Standing Committee on Rural Development and Panchayati Raj, March 16, 2022, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20 and%20Panchayati%20Raj/17_Rural_Development_and_Panchayati _Raj_22.pdf. 30 Standard Bidding Document for PMGSY for Construction and Maintenance, National Rural Roads Development Agency, Ministry of Rural Development, December 2015, https://urrda.uk.gov.in/upload/downloads/Download-17.pdf. 31 PMGSY National Quality Monitor Statewise Grading Abstract Report, accessed on February 17, 2023, http://omms.nic.in/#. 32 Introduction, Deendayal Antyodaya Yojana-National Rural Livelihood Mission, Ministry of Rural Development, accessed on February 10, 2023, https://aajeevika.gov.in/about/introduction. 33 About Us, National Social Assistance Programme, Ministry of Rural Development, accessed on February 10, 2023, https://nsap.nic.in/circular.do?method=aboutus. 
34 "About the Department", Department of Land Resources, accessed on February 3, 2023, https://dolr.gov.in/en/about-us/aboutdepartment. 35 Report 23, Demands for Grants (2022-23), Department of Land Resources, Standing Committee on Rural Development and Panchayati Raj, March 16, 2022, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20 and%20Panchayati%20Raj/17_Rural_Development_and_Panchayati _Raj_23.pdf. 

36 Report No. 27, Action Taken on Recommendations in 23rd Report, Standing Committee on Rural Development and Panchayati Raj, August 3, 2022, https://loksabhadocs.nic.in/lsscommittee/Rural%20Development%20 and%20Panchayati%20Raj/17_Rural_Development_and_Panchayati _Raj_27.pdf. 37 Programme Details, Department of Land Resources, accessed on February 8, 2023, https://dolr.gov.in/en/programmeschemes/pmksy/watershed-development-component-pradhan-mantrikrishi-sinchai-yojana-wdc-pmksy. 38 "Shri Giriraj Singh inaugurates National Watershed Conference", Press Information Bureau, Ministry of Rural Development, July 14, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1841555. 39 'SVAMITVA Scheme', Press Information Bureau, Ministry of Panchayati Raj, December 21, 2015, https://pib.gov.in/PressReleasePage.aspx?PRID=1783885. 40 Report of Expert Committee on SVAMITVA Scheme, Ministry of Panchayati Raj, 2022, https://svamitva.nic.in/DownloadPDF/ExpertCommitteeReportFinalR eport_1668146784685.pdf. 41 Operational Guidelines of Digital India Land Records Modernisation Programme (DILRMP), Ministry of Rural Development, 2019, https://dolr.gov.in/sites/default/files/Final%20%20Guideline%20of% 20DILRMP%2002-01-2019.pdf. 

## Demand For Grants 2023-24 Analysis Agriculture And Farmers Welfare

The Ministry of Agriculture and Farmers' Welfare has two Departments: (i) Agriculture, Cooperation and Farmers' Welfare, which implements policies and programmes related to farmer welfare and manages agriculture inputs, and (ii) Agricultural Research and Education, which coordinates and promotes agricultural research and education.1 This note examines the budget allocations to the Ministry and its expenditure, and discusses issues in the agriculture sector. 

## Overview Of Finances

The Ministry has been allocated Rs 1,25,036 crore in 2023-24, 5% greater than the revised estimates for 2022-23.2,3  The Ministry of Agriculture accounts for 2.8% of the total Union Budget.  The increase in expenditure is on account of marginal increase in the allocation for schemes such as Modified Interest Subvention Scheme (5%) and the Pradhan Mantri Fasal Bima Yojana (10%). 

% 
RE 22-
  
21-22 
Actuals 
23 
BE  
23-24  
change 
(RE to 
BE) 
Farmers' Welfare 
1,14,468 
1,10,255 
1,15,532 
5% 
8,368 
8,659 
9,504 
10% 
Agricultur e Research Ministry  
1,22,836 
1,18,913 
1,25,036 
5% 
Sources: Demand for Grants 2023-24, Ministry of Agriculture 
and Farmers' Welfare; PRS.   

77% of the Ministry's estimated expenditure is allocated towards three schemes (See **Table 2**).  
Allocation for Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which is the largest scheme under the Ministry has remained the same as the revised estimates of 2022-23 at Rs 60,000 crore. Allocation has reduced from the actual expenditure of 2021-22 and budgeted expenditure for 2022-23.   

% change 
(BE over 
 
Actuals 
21-22 
RE  
22-23 
BE  
23-24 
RE) 
PM KISAN 
66,825 
60,000 
60,000 
0% 
Interest Subsidy* 
21,477 
22,000 
23,000 
5% 
Fasal Bima  
13,549 
12,376 
13,625 
10% 

Note: *Interest subsidy for short term credit to farmers scheme was restructured in 2022 to the Modified Interest Subvention Scheme. Sources: Demand for Grants 2023-24, Ministry of Agriculture and Farmers' Welfare; PRS. 

## Policy Proposals In The Budget Speech

In her 2023-24 speech, the Finance Minister made the following proposals regarding agriculture: 

- 
Digital Public Infrastructure: It will be built as an open source, open standard, and interoperable public good.  This will enable inclusive, farmer-centric solutions through relevant information services for crop planning and health, and improved access to farm inputs, credit, and insurance.  
- 
Agriculture Accelerator Fund: The Fund will be setup to encourage agri-startups by young entrepreneurs in rural areas.  It aims to bring modern technology to increase agricultural productivity and profitability.   
- 
Agriculture Credit: The agriculture credit target will be increased to Rs 20 lakh crore with a focus on animal husbandry, dairy, and fisheries. 
- 
PM Matsya Sampada Yojana: A new scheme with a targeted investment of Rs 6,000 crore has been launched to enable activities of fishermen and fish vendors and improve value chain efficiencies. 
- 
Storage: A plan will be implemented to set up decentralised storage capacity to help farmers store their produce and realize realise remunerative prices through sale at appropriate times.   

## Utilisation Of Funds

In the past 10 years, fund utilisation of the Ministry has been above 70%.  The Ministry was able to utilise 100% of the allocated funds in 2016-17. Allocation to the Ministry increased by 141% in 2019-20 on account of PM-KISAN.  48% of the allocation to the Ministry in 2023-24 is towards PM-KISAN.  However, utilisation of funds reduced from 93% in 2018-19 to 73% in 2019-20. Utilisation was 93% in 2021-22.   
Rashtriya Krishi Vikas Yojana (RKVY) scheme was introduced in 2007 to ensure holistic development of agriculture and allied sectors.4  It is a centrally sponsored scheme that enables states to choose agriculture development activities as per their plans.4  It was restructured under the 2022-23 budget to subsume other schemes such as the Pradhan Mantri Krishi Sinchai Yojna-Per Drop More Crop, Paramparagat Krishi Vikas Yojna, National Project on Soil and Health Fertility, Rainfed Area Development and Climate Change, Sub-Mission on Agriculture Mechanization including Management of Crop Residue.5  In 2023- 24, Rs 7,150 has been allocated under RKVY for transferring to states/UTs.  The allocation for 2023- 24 is 2% greater than the revised estimates for 2022-23.  Between 2019-20 and 2021-22, projects worth Rs 518 crore have been approved across 18 states under the Scheme.6 

## Issues To Consider

The agricultural sector faces several issues such as low growth, high incidence of indebtedness among farmers, high cost of inputs, fragmented landholdings, and a lack of capital investments in the sector.  In the 2016-17 Union Budget the government announced that farmer incomes will be doubled by 2022-23, from 2015-16 levels.7   

## Doubling Of Farmers' Income

A committee was formed to recommend strategies for achieving the target which submitted its report in September 2018.8  It recommended that policy focus must shift away from just increasing farm output, since increased output may not always lead to an increase in farmers' income.  It noted that input prices, the level of input used, and the price of the output also has an impact of farmer incomes.9  Hence it recommended that with an increase in the level of output, the cost of production be reduced, remunerative prices for agricultural produce be ensured, and sustainable technology be used.9  The Ministry has several schemes in place such as PM-KISAN to provide income support to farmers, the Pradhan Mantri Fasal Bima Yojana which seeks to provide crop insurance, and the Pradhan Mantri Krishi Sinchayee Yojana, which promotes microirrigation techniques.  Efforts have been made to improve access to agricultural credit, and improve agricultural markets through digitalisation, introduction of contract farming, and promoting Farmer Producer Organisations (FPO). In the absence of recent data, it is unclear whether farmer incomes have doubled in 2022-23.  Note that the latest farmer income data is as per 2018-19 
(See **Table 3**).  The average monthly income of an agricultural household was Rs 8,059 in 2015-16, which increased to Rs 10,218 in 2018-19.9,10     

Year 
Average monthly income per 
agricultural household 
2002-03 
                                        2,115  
2012-13 
                                        6,426  
2015-16 
8,059  
2018-19 
                                      10,218  
2022-23 
NA 

Note: Income for 2015-16 is derived from the annual income (at current prices) reported by the Committee on Doubling Farmers' Income.  Sources: MOSPI; Committee on Doubling Farmers' 
Income, 2017; PRS. 

In the absence of data, agricultural GDP may be examined to understand income growth. Agricultural GDP indicates the total income generated from producing agricultural goods and services.  For farmer incomes to double, agricultural GDP should also have doubled, provided the number of farmers remained the same. Between 2015-16 and 2022-23, the agricultural gross value added (GVA) at current prices (i.e., including inflation), doubled from Rs 25 lakh crore to Rs 51 lakh crore (11% growth).11  Note that, agricultural GVA (at current prices) has doubled every eight years in the past 30 years.11  In real terms, i.e., adjusting for inflation, agricultural GVA grew by 1.3 times.  Agriculture growth has been volatile in real terms and the sector is estimated to grow at 3% in 2022-23 as compared to 4% in 2021- 22.  
 
Notes: * Third revised estimates; ** Second revised estimates; # First revised estimates; $ Provisional estimates; ^ Advance estimates.  Growth includes agriculture, forestry, fishing, and mining and quarrying. Sources: Economic Survey of India 2022-23; PRS. 

## Minimum Support Prices

The government has taken several measures to improve agricultural marketing and ensuring remunerative prices to farmers.  These include procuring certain crops at the Minimum Support Price (MSP).  Factors such as the cost of production, price trends, and ensuring a 50% margin over the cost of production are used to determine the MSP for a season.  Wheat MSP for 2023-24 is fixed at Rs 2,125 per quintal.12  The cost of cultivating wheat for the year is Rs 1,065. Paddy MSP for 2022-23 is fixed at Rs 2,040 per quintal, whose cost of cultivation is Rs 1,360. 13  
The National Commission on Farmers (2006) had recommended that MSP be at least 50% greater than the weighted cost of production.  The Ministry adopted that recommendation in 2018-19, and MSP for all kharif and rabi crops was increased to reflect a return of at least 50% of the cost of production.14 The Ministry also fixes a Fair and Remunerative Price (FRP) for the purchase of sugarcane by sugar mills.  FRP for 2022-23 was fixed at Rs 305 per quintal.15   

## Income Support Through Transfers

To supplement the financial needs of farmers, they are being provided with income transfers.  PM- KISAN is a direct benefit transfer scheme that was launched in February 2019.16  It provides landholding farmer families with income support of Rs 6,000 per year (in three instalments of Rs 2,000).17  In 2023-24, Rs 60,000 was allocated towards the scheme, same as the revised estimates for the previous year.  The Scheme receives the highest allocation (48%) from the Ministry. 

Constant income transfers with rising rural inflation: PM-KISAN was operationalised in December 2018 and aims to enable farmers to procure inputs to ensure crop health and yield.17  It is currently applicable to all landholding farmer families irrespective of the size of landholdings. Between 2019-20 and 2021-22, the amount to be disbursed to each family has remained constant (Rs 6,000).  However, during this period rural inflation was between 4-6%.18  Rural inflation includes prices of vegetables, housing, and transport.  
Operational Guidelines, PM-KISAN; PRS. In 2021-22, Rs 66,825 crore was spent on PM- KISAN.  As per the revised estimates of 2022-23, only Rs 60,000 crore is estimated to be spent on the Scheme, lower than the budget estimates for the year at Rs 68,000 crore.  **Table 4** indicates the expenditure on the scheme since its inception.   

Actual 
Period 
Number of 
beneficiaries  
Expenditure 
(in lakh) 
(in crore) 
December 2018 - March 2019 
316 
6,322 
April 2019 - July 2019 
600 
 
August 2019 - November 2019 
766 
48,723 
December 2019 - March 2020 
820 
 
April 2020 - July 2020 
927 
 
August 2020 - November 2020 
972 
61,927 
December 2020 - March 2021 
985 
 
April 2021 - July 2021 
998 
67,032 
August 2021 - November 2021 
1,034 
December 2021 - March 2022 
1,041 

Sources: Lok Sabha Unstarred Question Nos. 1054 and 1150; PRS. 

Agricultural labourers ineligible for transfers: 
Beneficiaries of the PM-KISAN scheme include only farmers that own cultivable land.  The scheme does not cover agricultural labourers who form 55% of the agricultural workers in the country.19  
Agricultural **labourers** do not own land and work on another person's land.  They earn income through wages or a share in the crop.20  
Agricultural **workers** include cultivators and labourers.  The share of landless agricultural labourers in total agricultural workers has increased over the years from 28% in 1951 to 55% in 2011.19 The Standing Committee on Agriculture (2020) noted that tenant farmers, who are a significant part of landless farmers in many states, do not receive income support benefits.21  It recommended the government to examine this issue in coordination with states so that landless farmers can also receive benefits under the scheme. 

The Pradhan Mantri Kisan Maan Dhan Yojana (PMKMY), launched in 2019 is a central sector scheme to provide pensions to small and marginal farmers with cultivable land of up to two hectares.22,23  Eligible beneficiaries are entitled to a monthly pension of at least Rs 3,000.  As of November 2019, 18.8 lakh farmers have registered under the Scheme.24  Farmers within the 18-40 age bracket are eligible under the Scheme.  In 2023-24, the Scheme has been allocated Rs 100 crore, against the revised estimates of Rs 50 crore in 2022-23, implying coverage of less than 15,000 farmers.  In 2021-22, the Ministry spent Rs 40 crore.  
Climate change and agriculture Agricultural output is vulnerable to changes in the climate as higher temperatures tend to reduce crop yields and increase pest infestations.25  Rainfed agriculture is primarily impacted due to variability in the number of rainy days.26  As per a study by the National Innovations in Climate Resilient Agriculture (NICRA), climate change is expected to affect yields of crops such as rice, wheat, and maize.27  Studies on rice and wheat suggest that wheat is sensitive to rising maximum temperatures and heatwaves, while rice is vulnerable to increased minimum temperatures in the region.27 
Sources: Department of Agriculture and Farmers' Welfare; PRS. 

The total wheat production in the country has been steadily rising at 3% CAGR between 2014-15 and 2021-22.28  As per the Indian Meteorological Department, certain areas in India experienced a heatwave in March 2022.29  The maximum temperature was 33o Celsius, 2o greater than normal.  As per a study by the US Foreign Agricultural Service, wheat yield in March 2022, in wheat growing areas was 11% lower than anticipated.30  The report suggests that yield was not in line with the forecast as record high temperatures were observed during the grain filling (final) period for wheat.30  Note that wheat production declined by two million tonnes in 2021- 22.31 Similarly, in the first two weeks of October 2022, crops such as paddy, cotton, blackgram, vegetables, soybean, and bajra were affected across five states due to heavy rainfall.32  In Andhra Pradesh, agricultural area of 7,178 hectares was affected due to heavy rains during this period.  The National Innovations in Climate Resilient Agriculture (NICRA) project was launched in February 2011 to make Indian agriculture more resilient to changes in the climate.33  NICRA conducts research on mitigation of climate impact on agriculture and field demonstrations of technologies.34  In 2021-22 Rs 50 crore was budgeted for this initiative, of which Rs 47 crore was actually spent.3 The allocation declined to Rs 41 crore in 2022-23. From 2023-24 onwards, the NICRA project will be merged with the Natural Resource Management Institutes including Agro Forestry Research (NRAI), which examines farm productivity, profitability, and soil health deterioration.3  The overall allocation to Natural Resources Management (which includes NRAI and NICRA) has increased from Rs 186 crore in 2022-23, to Rs 240 crore in 2023-24 (29% increase). 

## Stubble Burning

Several agricultural practices also contribute to local air 
pollution.  For instance, burning stubble in states such as 
Punjab, Haryana and Uttar Pradesh contributes to higher 
pollution levels in states such as Delhi.35  Farmers choose 
to burn stubble, in order to clear the fields to sow Rabi 
crops.35    

As per, the System of Air Quality and Weather Forecasting 
and Research portal, stubble burning was estimated to have 
contributed to the pollution levels between 2% to 44% for 
PM 2.5 levels in Delhi during October - November 2019.36 

In order to control stubble burning, the government 
implements the Promotion of Agricultural Mechanisation for 
In-Situ Management of Crop Residue, a central sector 
scheme in Punjab, Haryana, Uttar Pradesh and Delhi.36  
Punjab provides compensation of Rs 100 per quintal to 
small and marginal farmers to manage paddy residue 
without burning stubble.  Haryana provided Rs 100 per 
quintal as incentive to farmers who sold paddy in November 
2019 without burning crop residue.36   

## Crop Insurance

The Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (RWBCIS) were launched in 
2016 to provide farmers with affordable crop insurance against non-preventable natural risks from pre-sowing to post-harvest stage.37  Under PMFBY, farmers pay a premium of up to 2% (for Kharif crops), 1.5% (for Rabi crops), and 5% (for horticultural crops) of the sum insured.  States (except for north-eastern states) and the central government share the premium burden equally. The scheme was made voluntary to farmers in 2020. In 2023-24, Rs 13,625 crore is allocated to the scheme, 0.5% greater than the actual expenditure incurred in 2021-22.  In 2022-23, Rs 15,500 crore was budgeted for the scheme, however estimated expenditure declined (by 20%) in the revised estimates to Rs 12,376 crore.   

% change (BE 
23-24 over RE 
Actuals 
21-22 
BE  
22-23 
RE  
22-23 
BE  
23-24 
22-23 
13,549 
15,500 
12,376 
13,625 
10% 

Between 2018 and 2022, the number of farmers covered under the scheme reduced by 9%.38 Similarly, the sum and area insured have also reduced by 7% and 5%. 

Delays in payment is one of the biggest challenges in implementing the scheme.39  The Ministry noted that delay in settlement of claims takes place due to: (i) delay in release of state share of subsidy, and (ii) delay in sharing yield data by states to insurance companies.40  The Committee added that delays may also occur due to yield-related disputes between insurance companies and states, and nonreceipt of account details of farmers.39  It recommended implementing a timeline for settlement of claims by insurance companies. Between 2016 to 2020, a total of Rs 4,602 crore of state subsidy was pending, against which claims of Rs 3,008 crore were also pending. The Committee also noted that revisions in the scheme may lead state governments to withdraw from it.  It recommended revising amendments that: (i) prohibit participation of those states which delay the release of subsidies, and (ii) mandate state governments to bear the entire subsidy for crops which have a greater-than-specified premium rate.  The Ministry noted that several states have opted out of the scheme due to their inability to pay the state share of premium subsidy. Some states have their own crop insurance schemes.  For instance, Jharkhand has a crop relief scheme, where financial assistance is provided in case of crop damage, without the insurance premium component.41  West Bengal also has its own crop insurance scheme that covers all farmers. It insures certain specified crops such as wheat, maize, moong, sugarcane, and paddy, with an indemnity of up to 90%.42 Anticipating the rise in demand for crop insurance due to the vulnerability of farming to climate change, the Ministry of Agriculture and Farmers' 
Welfare has noted that it may make necessary changes to PMFBYS.43   

## International Year Of Millets

In India, millets are primarily a kharif crop, requiring less water and agricultural inputs than other similar staples. Total millet production in 2021-22 was 118 million tonnes, as compared to 107 million tonnes of wheat.31 

The United Nations General Assembly declared 2023 as the 
'Year of Millets' to promote their production and 
consumption.44  India has taken several steps to promote 
the use of millets.  For instance, it contributed USD five lakh 
to the FAO for the international year of millets.45  Millet 
products and startups are being supported for enhancing 
the domestic consumption and export millets.45 

The Production Linked Incentive Scheme for the Food 
Processing Industry was launched in March 2021.46  It has 
an outlay of Rs 10,900 crore with manufacturing incentives 
for ready to eat foods which include millet-based products, 
marine products, and processed fruits and vegetables.47 

* Fourth Advance Estimates.  Sources: Ministry of Agriculture and 

## Fragmented Landholdings

With fragmentation of landholdings, and rise in the absolute number of agricultural workers, farm productivity may be impacted.  India's agricultural sector is dominated by marginal and small farm holdings.48  Over the past several decades, the number of farm holdings have increased while the area under farming has declined.  This has led to a reduction in the average size of a landholding.49 Area under farming has declined due to its diversion for non-agricultural purposes. 48 Fragmented landholdings may affect agricultural growth as it implies reduced capital expenditure on a farm.  Smaller farmers find it difficult to invest in tube wells, drip irrigation, bulk inputs or storage of produce.21  Farm productivity may be improved through land consolidation.  Between 2005-06 and 2015-16, the share of marginal and small landholdings has increased, while the proportion of medium and large landholdings has reduced (See Figure 9).  Marginal landholdings have an area of less than one hectare.  Between 1951 and 2011, the number of agricultural workers increased by 1.7%.19  The Committee on Doubling Farmers' Income (2017) had recommended that to improve farm productivity, agricultural workers need to move out of the sector.   

The Committee on State Agrarian Relations and the 
Unfinished Task in Land Reforms (2017) noted that the 
need for land reforms is derived from the Constitutional 
mandate for equality, and the state's duty to ensure 
redistributive justice.50  It also noted that smaller farms are 
more efficient in the utilisation of land, ensure food security, 
and rural employment.  It recommended that land ceilings 
must be implemented with retrospective effect, and at most 
two acres of wet land and five acres of dry land be allotted. 

The National Commission on Farmers (2004) (Chair: M.S. 
Swaminathan) noted that land is a shrinking resource in 
agriculture.  In order to improve production of grains, fruits, 
and vegetables, productivity per unit of arable land must 
improve.  It recommended that ceiling surplus land be 
redistributed and prime agricultural land not be diverted to 
the corporate sector for non-agricultural purposes.  It also 
recommended establishing a system to regulate the sale of 
agricultural land, based on the quantum of land, nature of 
proposed use, and category of buyer. 

Gross capital formation indicates the level of investment in building assets.  The share of gross capital formation in agricultural output has reduced from 18% in 2011-12 to 14% in 2020-21.  The share of private investment has been much greater than the share of public investment (See Figure 10).      
* Third Revised Estimates ** Second Revised Estimates # First revised estimates.  Sources: Agricultural Statistics at a Glance 2021; PRS. 

## Agricultural Credit

Availability and accessibility to adequate, timely and low-cost credit is necessary for profitable farming.51  The amount of institutional credit available to farmers has increased over the past few years.  However, rural indebtedness has increased and loans are primarily being used to meet revenue expenditure in farming, or recurring household expenditure. Over the past ten years, the total institutional credit availed by farmers has increased at CAGR 7.8%.19 In 2021-22, the Ministry had targeted to provide Rs 16.5 lakh crore worth of credit to the farmers.52  It exceeded its target by 13%.  It aims to provide Rs 18.5 lakh crore as agricultural credit in 2022-23. As access to credit has increased, the proportion of short-term credit has been reducing since 2012-13 
(See **Figure 11**).  However, it rose from 57% in 
2020-21 to 60% in 2021-22 (as of December 2022). A higher share of short-term credit indicates that farmers are borrowing to meet their recurring expenditure needs, rather than funding long-term investments. Institutional credit refers to loans taken from commercial banks, regional rural banks, insurance companies, employers, or non-banking financial institutions.53  Non-institutional credit refers to loan taken from landlords, agricultural moneylenders, friends and family, or professional moneylenders. A significant portion of the total credit is not being spent in asset creation. 

* As of December 12, 2021 
Sources: Agricultural Statistics at a Glance (2021); PRS. As of December 2019, 25% of institutional credit was used to meet revenue expenditure in farm business, while 20% was used for capital expenditure.54  31% of non-institutional credit was used to meet household expenditure, followed by loans for housing (17%).54   
Sources: All India Debt and Investment Survey 2019; PRS. 

Despite an increase in the availability of lowinterest institutional credit, agricultural indebtedness has increased as compared to 2003.54 As of December 2019, half of all agricultural households are indebted, with an average outstanding loan of Rs 74,121.     

Average 
% 
Year 
Number  
(in lakh) 
indebted  
outstanding 
loan amount 
2003 
894 
49% 
12,585 
2013 
902 
52% 
47,000 
2019 
930 
50% 
74,121 

Sources: Situation Assessment Survey for various years; PRS. 

Schemes for agricultural credit The government launched the Interest Subvention Scheme in 2006-07, to provide short term agricultural loans up to three lakhs at an annual interest rate of 7% for farmers engaged in agriculture and allied activities.55  Additional 3% subvention is also provided for prompt and timely repayment of loans.  The scheme was modified in 2022.56  Under the modified scheme, lending institutions such as public sector banks, regional rural banks, or cooperative banks are provided with 1.5% interest subvention from 2022-23 to 2024-25.   

% change 
(BE over 
 
Actuals 
21-22 
RE  
22-23 
BE  
23-24 
RE) 
Interest Subsidy* 
21,477 
22,000 
23,000 
5% 

Note: The interest subsidy for short term credit to farmers scheme was restructured in 2022 to the Modified Interest Subvention Scheme. Sources: Demand for Grants 2023-23, Ministry of Agriculture and Farmers' Welfare; PRS. 

In 2015, the Committee on Medium-Term Path on Financial Inclusion under the Reserve Bank of India (RBI) observed that the scheme is for shortterm crop loans, and hence it discriminates against long-term loans.57  Short term crop loans are used for pre-harvest activities such as weeding, sorting, harvesting, and transporting.  Long-term loans are taken to invest in agricultural machinery and equipment, or irrigation.  The Committee stated that the scheme does not incentivise long-term capital formation, which is essential to boost productivity in the sector. 

Table 4: Funds allocated and released under the 

| Year       | Allocated    | Released    |
|------------|--------------|-------------|
| % of funds |              |             |
| released   |              |             |
| 2016-17    | 15,000       | 13,397      |
| 2017-18    | 15,000       | 13,046      |
| 2018-19    | 15,000       | 11,496      |
| 2019-20    | 18,000       | 16,219      |
| 2020-21    | 21,175       | 17,790      |
| 2021-22*   | 19,468       | 8,223       |

* As of January 20, 2022 Sources: Expenditure Budget of various years; PRS. 

The Committee on Doubling Farmers' Income 
(2017) recommended that the central and state governments should provide interest subsidy on long-term or investment credit taken by farmers, particularly small and marginal farmers. The Kisan Credit Card scheme was introduced in 1998 to enable farmers to purchase agricultural inputs such as seeds, fertilisers, or pesticides.58  It was extended in 2004 to meet the needs of farmers in allied and non-farm activities as well.  The Revised Kisan Credit Card Scheme (2020) seeks to provide banking credit through a single window to meet needs such as: (i) short term credit requirement for cultivation of crops, (ii) postharvest expenses, (iii) produce marketing loan, (iv) working capital to maintain farm assets, and (v) consumption requirements of a farmer household. Small and marginal farmers, share-croppers, tenant farmers, and self-help groups are eligible as scheme beneficiaries.  In 2022-23, as on November 11, 2022, 377 lakh applications have been sanctioned with a credit limit of Rs 4 lakh crore.59 

Amount sanctioned 
Year 
Number of cards 
issued (in lakh) 
(in crore) 
2019-20 
109 
36,350 
2020-21 
82 
2,34,420 
2021-22 
75 
             3,19,751  
2022-23 
48 
             2,17,710  

Note: Amount for 2019-20 does not include data of scheduled commercial banks as the data was not maintained at the time. Data for 2022-23 is as of September 2022. Sources: Lok Sabha Unstarred Question No. 1051, answered December 13, 2022; PRS. 

## Inputs For Production Fertiliser Subsidy And Soil Health

The Ministry of Chemicals and Fertilisers is responsible for the production, distribution and pricing of fertilisers.  However, the Ministry of Agriculture and Farmers' Welfare is responsible for assessing its requirements.60  The Agriculture Ministry is also responsible for promoting balanced use of fertilisers, i.e., ensuring that various nutrients and micronutrients are used in proper combinations.  Three major nutrients used in fertilisers include Nitrogen (N), Phosphorous (P) and Potash (K). 

Fertiliser subsidy: Fertilisers are subsidised through a urea subsidy (which contains nitrogen) and a nutrient-based subsidy for P and K fertilisers. Subsidy is provided to fertiliser manufacturers and importers so that farmers can directly purchase them at subsidised rates.60  In 2023-24, Rs 1,75,103 crore was budgeted for fertiliser subsidies 22% less than the revised estimates of 2022-23.  However, the subsidy for 2023-24 is 66% greater than the budget estimates for 2022-23.   
In 2022-23, Rs 1,05,222 crore was budgeted for fertiliser subsidies, which increased to Rs 2,25,222 crore (114% increase) at the revised stage.  In November 2022, the central government increased the subsidy rates for nutrient-based fertilisers for the Rabi season 2022-23 (October 1, 2022 to March 31, 2023).  The increase was mainly on account of increased subsidy to indigenous urea, which was driven by an increase in international prices of fertilisers.  
Fertiliser imports: The Ministry of Chemicals and Fertilisers noted that the international prices of raw materials and fertilisers have been increasing for the past year and a half, making imports costly.61 About 25-30% of urea is imported annually.62 Between January 2021 and December 2021, the international price of urea increased from 300 USD per metric tonne to 1,000 USD per metric tonne due to supply disruptions led by sanctions on Russia and export restrictions by China.65,63  As a result, a larger amount of money is being spent to import the same amount of fertilisers, which has led to an increase in the fertiliser subsidy.   

## Rs Crore)

% 
Subsidy 
BE  
22-23 
RE  
22-23 
BE  
23-24 
change 
(RE 22-
23 over 
BE 23-
24) 
Urea Subsidy 
63,222 
1,54,098 
1,31,100 
-15% 
42,000 
71,122 
44,000 
-38% 
Nutrient based subsidy Total Subsidies 
1,05,222 
2,25,222 
1,75,103 
-22% 
Of which imports 
37,390 
67,927 
49,500 
73% 

Sources: Demand for Grants 2023-24, Ministry of Chemicals and Fertilisers; PRS. 

Fertiliser imports: The Ministry of Chemicals and Fertilisers noted that the international prices of raw materials and fertilisers have been increasing for the past year and a half, making imports costly.64 About 25-30% of urea is imported annually.65 Between January 2021 and December 2021, the international price of urea increased from 300 USD per metric tonne to 1,000 USD per metric tonne due to supply disruptions led by sanctions on Russia and export restrictions by China.65,66  As a result, a larger amount of money is being spent to import the same amount of fertilisers, which has led to an increase in the fertiliser subsidy.   
Note: Data for 2022-23 is up to December 2022. Sources: Lok Sabha Unstarred Question 439; PRS. 

Import dependence: The Standing Committee on Chemicals and Fertilisers (2021) had observed that 25% of urea, 90% of phosphatic fertilisers, and 100% of potassic fertilisers are imported.67  India is dependent on imports of different fertilisers due to the non-availability or scarce availability of resources.  To cushion the effects of fluctuations in international prices, the Committee recommended the Ministry to: (i) diversify import sources by signing long-term agreements through PSUs, and (ii) monitor international prices and maintain a buffer stock to control for sudden fluctuations.65 
The Standing Committee (2020) also noted the increase in expenditure on fertiliser subsidies over the years.68  It noted that while it is necessary to provide the subsidy, it is also the government's responsibility to contain this expenditure by adopting innovative ways without increasing the prices.68  The Committee recommended that the government should take all possible steps to reduce its expenditure on subsidy by: (i) modernising fertiliser manufacturing plants, (ii) adopting best practices of manufacturing and strict energy norms, and (iii) building a strong research and development base for continuously upgrading the manufacturing technology, so as to reduce the manufacturing cost.68 

Subsidy (in Rs/kg) 
Nutrient 
% change 
2021-22 
2022-23 
Nitrogen 
18.79 
98.02 
422% 
45.32 
66.93 
48% 
Phosphorou s Potash 
10.11 
23.65 
134% 
Sulphur 
2.37 
6.12 
158% 

Sources: Press Information Bureau; PRS. 

Soil Health: While examining the system of fertiliser subsidy, the Standing Committee on Chemicals and Fertilisers (2020) observed that agricultural productivity increased tremendously due to fertiliser subsidy, and helped ensure food security.68  However, large amounts of subsidy has led to negative effects such as over-use and imbalanced use, which results in the degradation of soil.  The Soil Health Card scheme was launched in 2015 to provide farmers with information regarding the quality of soil.69  The Cards provide farmers with recommendations on appropriate nutrient dosage to improve soil health and fertility.70 This scheme has now been merged with the Rashtriya Krishi Vikas Yojana, an umbrella scheme for ensuring holistic development in agriculture.2  As per the Ministry of Chemicals and Fertilisers, the possibility of excessive use of fertilisers generally arises when it is applied without proper assessment of: (i) the nutrient requirement of a crop, (ii) contribution of nutrients from soil and other sources, (iii) nutrient use efficiency of the fertilizers, and (iv) mode, method and time of applications.  As per a study by the National Productivity Council (2017) on soil testing infrastructure, using fertiliser sand micronutrients based on Soil Health Card recommendations resulted in 8-10% savings and a 5-6% overall increase in the yield of crop.71 In order to prevent over-use of fertilisers, the Standing Committee on Chemicals and Fertilisers (2020) recommended that farmers must get the fertiliser subsidy directly in their bank accounts.68 It noted that several manufacturing plants were 
 
operating with old technology which led to inefficiencies.  The cost of such inefficiencies is being borne by the government through subsidies. It recommended that a direct transfer of subsidy would lead to a system where manufacture and import of fertilisers takes place as per market forces.68  In October 2016, the Department of Fertilisers has implemented Direct Benefit Transfer (DBT) project for fertiliser subsidy payment. Under the fertilizer DBT system, 100% subsidy on various fertiliser grades is released to fertiliser companies on the basis of actual sales made by the retailers to the beneficiaries.72  A Nodal Committee has been constituted in June, 2020 to formulate a policy for implementing Direct Cash Transfer of Fertiliser Subsidy to farmers.  Two meetings were held in 2020.72 

## Irrigation

A significant portion of Indian agricultural is rainfall dependant.  Current sources of irrigation such as tubewells and canals lead to wastage of water.  Further, water intensive crops such as sugarcane are being grown in water-scare areas. The Ministry has launched the Pradhan Mantri Krishi Sinchayee Yojana to promote microirrigation techniques. As of 2018-19, 51% of the country's net sown area was under irrigation.19  As of 2018-19, major irrigation sources include tubewells (49%) and other wells (15%), and canals (23%).  Sources such as canals and tubewells use the flood irrigation technique, where water is allowed to flow in the field and seep into the soil.  This results in wastage of water since excess water seeps into the soil or flows off the surface without being utilised.  It has been recommended that farmers move from flood irrigation to micro-irrigation systems (drip or sprinkler irrigation systems) to conserve water. The Pradhan Mantri Krishi Sinchai Yojana was launched in 2015 to increase the coverage of the area under irrigation.  The Ministry implemented the 'Per Drop More Crop' component until 2021- 22 under the scheme to increase water efficiency through micro-irrigation and other interventions. The component of the scheme now continues under Rashtriya Krishi Vikas Yojana, an umbrella scheme for farmer welfare, for 2022-23.  Between 2013 and 2021, 60 lakh hectares of area has been covered under micro-irrigation. Several crops such as paddy and sugarcane are grown in districts that face a scarcity of water.  For example, Maharashtra (which is one of the highest producers of sugar) faces groundwater stress and lacks perennial sources of irrigation.73,74  Other states which also produce sugar such as Karnataka and Tamil Nadu lack proper irrigation channels. In these states, sugarcane cultivation takes place in districts where the groundwater level is categorised semi-critical.  The Swaminathan Commission on Farmers noted that land-use must be designed such that crops that are high value, but require low water must be encouraged in water scarce areas. 

## Power Subsidies For Farm Use

Water intensive crops such as sugarcane and paddy require 
pumped irrigation.  In order to reduce irrigation costs, 
electricity is subsidised in many parts of the country.  In 
certain states, the supply of electricity for agriculture is 
totally free, without consumption limits.  The Standing 
Committee on Water Resources (2022) noted that 
subsidised electricity encouraged farmers to grow water-
intensive crops in water-scarce areas.75   For instance, 73% 
of the rechargeable groundwater area in Punjab is 
categorised as over-exploited (2022).76,77  Note that Punjab 
budgeted Rs 6,395 crore as expenditure on power 
subsidies in 2022-23.78 

Such subsidises also impact government finances.  Power 
subsidy is provided in various ways: (i) directly transferring 
funds from the government to distribution companies 
(discoms) and (ii) by charging certain consumers higher 
(cross subsidy) than the cost of supply.  In the past few 
years discoms have reported persistent losses, and have 
been bailed out by the state and central governments.  
Between 2017-18 and 2020-21, they accumulated losses 
worth three lakh crore rupees.  Schemes such as the Ujwal 
Discom Assurance Yojana (UDAY), the liquidity infusion 
scheme (2020) and revamped distribution sector scheme 
(2022) were introduced to provide discoms with financial 
assistance.  Reasons such as inadequate metering, delays 
in receiving government subsidy, inadequate recovery of 
fixed costs, and high cross subsidy components may have 
contributed to losses.  Direct transfers to discoms 
contributed to 20% of discoms' revenue in 2020-21.79  
However, the release of such subsidy has witnessed 
delays.   

To ensure competition in power distribution, the Electricity 
Act, 2003 specifies that cross subsidy be within a specified 
limit, and that it be reduced over the years.80  To address 
the question of affordable electricity for farmers and a cost-
reflective pricing mechanism, direct benefit transfer (DBT) of 
subsidy has been proposed.81  A DBT seeks to address 
some issues with targeting and disbursement.  Under a 
DBT model, farmers would have to pay for their power 
consumption, and a commensurate subsidy will be 
transferred to their bank accounts.   

## Agricultural Marketing

Agriculture markets in most states are regulated by the Agriculture Produce Marketing Committees (APMCs) established by the state governments. APMCs were set up to ensure fair trade between buyers and sellers for effective price discovery of farmers' produce.  APMCs can: (i) regulate the trade of farmers' produce by providing licenses to buyers, commission agents, and private markets, (ii) levy market fees or any other charges on trade, and (iii) provide necessary infrastructure within their markets to facilitate the trade.82  The Standing Committee on Agriculture (2019) observed issues with the implementation of APMC laws and that they need urgent reforms.82  Issues identified by the Committee include: (i) most APMCs have a limited number of traders operating, which leads to cartelisation and reduces competition, and (ii) undue deductions in the form of commission charges and market fees.  Traders and commission agents organise themselves into associations, which does not allow easy entry of new persons into market yards, stifling competition.82 Parliament enacted laws three laws in September 2020 to: (i) facilitate barrier-free trade of farmers' produce outside the markets notified under the various state APMC laws, (ii) define a framework for contract farming, and (iii) impose stock limits on agricultural produce only if there is a sharp increase in retail prices.83,84,85  The laws were repealed through the Farm Laws Repeal Bill, 2021 following large protests by farmers and a stay implemented by the Supreme Court.86 

## Electronic National Agricultural Market

The National Agricultural Market (e-NAM) scheme was 
launched in 2015 to provide farmers with remunerative 
prices for their produce through a transparent online 
competitive bidding system.87  e-NAM is envisaged as a 
national trading portal to create a unified market for 
agricultural commodities.  States who wish to integrate their 
mandis with e-NAM are required to reform their APMC Acts 
to: (i) allow for a single trading license across the state, (ii) 
create a single point levy of market fee, and (iii) provide for 
e-auction and e-trading as a mode of price discovery.  

e-NAM will be implemented by the Small Farmers' 
Agribusiness Consortium.88  The e-NAM portal seeks to 
integrate markets across the country and provide more 
options to buyers and sellers.  Registration of farmers and 
sellers, weighing, quality checks, auctions, and transactions 
will take place online.  The Standing Committee on 
Agriculture (2022) observed whether all states/UTs can be 
integrated with the e-NAM platform, and recommended the 
Ministry to facilitate their integration.89  As of November 30, 
2022, 1,260 mandis across 25 states/UTs have been 
integrated with the portal.90  The government provides 
training to farmers, traders, and APMC officials for using the 
portal.  The government provides assistance of up to Rs 75 
lakh for each mandi to create infrastructure for cleaning, 
sorting, and packaging.91   

As per a field study conducted in 10 mandis in Karnataka, 
only selected commodities on selected days of the week are 
traded on the platform.92  Commission agents are registered 
as traders and there have been several power cuts.  The 
study noted that unification of the market has not taken 
place as despite having a national trading license, a trader 
has to arrange for storage and transport of the commodities.  
Small farmers are reluctant to part with their produce for 
quality checks.92  However, it noted that the e-NAM portal 
has made trading transparent, and has saved farmers' time.  

The Standing Committee on Agriculture (2019) 
noted that the availability of a transparent, easily 
accessible, and efficient marketing platform is a 
pre-requisite to ensure remunerative prices for 
farmers.  Small and marginal farmers (who hold a 
majority of the agricultural landholdings in the 
country) face various issues in selling their produce 
in APMC markets such as inadequate marketable 

surplus, long distances to the nearest APMC markets, and lack of transportation facilities.  There are several suggestions for reforming APMCs. These include digitalising the marketing process, contract farming, and promoting a futures market.   
The central government released the model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act 2017 in April 2017.93  The model Act seeks to provide farmers with marketing channels other than the APMC. APMCs will be made responsible for: (i) ensuring payment to farmers on the same day, (ii) publicising the rates of agricultural produce brought into the market area for sale, and (iii) setting up public private partnerships for managing agricultural markets.  Further, it has a provision to directly sell farm produce through a contract, without routing it through a notified market.  As of November 2019, Arunachal Pradesh has adopted the model Act, while Uttar Pradesh, Chhattisgarh, and Punjab have adopted several provisions of the Act.94  Studies have noted that contract farming may provide benefits in terms of yield, prices, and incomes.  However, it may exclude small farmers as contracting corporations demand large tracts of land.  Under the APMC Act of Haryana, a contracted price cannot be lower than the MSP of the preceding year, which affects price discovery proposed by the arrangement.95,96 An agricultural commodities exchange backed by a warehouse receipt system is expected to improve the efficiency in agricultural marketing.  The National Commodity and Derivatives Exchange Limited (NCDEX) is an agricultural derivative exchange, incorporated in 2003.97  Commodities such as soya oil, chana, jute, rubber, and turmeric are traded on NCDEX.  As per the Standing Committee on Food, Consumer Affairs and Public Distribution (2010), futures markets lead to reducing seasonal price variations and help the farmer in realising a better price at the time of the harvest.98  It allows a farmer to postpone the sale of his product as well, and moderate market arrivals.  
 
1 Ministry of Agriculture and Farmers' Welfare, as accessed on February 7, 2023, https://agricoop.nic.in/#gsc.tab=0. 2 Demand No. 1, Department of Agriculture and Farmers' Welfare, Expenditure Budget, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe1.pdf. 3 Demand No. 2, Department of Agriculture and Farmers' Welfare, Expenditure Budget, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe2.pdf. 4 Rashtriya Krishi Vikas Yojana, Ministry of Agriculture and Farmers' Welfare, https://rkvy.nic.in/. 5 Demand No.1, Department of Agriculture and Farmers' Welfare, Expenditure Budget, Union Budget 2023-24, https://www.indiabudget.gov.in/budget2022-23/doc/eb/sbe1.pdf.  
In 2021-22, NCDEX delivered 4.72 lakh tonnes of commodities, and represents 4 lakh farmers.99   
Agriculture Infrastructure Fund: The scheme was approved in July 2020 and it seeks to provide a medium to long term debt financing facility for creating port-harvest management infrastructure. The size of the Fund is one lakh crore rupees, and loans up to two crore rupees will receive annual interest subvention of 3% (for up to seven years).100 Eligible beneficiaries under the scheme initially included entities such as primary agricultural credit societies, marketing cooperative societies, and farmer producers' organisations.  Eligibility was extended to state agencies/APMCs, national and state federations of cooperatives, federations of farmers producers' organisations and federations of self-help groups in 2021. The scheme has been allocated Rs 500 crore in 2023-24, 233% greater than the revised estimates of 2022-23.  The scheme was allocated Rs 500 crore in 2022-23 as well.  As of January 2023, the Fund has 59,144 registered beneficiaries.  Rs 10,082 crore has been disbursed since August 2020 
across 16,000 projects.   
The Standing Committee (2019) noted that Gramin Haats (small rural markets) can emerge as a viable alternative for agricultural marketing if they are provided with adequate infrastructure facilities.82  It recommended that the Gramin Agricultural Markets scheme (which aims to improve infrastructure and civic facilities in 22,000 Gramin Haats across India) should be made a fully funded central scheme and scaled to ensure the presence of a haat in each panchayat of the country.  The central government has proposed development of basic infrastructure in Gramin Haats through the MGNREGS and of marketing infrastructure through the Agri-Market Infrastructure Fund.  As of April 2022, infrastructure has been developed in 1,351 village haats under MGNREGS.101 Subsequently, these haats will be linked to the e- NAM platform. 

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## 

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## 

81 The Draft Electricity (Amendment) Bill, 2020, Ministry of Power, April 17, 2020, https://prsindia.org/billtrack/draftelectricityamendment-bill-2020.  
'Agriculture Marketing and Role of Weekly Gramin Haats', Lok Sabha, January 3, 2019, https://loksabhadocs.nic.in/lsscommittee/Agriculture,%20Anima l%20Husbandry%20and%20Food%20Processing/16_Agricultur e_62.pdf. 83 The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, https://prsindia.org/files/bills_acts/bills_parliament/2020/Farmer s%20(Empowerment%20and%20protection)%20bill,%202020.p df. 84 The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, https://prsindia.org/files/bills_acts/bills_parliament/2020/Farmer s'%20Produce%20Trade%20and%20Commerce%20bill,%2020 20.pdf. 85 The Essential Commodities (Amendment) Act, 2020, https://prsindia.org/files/bills_acts/bills_parliament/2020/Essenti al%20Commodities%20(Amendment)%20Act,%202020.pdf. 86 The Farm Laws Repeal Bill, 2021, https://prsindia.org/files/bills_acts/bills_parliament/2021/Farm% 20Laws%20Repeal%20Bill,2021.pdf. 87 Operational Guidelines for Promotion of National Agriculture Market through Agri-Tech Infrastructure Fund, Ministry of Agriculture and Farmers' Welfare, September 2016, https://enam.gov.in/web/docs/namguidelines.pdf/ 88 Frequently Asked Questions, e-NAM, as accessed on February 11, 2023, https://enam.gov.in/web/resources/FAQs-ofeNam/. 89 Report No. 37, 'Demands for Grants 2022-23', Standing Committee on Agriculture, Animal Husbandry and Food Processing, Lok Sabha, March 24, 2022, https://loksabhadocs.nic.in/lsscommittee/Agriculture,%20Anima l%20Husbandry%20and%20Food%20Processing/17_Agricultur e_Animal_Husbandry_and_Food_Processing_37.pdf.  

90 Unstarred Question No. 2099, Lok Sabha, Ministry of 
Agriculture and Farmers' Welfare, December 20, 2023, 
https://pqals.nic.in/annex/1710/AU2099.pdf. 91 "2177 FPOs onboard eNAM Trading Module", Press 
Information Bureau, Ministry of Agriculture and Farmers' 
Welfare, August 2, 2022, 
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1847509 #:~:text=Under%20the%20e%2DNAM%20scheme,packaging% 20and%20compost%20unit%20etc. 92 Indian Agricultural Markets Policy, Challenges and Alternatives, Focus on the Global South, December 2019, https://focusweb.org/wpcontent/uploads/2020/03/Ag_Market_Report_Final.pdf. 93 Salient Features of the Model Act on Agricultural Marketing, https://agricoop.nic.in/sites/default/files/apmc.pdf. 94 Unstarred Question No. 291, Lok Sabha, Ministry of 
Agriculture and Farmers' Welfare, November 19, 2019, 
https://loksabha.nic.in/Questions/QResult15.aspx?qref=6495&ls no=17.   
95 Punjab Agricultural Produce Markets Act, 1961, http://hsamb.org.in/sites/default/files/documents/newact.doc. 96 Punjab Agricultural Produce Markets (General) Rules, 1962, http://hsamb.org.in/sites/default/files/documents/newrules_0.doc . 97 NCDEX Overview, National Commodity & Derivatives Exchange Limited, https://ncdex.com/about/ncdex-overview. 98 "Linking Farmers with Markets", Press Information Bureau, Ministry of Agriculture and Farmers' Welfare, February 4, 
2020, https://pib.gov.in/PressReleasePage.aspx?PRID=1601897. 99 Annual Report 2021-22, National Commodities and Derivatives Exchange, https://ncdex.com/downloads/Aboutus/Annual-Reports/NCDEX%20- %20Annual%20Report%202021-22.pdf 100 Unstarred Question No. 1529, Lok Sabha, Ministry of Agriculture and Farmers' Welfare, July 26, 2022, https://pqals.nic.in/annex/179/AU1529.pdf. 101 Starred Question No. 479, Lok Sabha, Ministry of Agriculture and Farmers' Welfare, April 5, 2022, https://pqals.nic.in/annex/178/AS479.pdf. 

## Demand For Grants 2023-24 Analysis Education

In India, both the central and state governments have responsibility for education.1  Both central and state governments operate schools and higher education institutions (HEIs).  The Ministry of Education formulates and implements national policies, develops plans to improve access to education and provides for scholarships. The Ministry of Education has two departments: (i) the Department of School Education and Literacy, and (ii) the Department of Higher Education.  The Department of School Education is responsible for schools such as Kendriya Vidyalayas, and Navodaya Vidyalayas.  It also funds certain schemes implemented by states such as Samagra Shiksha, which seeks to improve access to schools and overall learning outcomes, and the National Mid- Day Meal Programme.  The Department of Higher Education funds central universities, IITs, NITs, IISERs, IIMs, and Schools of Planning and Architecture, among others.  It also funds the higher education regulators, UGC and AICTE.  The Department also supports research and innovation in higher education, and provides scholarships for higher education.  This note examines the allocation to the Ministry in 2023-24, and overall financing issues in the education sector.  

## Overview Of Finances

In 2023-24, the Ministry of Education has been allocated Rs 1,12,899 crore.2  This is an increase of 13% over revised estimates for 2022-23.  The Department of School Education and Literacy has been allocated Rs 68,805 crore (61% of the Ministry's expenditure).  This is an increase of 
16.5% over the revised estimates of 2022-23.  The Department of Higher Education has been allocated Rs 44,095 crore (39% of the Ministry's expenditure), an increase of 8% over the revised estimates of 2022-23.   

## (Rs Crore)

2023-24 
 
2021-22 
Actuals 
2022-
23 RE 
BE 
% change, 
22-23 RE 
to 23-24 
BE 
School Education  
46,822 
59,053 
68,805 
16.5% 
Higher Education 
33,531 
40,828 
44,095 
8.0% 
Total 
80,352 
99,881 
1,12,899 
13.0% 

Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Demand Numbers 25 and 26, Expenditure Budget 2023- 24; PRS. 

Since 2013-14, allocation towards the Ministry of Education has increased at an annual average rate of 
4.7%.  There was a decline in the expenditure of the Ministry in 2020-21 and 2021-22, which could be due to the COVID-19 pandemic.  The revised estimates for 2022-23 are 24% higher than actuals for 2021-22 (low base). 

 
Note: RE is Revised Estimate, BE is Budget Estimate Sources: Union Budgets, 2015-16 to 2023-24; PRS. 

## Announcements In Budget Speech 2023-24

In her Budget Speech, the Finance Minister made the following announcements related to the education sector: 

Teacher Training: Teacher training will be re-envisioned 
through innovative pedagogy, continuous professional 
development, surveys, and ICT implementation.  The District 
Institutes of Education and Training will be developed as vibrant 
institutes of excellence for this purpose.  

Libraries: A National Digital Library will be set up for facilitating 
availability of quality books across geographies, languages, 
genres and devices.  States will be encouraged to set up 
physical libraries at panchayat and ward levels and provide 
infrastructure for accessing the National Digital Library. 

Higher education: Three centres of excellence for Artificial 
Intelligence will be set-up in top educational institutions. 

In 2023-24, the Samagra Shiksha Abhiyaan is 
estimated to receive the highest allocation under the 
Ministry, at Rs 37,453 crore (33% of the Ministry's 
expenditure).  This scheme funds schools run by 
states.  This is followed by allocation towards 
autonomous bodies under the Department of School 
Education and Literacy at Rs 14,391 crore (13% of 
total allocation to the Ministry).  These include 
Kendriya Vidyalalyas and Navodaya Vidyalayas.  
PM POSHAN, which provides mid-day meals in 

schools, has been allocated 10% of the Ministry's budget. 

Ministry of Education (2023-24 Budget Estimates, Rs crore) 
Major Heads 
2023-24 
BE 
% share 
of total 
Samagra Shiksha 
37,453 
33% 
Autonomous Bodies 
14,391 
13% 
PM POSHAN 
11,600 
10% 
Universities 
11,529 
10% 
IITs 
9,662 
9% 
UGC and AICTE 
5,780 
5% 
NITs and IIEST 
4,821 
4% 
PM SHRI 
4,000 
4% 
Others  
13,664 
12% 
Total 
1,12,899 
100% 

Note: Autonomous bodies include those under the Department of School Education - Kendriya Vidyalaya Sangathan, Navodaya Vidyalaya Samiti. Sources: Demand Number 25 and 26, Expenditure Budget 2023- 24; PRS. 

## Health And Education Cess

In 2018-19, a 4% Health and Education Cess on income was introduced, replacing two prior cesses, the Primary Education Cess and the Secondary and Higher Education Cess.3  The Prarambhik Shiksha Kosh (PSK) is a non-lapsable reserve fund created to receive proceeds from the Primary Education Cess, in 2005.4  It is currently used for the Samagra Shiksha Abhiyan and the Pradhan Mantri Poshan Shakti Nirman (PM POSHAN).2 
Similarly, a reserve fund called the Madhyamik and Ucchatar Shiksha Kosh (MUSK) was created to receive proceeds from the Secondary and Higher Education Cess, in 2017.5  For 2023-24, transfers from this fund are proposed to be made to (i) Sarva Shiksha Abhiyan, (ii) National Means cum Merit Scholarship Scheme, (iii) the Kendriya Vidyala Sanghatan, and (iv) the Navodaya Vidyalaya Samiti.2  Under the Department of Higher Education, it will be allocated towards PM Uchchatar Shiksha Protsahan (PM-USP) Yojna, which integrates current Interest Subsidy and Guarantee Fund contribution schemes and scholarships for higher education.2 
Historically, collections of the Primary Education Cess were underutilised, as observed by the then- Standing Committee on Human Resource Development in 2018.6  Collections of the Primary Education Cess between 2004-05 and 2016-17 amounted to Rs 1,92,770 crore, of which Rs 13,113 
crore (6.8%) was not utilised.6   
In 2018-19 and 2019-20 the Comptroller and Auditor General (CAG) found that no principles had been applied for the sharing of collections of the Health and Education cess (Rs 41,309 crore) between the education and health sectors.7,8  Though proceeds had been allocated for transfer in 2018-19 
and 2019-20 (Rs 12,608.98 crore and Rs 14,460 crore, respectively), no transfer was made to MUSK 
since it had not been made operational.7,8  However, in both years, cess collections were directly spent on heads that were intended to be supported from the fund.7,8  This amounted to Rs 11,632 crore in 2018-
19, and Rs 974 crore in 2019-20.  In 2019-20, Rs 28,920 crore was allocated for the PSK, but only Rs 
26,848 crore was transferred.8  In 2020, the CAG 
concluded that there was no mechanism to ensure that cess collections would be appropriately utilised.7 
In 2020-21, cess collections amounted to Rs 35,821, from which Rs 20,567 crore was allocated towards MUSK.  However, the CAG found that no transfer was made since the accounting procedure for the fund had not yet been finalised.9  The Ministry of Finance ordered that 75% of cess collections are to be utilised in the education sector from that year.9   
Data from budget documents reveals that for four of six years for which the cess has been collected, including 2023-24 budget estimates, the amount transferred to both education reserve funds is less than 75% of the cess collections (See Figure 2).10 However, as per revised estimates for 2022-23, the amount transferred to the reserve funds is higher than the 75% share of cess collections in that year. 

As per revised estimates for 2022-23, Rs 24,350 crore will be transferred to MUSK, and Rs 38,000 crore will be transferred to PSK.  Budget estimates for 2023-24 are lower; PSK will receive Rs 30,000 
crore, and MUSK will receive Rs 12,000 crore. Overall investment in education falls short of policy targets Back in 1964-66, the Education Commission had undertaken a broad review of education in India and set a target of investing 6% of India's GDP towards education, from both central and state governments.11  This target has been retained in multiple successive National Policies on Education, including the National Education Policy, 2020 (NEP).12  However, this target has never been met. In 2022-23, states and centre together estimated to spend about Rs 7.6 lakh crore on education, which is about 2.9% of India's GDP.13  Overall allocation towards education has been around 2.8% to 2.9% of the GDP since 2015.13  This is low in comparison to countries such as Brazil (6.0% in 2019), South Africa, (6.6% in 2021), Indonesia (3.5% in 2020).14 The 15th Finance Commission had also noted that poorer states such as Bihar, Jharkhand and Uttar Pradesh lag in their key human development parameters related to education.  Their per capita expenditure on education remains low.  For example, in 2022-23 (budget estimates) Uttar Pradesh spent Rs 3,205 per capita on education, Bihar spent Rs 3,245 and Jharkhand spent Rs 3,626. The average per capita expenditure by larger states on education that year was about Rs 5,300.  In 2022- 23, states on average spent about 14.8% of their budget on education. 

## Department Of School Education And Literacy

In 2023-24, the Department of School Education has been allocated Rs 68,805, which is an increase of 
17% over the revised estimate for 2022-23.  In 2020-21, and 2021-22, the actual expenditure of the Department declined due to the COVID-19 pandemic during which schools were shut. In 2023-24, majority of the Department's allocation (54%) is towards the Samagra Shiksha Abhiyaan at Rs 37,453 crore.  Autonomous bodies under the Department will receive Rs 14,391 crore, 21% of the Department's expenditure.  This includes bodies such as the Kendriya Vidyalaya Sanghatan (KVS), the Navodaya Vidyalaya Samiti (KVS), and CBSE. The Pradhan Mantri Poshan Shakti Nirman (PM- POSHAN) programme is estimated to receive Rs 11,600 crore, which accounts for 10% of the Department's estimate.  Table 3 shows the key expenditure heads for the department. 

% Change 
(RE to 
Major Heads 
Actual 
2021-22 
2022-
23 RE 
2023-
24 BE 
BE) 
Samagra Shiksha 
25,061  32,152  37,453  
16% 
Autonomous Bodies* 
10,933  12,859  14,391  
12% 
PM POSHAN** 
10,231  12,800  11,600  
-9% 
PM SHRI*** 
- 
- 
  4,000  
- 
NCERT 
320  
405  
519  
28% 
Others 
  25  
537  
478  
-11% 
252  
300  
364  
21% 
National Means cum Merit Scholarship Scheme Total 
46,822  59,053  68,805  
17% 

Note: * includes Kendriya Vidyalas, Navoldaya Vidyalayas, and CBSE; ** includes the Mid-day Meal Scheme; ***is allocated towards 15,000 schools of excellence under the NEP. 

With regard to school education, the National Education Policy, 2020 (NEP) seeks to: (i) restructure curricula and pedagogy, including early childcare; (ii) set up and plan the achievement of targets for basic literacy and numeracy; and (iii) achieve universal access to education.12   
 
 Sources: Union Budgets, 2015-16 to 2023-24; PRS.

## Samagra Shiksha Abhiyan

The Samagra Shiksha Abhiyan is the flagship scheme of the Department of School Education, and focuses on achieving universal access to school education as envisaged in the NEP.  It subsumed (i) Sarva Shiksha Abhiyan, which sought to achieve universal primary education; (ii) the Rashtriya Madhyamik Shiksha Abhiyan, which targeted increasing enrolment in secondary education, and (iii) Teacher Education initiatives, which sought to improve and maintain the competency of teachers.15 A major part of the scheme is the upgradation of school infrastructure, ranging from educational facilities such as science labs, to facilities for health and hygiene such as drinking water taps and toilets.15  Other infrastructural components are directed at improving physical accessibility, such as adding ramps.15 
Key pedagogical components of the scheme include the National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN) Bharat Mission, which seeks to achieve the NEP's goal of Foundational Literacy and Numeracy (FLN).15,16  
The National Initiative for School Heads and Teachers Holistic Advancement (NISHTHA), is a teacher training programme under the scheme, which has expanded online due to the COVID-19 
pandemic.16  The Scheme provides support for differently abled children in the form of accessible course material such as Braille textbooks, and monetary support for children with special needs.16  
The Scheme also funds monitoring of the progress of educational achievement through the National Achievement Survey and a study of FLN, the Foundational Learning Study (FLS).16  The scheme has been allocated Rs 37,453 crore in 2023-24.  

## Pm Schools For Rising India (Pm-Shri)

Under this scheme, 14,500 PM-SHRI schools are intended to serve as exemplar schools in terms of NEP objectives.17  The scheme will cover a fiveyear period from 2022-23 to 2026-27.18  Over this period, it is estimated to have a total project cost of Rs 27,360 crore, of which Rs 18,128 crore will be contributed by the central government.18
  For 2023-
24, the scheme has been allocated Rs 4,000 crore.

2 
Pradhan Mantri Poshan Shakti Nirman (PM- POSHAN) 
PM-POSHAN, previously the Mid-Day Meal Scheme, provides cooked mid-day meals to eligible children in schools operated or aided by central, state or local governments.19  The scheme intends to improve nutritional status of children while encouraging them to participate in school education.19  The scheme has statutory backing 
 
under Section 5 of the National Food Security Act, 2013.20  The scheme has been allocated Rs 11,600  
crore in 2023-24.  

## Participation In Secondary School Education Continues To Be Low

One of the key concerns in the last three years has been the impact of the pandemic and ensuing school closures on enrolment of children in schools and the learning levels.  Enrolment, referring to the participation of children in the school education system, has been a key issue which education policy has sought to address.12  Even with schools shutting down during the pandemic, enrolment at the primary level continues to be 103%.21 As per the Unified District Information System For Education Plus (UDISE+) statistics, which include schools managed by both governments and private entities, enrolment rates were higher in 2021-22 than in 2020-21. 21  Where age groups correspond to education levels in India, Gross Enrolment Ratio (GER) refers to the percentage of a given age group that is enrolled in school for a given education level.21  Since children from both below and above a given age group may enrol for the corresponding education level, it is possible for GER to be greater than 100%.  While GER is above 100% in primary education (for both boys and girls), it drops off sharply after the primary education level (see Figure 4).  In 2021-22, GER is 103.4% at the primary level; it falls to 94.7% at the upper primary level (Classes 6-8), and falls further to 79.6% at the secondary level (Classes 9-10).21  
Sources: Chapter 6, Economic Survey 2022-23, Budget 2023-24; PRS. 

Dropout rates measure the percentage of children who drop out from a given cohort, for a given year. Dropout rates increase with an increase in the level of education.  While the dropout rate for secondary education have marginally reduced, it is still high as compared to primary and upper primary levels.  In 2021-22, dropout rates were 1.5% for primary education, 3% for upper primary education, and 
12.6% for secondary education.21 
UDISE+ data shows that the percentage of children enrolled in government schools and governmentaided schools increased during the pandemic, from 
76% in 2019-20 to 79.6% in 2021-22 (Figure 5).21   
Transition rates illustrate the proportion of children that are able to transition from one education level to another.  In 2021-22, 93% of children transition to upper primary school.  Of those, 89% make it to secondary school.  The transition rate from secondary to reach upper secondary education is 
78% (see Figure 6).21 
 
Sources: UDISE+ Flash Statistics, 2021-22; PRS. The 75th Round of the National Sample Survey, conducted between 2017 and 2018, reveals that the largest cause of female student drop outs is engagement in domestic activities (30.2%).22  For male students, the largest cause is engagement in economic activities (36.9%).22  This suggests continued correlation between dropout and socioeconomic pressures forcing students to work. One of the goals of PM-POSHAN is to create 
 
 
incentives that reduce dropout rates by reducing economic pressure and assuring a degree of food security.19  PM-POSHAN has been allocated Rs 
11,600 crore in 2023-24.  This is 9% lower than the revised estimate for 2022-23. In 2022, the Standing Committee on Education, Women, Children, Youth and Sports observed persistence of inequities in access to education between social groups.23  It recommended that the Department of School Education and Literacy conduct a survey to identify districts in which dropout rates are higher (relative to the national average) among girls, as well as children of both genders belonging to Scheduled Castes and Scheduled Tribes.23  This survey could then be used to draft an intervention plan to not only help the children complete their education, but also take vocational training.  Financial assistance for out of school children of two thousand rupees per annum has been provided since 2021-22 to address this, and special training is provided to help them return to age-appropriate education levels.24 UDISE+ data shows that the percentage of children enrolled in government schools and governmentaided schools increased during the pandemic, from 
78% in 2019-20, to 83% in 2021-22.21   

## Pandemic Had An Impact On Learning Outcomes

While the pandemic did not significantly affect enrolment and dropout rates, it may have impacted learning outcomes.  The National Achievement Survey (NAS) is conducted among students at Classes 3, 5, 8, and 10.25,26  It measures learning ability in mathematics and languages, and also in physical and social sciences for older age groups. Scores are given on a scale from 0 to 500.  The survey found that between 2018 and 2021, across all levels, scores declined in all subjects except Modern Indian Language and English for Class 10 (see Figure 7).25 ,27  
NAS data also shows that there is significant variation between states.  For example, some states score relatively high on Class 3 mathematics skills, such as Punjab (339) and Tamil Nadu (304); others score lower, such as Telangana (278) and Meghalaya (279).25   
 

## Nipun Bharat

To address issues of educational achievement, the NIPUN Bharat Mission was launched in July 2021.28  It aims to achieve the NEP objective of universal foundational literacy and numeracy (FLN) among children up to Class 3 who have not achieved it, by 2026-27.16  The Mission will involve setting of state-level and national targets for literacy and numeracy, and providing support in the form of funding and guidance to states, as well as development of curricula and digital tools.16 
States will be responsible for annual plans, implementing the scheme and systems for monitoring progress, and overseeing appointment and training of sufficient teachers.16  As of December 2022, a Foundational Learning Study had been conducted to ascertain the level of literacy and numeracy in primary school children, and online resources for teachers had been made available via a portal called 'DIKSHA'.29  Further, almost 12 lakh teachers have undergone training under the Mission.29  As of February 2023, all states had initiated in-person training except Andhra Pradesh, Chhattisgarh, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Odisha, Punjab, and West Bengal.30 
In 2023-24, the Ministry has allocated Rs 800 crore for Strengthening Teaching-Learning and Results for States.  This seeks to support states in developing, implementing and improving interventions that help improve learning outcomes, and school to work transition strategies to improve labour outcomes.  As per the revised estimates of 2022-23, this programme will receive an allocation of Rs 400 crore. Many efforts to bridge the learning gap needed to be undertaken by state governments, due to inter-state variation in the severity of the pandemic, and variations in lockdown duration.31  However, the National Council for Educational Research and Training (NCERT) developed alternative academic calendars to guide states in facilitating children's return to school.32  NCERT also developed learning materials, such as "Vidya Pravesh" guidelines, to help children in pre-school attain the skills necessary to enter Class 1.33  Other material was developed by NCERT to help bridge the learning gap among students who did not have access to digital devices, such as the "Students Learning Enhancement Guidelines".34 

## Schools Still Lack Human And Infrastructural Capacity

In 2021-22, there were about 14.9 lakh schools in India.13  While infrastructure in schools has improved over the years, some basic infrastructure is still lacking.  As on 2021-22, 97.5% of the schools had a girl's toilet, and 96.2% schools had a boy's toilet.  87% of schools had a library/reading corner, and 89% of the schools have access to electricity.  Only 47.5% of the schools had a computer, and 34% had internet. The primary responsibility of maintaining school infrastructure is with the state governments. However, the Ministry of Education launched the PM Schools for Rising India (PM SHRI) scheme in September 2022 to equip schools with modern infrastructure and showcase the implementation of the NEP.18  The scheme will be implemented in 14,500 selected existing schools.18  The scheme has been allocated Rs 4,000 crore in 2023-24. The NEP has set a goal of having an average pupilteacher ratio of 30:1.12  Data from UDISE+ shows that at the all-India level, this target has been achieved, with a ratio of 26:1 in primary schools, 19:1 in upper primary schools, 17:1 in secondary schools, and 27:1 at the higher secondary level. Only Bihar and Delhi did not meet this target at the primary level (53:1 and 33:1 respectively), and only Delhi missed the target at the upper primary level (32:1).  At the secondary level, Bihar and Jharkhand have ratios of 54:1 and 34:1 respectively.  At the higher secondary level, six states have high ratios; these are Bihar (62:1), Jharkhand (57:1), Uttar Pradesh (38:1), Maharashtra (38:1), Odisha (35:1), and Andhra Pradesh (31:1). 

## Department Of Higher Education

The Department of Higher Education has been allocated Rs 44,095 crore for 2023-24, an increase of 8% over the revised estimates for 2022-23.  As with the Department of School Education, the actual expenditure by the Department of Higher Education also declined in the years 2020-21 and 2021-22. 

Note: Revised Estimate has been used for 2022-23; For 2023-24, % change in allocation is 2023-24 BE over 2022-23 RE.  
Sources: Union Budgets, 2015-16 to 2023-24; PRS. 

Expenditure towards the three largest components of the allocation to the Department are estimated to increase by less than 5% over revised estimates for 2022-23.  The first of these are grants to central universities, which will receive an estimated Rs 11,529 crore (4% increase).  The second is allocation for the Indian Institutes of Technology (IITs), which are estimated to receive Rs 9,662 crore (3% increase).  Finally, statutory and regulatory bodies under the Department will receive an estimated Rs 5,780 crore (4% increase).  These bodies include the University Grants Commission (UGC), which regulates universities (including setting standards) and allocates funds to them.35  It also includes the All-India Council for Technical Education (AICTE), which regulates, funds, and plans the development of institutions for technical and management education.36  Table 4 shows the key heads of expenditure for the department. With regard to higher education, the NEP seeks to achieve the following: (i) establishment of at least one large multi-disciplinary higher education institution in every district, (ii) equitable access to higher education, (iii) an increase in research capacity and output, and (iv) expansion of vocational training.12 

% 
Major Heads 
2022-
23 RE 
2023-
24 BE 
Change 
(RE to 
Actual 
2021-
2022 
BE) 
Grants to Central Universities 
8,750  11,034  11,529  
4% 
Indian Institutes of Technology 
8,082  
9,345  
9,662  
3% 
5,029  
5,551  
5,780  
4% 
Statutory/Regulatory Bodies (UGC and AICTE) 
3,485  
4,444  
4,821  
8% 
National Institutes of Technology (NITs) and IIEST Student Financial Aid 
1,872  
1,813  
1,954  
8% 
World Class Institutions 
1,046  
1,200  
1,500  
25% 
1,032  
1,398  
1,462  
5% 
Indian Institute of Science, Education and Research (IISERs) Indian Institutes of Management 
651  
608  
 300  
-51% 
407  
488  
 560  
15% 
Indian Institutes of Information Technology(IIITs) Others 
3,176  
4,948  
6,528  
32% 
Total 
33,531  40,828  44,095  
8% 

Expenditure Budget, 2023-24, PRS. 

## Vacancies And Shortfall In Faculty Positions

As of April 2022, there were 6,549 faculty positions vacant in central universities, a slight increase over April 2021 (6,136 vacancies) and April 2020 (6,318 vacancies).37  Including other institutions under the central government, such as IITs, IIMs, and NITs, vacancies amounted to 13,812 vacant teaching posts. 38  The Standing Committee on Education, Women, Children, Youth and Sports recommended that special recruitment drives be conducted to recruit faculty.38  It also recommended that the Department of Higher Education review the process of recruitment, assessment, and promotion of academic faculty, such that it rewards research contributions.40 

## Socio-Economic Disparity In Participation In Higher Education

The NEP sets a target of 50% GER in higher education, to be achieved by 2035.12  As of 2020-21, GER in higher education (for the age group 18-23) is 27.3%.39  GER in higher education has been gradually increasing; it was 25.6% in 2019-20, and 
24.9% in 2018-19.39  As on 2020-21, about 4.1 crore students were enrolled in higher education (2.1 crore male, and 2 crore female).13   
However, there are disparities in GER across states. States with relatively high GER include Tamil Nadu (45.4%), Uttarakhand (42.8%), and Manipur (36.9%).  States with relatively low GER include Jharkhand (12.4%),  Nagaland (15.4%), and Chhattisgarh (14.1%).39 
Enrolment rates also vary across social groups. Enrolment rates for people belonging to Scheduled Castes (SCs) and Scheduled Tribes (STs) are lower than the all-India GER.  However, GER has been increasing for all groups over time (see Figure 9). AISHE data also reveals that gender disparity has reduced over time.  The Gender Parity Index (GPI) is a measure for the average of the number of female students for every male student enrolled in higher education, such that a GPI of 1 means that equal numbers of men and women are enrolled.  Across all students as well as for members of Scheduled Castes and Scheduled Tribes, GPI has improved from below 1 in 2016-17 to above one in 2020-21. (See Figure 10). There is significant variation between states in the cost of education.  Data from between June 2017- and July 2018 collected in the National Sample Survey shows that average annual expenditure towards technical or professional education can be as high as Rs 72,959 for Uttar Pradesh, and as low as Rs 20,656 for Assam, with Haryana and Himachal Pradesh being roughly in the middle with Rs 42,224 and Rs 40,774 respectively.   
In 2022, the Standing Committee on Education, Women, Children, Youth and Sports observed that student financial aid schemes were not sufficient to cover the cost of higher education.38  This is because most expenditure from the scholarship is towards course fees.38  The Committee recommended that the Department conduct a study of expenditure from scholarship allocations, as well as a comparative study of schemes offered by other departments and ministries to benefit members of Scheduled Castes, Scheduled Tribes.  This study should be used to develop a coordination mechanism with these departments and ministries.38  
In 2023-24, the allocation to Student Financial Aid under the Department is Rs 1,954 crore.  This is an increase of 8% over the revised estimates of 2022- 23.  This includes an allocation to the PM Research Fellowship. The largest component of student financial aid is the PM Uchchatar Shiksha Protsahan (PM-USP) Yojna, which has been allocated Rs 1,554 crore.2  It subsumes three prior heads, the largest of which includes subsidies for interest payments for education loans, and a fund for guarantees against defaults.  Other heads subsumed under PM-USP are scholarships for college and university students (scholarship is provided to 2% of students passing out from schools to pursue higher education), and special scholarships for students from Jammu and Kashmir.2  The allocation for PM-USP is only 3% 
higher than the total of revised estimates for the subsumed heads. Note that in 2022-23, the allocation for Student Financial Aid at the revised estimates stage (Rs 1,813 crore) is 13% lower than the budget estimate (Rs 2,078 crore).  This is mostly due to a 24% decrease in interest subsidies and guarantee fund contributions. 

## More Enrolment In Private Institutions Which Tend To Be More Expensive

As of 2020-21, 65% of college enrolments are in privately run colleges.39  The 75th Round of National Sample Survey shows that higher education is more expensive in private institutions, at both the graduate and post-graduate level (2017-18).  At the graduate level, average expenditure is (i) Rs 19,972 in unaided private institutions, (ii) Rs 16,769 in private institutions that receive government grants, and (iii) Rs 10,501 in institutions run by central, state, or local governments (see Figure 11).22 Publicly funded and operated higher education institutes play a role in making higher education affordable.  The Standing Committee on Education, Women, Children, Youth and Sports recommended auditing HEIs as per the standards applied to notfor-profit institutions and implementing policy measures to incentivise donations towards them.40 
Source: "Key Indicators of Household Social Consumption on Education in India, NSS 75th Round (2017-18)", Ministry of Statistics and Programme Implementation 

## After Higher Education - Workforce Participation And Research Employability

The Economic Survey 2022 noted that impetus must be given to education and skilling to match the requirements of modern industry.  One of the goals under NEP is to integrate vocational education with general education and making vocational education more mainstream.  Workforce participation rate refers to the percentage of the population aged 15 and above that are employed.  With the NEP suggesting increasing the GER for higher education to 50%, which is almost twice as the current levels, employability and availability of jobs for these graduates remains a key challenge. Data from the Annual Labour Force Participation Survey 2020-21 reveals that workforce participation rates for graduates, while improving over previous four years, are still low.41  For graduates, workforce participation rate stands at 51.8% in 2020-21; this includes diplomas and certificate courses equivalent to graduate-level courses.41  People whose highest level of education is a diploma or certificate course below graduate-level have the highest workforce participation rate of 64.2%.41  People who have completed post-graduate study or above have a workforce participation rate of 59.4%.41   
These disparities are more pronounced between genders.  For example, the difference between workforce participation rates for females and males is 40% among people whose highest educational qualification is at the higher secondary level, but it widens to 49% for graduates (see Figure 12). In 2021, the Standing Committee on Education, Women, Children, Youth and Sports recommended that UGC introduce an internship component in B.A., B.Sc., and B. Com courses to increase the employability of graduates. 42  The UGC subsequently published draft guidelines for research internships in May 2022, with the stated goal of promotion of research in higher education institutes as per the NEP.43  The draft guidelines propose that internships may serve to improve either research aptitude or employability.44 
 
Sources: Periodic Labour Force Survey (PLFS) - Annual Report [July 2020 - June 2021], Ministry of Statistics & Programme Implementation; PRS. Other schemes to improve employability aim to do so by providing vocational training.  The National Apprenticeship training scheme provides technically qualified youth, with engineering qualifications, diplomas, or vocational course graduates, with practical experience in a professional environment.2,45  The scheme has been allocated Rs 
440 crore in 2023-24 budget estimates, a 10% increase over revised estimated for 2022-23. 

## Research

Other policy efforts are directed at improving research skills.  The Multidisciplinary Education and Research Improvement in Technical Education (MERITE) programme focuses on improving research skills and marketability in technical education.46  Part of the goal of the programme is to improve access to technical education among members of socio-economically disadvantaged groups, such as people belonging to Scheduled 
4 "Creation of Non-lapsable Fund for Elementary Education Approved", Press Information Bureau, Cabinet, October 6, 2005, https://pib.gov.in/newsite/erelcontent.aspx?relid=12567. 5 "Cabinet approves creation of a single non-lapsable corpus fund for Secondary and Higher education from the proceeds of Cess for Secondary and Higher Education levied under Section 136 of Finance Act, 2007", Press Information Bureau, Cabinet, August 
16, 2017, https://pib.gov.in/PressReleasePage.aspx?PRID=1499914. 6 Report No. 305, Standing Committee on Human Resource Development, on "Demands for Grants 2018-19 (Demand No. 57) of the Department of School Education & Literacy", Rajya Sabha, March 9, 2018, http://164.100.47.5/committee_web/ReportFile/16/98/305_2018_ 6_17.pdf. 7 Report No. 4 of 2020 - Financial Audit of Accounts of the Union Government for the year 2018-19, Comptroller and Auditor General of India,  August 4, 2020, https://cag.gov.in/webroot/uploads/download_audit_report/2020/ Report%20No.%204%20of%202020_Eng- 05f808ecd3a8165.55898472.pdf. 8 Report No. 7 of 2021, - Financial Audit of Accounts of the Union Government for the year 2019-20, Comptroller and Auditor General of India, July 16, 2021, https://cag.gov.in/uploads/download_audit_report/2021/Report% 20No.%207%20of%202021_English_(12-7-2021)- 061a4c5a0ceebc7.43031638.pdf. 9 Report No. 31 of 2022 -  Financial Audit of Accounts of the Union Government for the year 2020-21, Comptroller and Auditor General of India, December 21, 2022, https://cag.gov.in/uploads/download_audit_report/2022/DSC- Report-No.-31-of-2022_UGFA-English-PDF-A- 063a2f3ee1c14a7.01369268.pdf. 10 Receipt Budget 2023-24; Demand No. 25, Expenditure Budget 2023-24; Demand No. 26, Expenditure Budget 2023-24 11 Report of the Education Commission, Ministry of Education 1964-66, http://14.139.60.153/handle/123456789/61. 12National Education Policy 2020, Ministry of Education, https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_ Final_English_0.pdf. 

Castes and Scheduled Tribes.46  The programme will involve improving curricula, faculty training, and improving facilities (including digital infrastructure) in engineering colleges.46  To encourage research, the scheme  will create a competitive research fund, to encourage research on specific areas, such as climate change.46  The programme is aided with borrowing from World Bank.2  It is estimated to receive Rs 100 crore in 
2023-24, and nine crore rupees in 2022-23 as per revised estimates.

14 "UIS.Stat Bulk Data Download Service", UNESCO Institute for Statistics (UIS), https://apiportal.uis.unesco.org/bdds, (accessed on February 16, 2023) 15 "Samagra Shiksha An Integrated Scheme For School Education Framework For Implementation", Ministry of Education, October 12 2022, https://samagra.education.gov.in/docs/ss_implementation.pdf. 16 National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN) Bharat Guidelines for Implementation, 2021, Ministry of Education, https://www.education.gov.in/sites/upload_files/mhrd/files/nipun _bharat_eng1.pdf. 17 "About PM SHRI School", Department of School Education and Literacy, accessed on February 15, 2023, https://pmshrischools.education.gov.in/about-us. 18 "Cabinet approves a new centrally sponsored Scheme - PM 
SHRI Schools (PM ScHools for Rising India)", Press Information Bureau, Department of School Education and Literacy, September 2, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1857409. 19 Pradhan Mantri Poshan Shakti Nirman (PM POSHAN) Guidelines, Department of School Education and Literacy, December 21, 2022, https://pmposhan.education.gov.in/Files/Guidelines/2023/Guideli nes%20on%20PM%20POSHAN%20SCHEME.pdf. 

20 Sub-Section (b), Section 5, The National Food Security Act, 2013, https://legislative.gov.in/sites/default/files/A2013-20.pdf. 21 Unified District Information System for Education+ Annual Report 2021-22, Ministry of Education, https://dashboard.udiseplus.gov.in/#/reportDashboard/sReport. 22 "Key Indicators of Household Social Consumption on Education in India, NSS 75th Round (2017-18)", Ministry of Statistics and Programme Implementation, http://microdata.gov.in/nada43/index.php/catalog/151/download/ 1937. 23 Report No. 336, Standing Committee on Education, Women, Children, Youth and Sports, on "Demands for Grants 2022-23 of the Department of School Education & Literacy", March 16, 2022, Rajya Sabha, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/16/162/336_2022_3_15.pdf. 24 Report No. 343, Standing Committee on Education, Women, Children, Youth and Sports, on "Action Taken by the Government on the Recommendations/Observations contained in the Three Hundred Thirty Sixth Report on Demands for Grants 2022-23 of the Department of School Education & Literacy, Ministry of Education", Rajya Sabha, December 19, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/16/167/343_2022_12_15.pdf. 25 "National Achievement Survey National Report Card NAS 
2021, Class III, V, VIII, &X", Ministry of Education, https://nas.gov.in/download-national-report. 

 
26 "Learning Achievement of Students, Class X (Cycle 2), NAS 
2018", Ministry of Human Resources Development, https://nas.gov.in/assets/front/National-Report-Card-2017.zip. 27 NAS 2017: National Achievement Survey, Class : III, V and VIII. https://nas.gov.in/assets/front/National-Report-Card- 2017.zip. 28 "Union Education Minister to launch NIPUN Bharat tomorrow", Press Information Bureau, Ministry of Education, July 4, 2021, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1732597. 29 Lok Sabha Unstarred Question No. 1863, Ministry of Education, December 19, 2022, https://pqals.nic.in/annex/1710/AU1863.pdf. 30 "National Level Data", NISHTA Portal, National Council of Educational Research and Training, accessed February 19, 2023, https://itpd.ncert.gov.in/mss/nishthadashboard/dashboardprint.ph p. 31 Report No. 342, Standing Committee on Education, Women, Children, Youth and Sports, on "Action Taken by the Government on the Recommendations/Observations contained in the Three Hundred Twenty Eighth Report on Plans for Bridging the Learning Gap caused due to School Lockdown as well as Review of Online and Offline Instructions and Examinations and Plans for Re-Opening of Schools", December 19, 2022, Rajya Sabha, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/16/167/342_2022_12_15.pdf. 32 Alternative Academic Calendar", National Council of Educational Research and Training, accessed February 19, 2022, https://ncert.nic.in/alternative-academic-calendar.php. 33 "Vidya Pravesh: Guidelines for Three-month Play-based School Preparation Module for Grade I", National Council of Educational Research and Training, January 2022, https://ncert.nic.in/pdf/VidyaPravesh_Guidelines_GradeI.pdf. 34 "Students' Learning Enhancement Guidelines", National Council of Educational Research and Training, https://ncert.nic.in/pdf/announcement/Learning_%20Enhancemen t_Guidelines.pdf. 35 The University Grants Commission Act, 1956, https://www.ugc.ac.in/oldpdf/ugc_act.pdf. 

36 All India Council for Technical Education Act, 1987, https://www.aicte-india.org/downloads/aicteact.pdf. 37 Lok Sabha Unstarred question No. 134, Ministry of Education, July 25, 022, https://pqals.nic.in/annex/179/AU1354.pdf. 38 Report No. 337, Standing Committee on Education, Women, Children, Youth and Sports, on "Demands for Grants 2022-23 of the Department of Higher Education", Rajya Sabha, March 16, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/
ReportFile/16/162/337_2022_3_15.pdf.  
39All India Survey of Higher Education 2020-21, Department of Higher Education, Ministry of Education, https://aishe.gov.in/aishe/BlankDCF/AISHE%20Final%20Report %202020-21.pdf. 40 Report No. 341, Standing Committee on Education, Women, Children, Youth And Sports, On "Review of Education Standards, Accreditation Process, Research, Examination Reforms and Academic Environment in Deemed/ Private Universities/Other Higher Education Institutions", Rajya Sabha, July 4, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/16/162/341_2022_7_14.pdf. 41 Annual Report, Periodic Labour Force Survey (PLFS) (July 2020 - June 2021), Ministry of Statistics and Programme Implementation, https://dge.gov.in/dge/sites/default/files/2022- 07/Annual_Report_PLFS_2020-21_0_0.pdf 42 Report No. 324, Standing Committee on Education, Women, Children, Youth and Sports, on "Demands for Grants 2021-22 of the Department of Higher Education", March 9, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/16/144/324_2021_7_13.pdf. 43 No.: l-512021(NEP/Desk-Parl.), University Grants Commission, May 12, 2022, https://www.ugc.ac.in/pdfnews/6119071_Public-Notice_002.pdf. 44 Draft Guidelines for Research Internship with Faculty and Researchers at Higher Education Institutions/Research Institutions, University Grants Commission, https://www.ugc.ac.in/pdfnews/1887287_Rsearch-Internship- Guidelines-120522.pdf 45 "Overview", National Apprenticeship Training Scheme (NATS) Instituted by Boards of Apprenticeship Training / Practical Training, Ministry of Education, accessed on February 20, 2023, http://portal.mhrdnats.gov.in/about-us. 46 "Multidisciplinary Education and Research Improvement in Technical Education (MERITE) Project Information Document 
(PID)", World Bank, August 15, 2022, https://documents1.worldbank.org/curated/en/099105108162230
978/pdf/P17791700c9b5e060b98a0b48ec578417f.pdf. 

 

## Demand For Grants 2023-24 Analysis Telecommunications

The Department of Telecommunications under the Ministry of Communications is responsible for promotion and regulation of the telecom sector. The Department also administers several public sector undertakings involved in providing telecommunication services, consultancy, and equipment manufacturing.  This note examines the allocation to the Department in 2023-24, trends in expenditure over the last few years, and discusses certain key issues in the sector. 

## Overview Of Finances Expenditure1

In 2023-24, the Department has been allocated Rs 97,579 crore, an increase of 19% over the revised estimates of 2022-23 (Table 2).  The allocation to the Department in 2023-24 is 2.2% of the total budget of the central government.  As compared to 2021-22, a significantly higher allocation has been made in both 2022-23 and 2023-24 mainly for financial support to BSNL.  Support to BSNL has been announced in two tranches: (i) revival plan for BSNL and MTNL approved by the Cabinet in October 2019 and (ii) revival package for BSNL amounting to Rs 1.64 lakh crore approved by Cabinet in July 2022.2,3 The 2019 revival plan sought to provide for: (i) capital infusion for allotment of 4G spectrum, and (ii) costs towards voluntary retirement scheme. The budgetary trend shows that while funds were provided for the voluntary retirement scheme, 

Head 
2020-21 
2021-22 
2022-23 
2023-24 
Budget 
Actual 
Budget 
Actual 
Budget 
Revised 
Budget 
Capital Infusion in BSNL 
14,115 
0 
14,115 
0 
44,720 
33,269 
52,937 
Implementation of VRS (BSNL/MTNL) 
3,295 
3,028 
3,000 
3,473 
3,300 
3,300 
2,671 
Grants for payment of GST-BSNL 
2,541 
0 
2,541 
 
3,550 
0 
2,218 
Viability Gap Funding 
- 
- 
- 
- 
- 
18,127 
1,740 
Waiver of Guarantee Fee 
- 
- 
- 
- 
- 
73 
174 
9,889 
11,162 
- 
- 
- 
- 
- 
Ex-gratia payment to voluntarily retiring employees (BSNL/MTNL) Capital infusion for 4G spectrum-MTNL 
6,295 
0 
6,295 
0 
- 
- 
- 
Grants for payment of GST-MTNL 
1,133 
0 
1,133 
0 
- 
- 
- 
Total 
37,268 
14,190 
27,084 
3,473 
51,570 
54,769 
59,740 

Sources: Union Budget Documents of various years; PRS. 

  
| 2022-23      | 2023-24    |
|--------------|------------|
| 2021-22      |            |
| 2022-23      |            |
| % change     |            |
| (22-23 RE to |            |
| BE           | RE         |
| 23-24 BE)    |            |
| Revenue      | 28,471     |
| Capital      | 3,328      |
| Total        |            |

Note: RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Budget, Union Budget 2023-24; PRS. 

no capital infusion took place in either 2020-21 or 2021-22 (Table 1).  The 2022 revival package reiterates the allotment of spectrum.  It includes: (i) allocation of spectrum for ongoing and 4G services worth Rs 44,993 crore, (ii) settlement of statutory dues worth Rs 33,404 crore by conversion into equity, (iii) financial support for capital expenditure worth Rs 22,471 crore over four years, and (iv)    Rs 13,789 crore as viability gap funding for rural wireline operations between 2014-15 and 2019-20.3 As per the revised estimates for 2022-23, capital infusion of Rs 33,269 crore is expected in BSNL. In addition, capital infusion of Rs 52,937 crore has been proposed in 2023-24.  In 2022-23, while capital infusion has been revised down as compared to the budget stage, viability gap funding of Rs 18,127 crore has been added at the revised stage.  In 2023-24, Rs 1,740 crore has been allocated towards viability gap funding.  In contrast with the revival plan, no funds have been given to MTNL for 4G spectrum in any of the years. 

## Major Expenditure Heads

In 2023-24, about 56% of the total expenditure is allocated towards support to PSUs.  As discussed earlier, this mainly comprises the expenditure towards the revival plan for BSNL.  Pension expenditure is estimated to have the second-largest share in 2023-24 (19%).  The pension provision is for pensionary benefits of the employees of the Department including employees absorbed in BSNL, and employees of MTNL with effect from April 2014.1  Pension obligation is expected to increase sharply in 2022-23 as compared to the previous year (31% increase over 2021-22).  This may be due to employees of BSNL and MTNL opting for voluntary retirement scheme under the 2019 revival plan.4 In 2023-24, the allocation towards Bharatnet and compensation to telecom service providers (TSPs) are expected to increase significantly as compared to the previous year.  However, in 2022-23, allocation to these schemes have been revised down by 79% and 31%, respectively.  Bharatnet is the scheme which aims to connect all villages with optical fibre network.  Compensation is provided to TSPs for augmentation of infrastructure in rural and remote areas, and maintenance of village public telephones. 

| Expenditure    | 2022-23    | 2023-24    |
|----------------|------------|------------|
| % change       |            |            |
| (22-23 RE to   |            |            |
| Head           |            |            |
| 2021-22        |            |            |
| Actual         | RE         | BE         |
| 23-24 BE)      |            |            |
| Support to     |            |            |
| PSUs           |            |            |
| 3,964          | 55,267     | 60,110     |
| Pension        | 14,864     | 19,436     |
| Bharatnet      | 7,511      | 1,500      |
| Compensation   |            |            |
| to TSPs        |            |            |
| 789            | 1,380      | 5,000      |
| 3,070          | 1,961      | 2,158      |
| Network for    |            |            |
| defence        |            |            |
| services       |            |            |
| PLI Scheme for |            |            |
| Telecom Sector |            |            |
| 0              | 0          | 800        |

Sources: Expenditure Budget, Union Budget 2023-24; PRS. No spending under PLI scheme for telecom sector in first two years In February 2021, a Production-Linked Incentive Scheme was notified to promote telecom and network products manufacturing in India, with total projected outlay of Rs 12,195 crore.5,6  The scheme provides incentive of 4%-6% on the incremental sale of products manufactured in India, with certain conditions also applicable for minimum investment.  In 2021-22, no expenditure was registered under the scheme.  Similarly, in 2022-23, no spending is expected under this scheme as per 

## Non-Tax Revenue From Communication Services

Communication services are one of the major sources of 
non-tax revenue of the central government.  It includes 
proceeds from auction of spectrum and license fees.  In 
2023-24, non-tax revenue from communication services is 
estimated at Rs 89,469 crore, an increase of 30% over the 
revised estimates for 2022-23.  In 2022-23, the revenue on 
this account is expected to be Rs 68,784 crore, 30% higher 
than the budget estimates.  A high increase may be due to 
payments for spectrum auctioned in July 2022.7 

## Communication Services (Rs Crore)

% change 
from 
Year 
Budget 
Actual 
% change 
Year-on-
Budget to 
Year 
Actual 
2017-18 
44,342 
32,066 
-28% 
-54% 
2018-19 
48,661 
40,816 
-16% 
27% 
2019-20 
50,520 
69,846 
38% 
71% 
2020-21 
1,33,027 
45,501 
-66% 
-35% 
2021-22 
53,987 
85,828 
59% 
89% 
2022-23 
52,806 
68,784 
30% 
-20% 
2023-24 
89,469 
- 
- 
30% 

Note: Revised estimate for 2022-23 shown as actuals. Sources: Union Budget Documents of various years; PRS. 

revised estimates, although, Rs 528 crore was allocated at the budget stage last year.  Rs 800 crore has been allocated to this scheme for 2023- 24. The scheme is applicable to transactions from April 1, 2021 onward.5  The support is to be provided for a period of five years, from 2021-22 to 2025-26. The first round of application were invited between June 2021 and July 2021.8  In June 2022, the scheme was amended to add a component for design-led manufacturing.5  Additional applications were invited for design-led manufacturing as well as others for five years commencing from April 1, 
2022.8  They were also given an option of shifting the benefit period by one year.9  The second round of applications were invited between June 2022 and August 2022.  In total, 42 companies have been granted approval under the scheme as of December 2022.9  These companies have committed investment of Rs 4,115 crore.9  Generation of additional sale of Rs 2.45 lakh crore and additional employment of 44,000 is expected over five years.9 

## Possible Reasons For No Spending

As per a media report, only three companies could meet the necessary production and investment targets for the scheme's first year, i.e., 2021-22.10 Claims were limited due to global supply chain issues affecting production and delay in launch of 5G services affecting sales.10  In the second round of applications, 22 companies availed the opportunity of shifting benefit period by one year.9 

Category 
Investment (Rs crore) 
Sales (Rs crore) 
Employment (in number) 
MSMEs 
79 
743 
1,066 
417 
1,568 
7,684 
Other Domestic Companies International Companies 
568 
9,460 
2,146 
Total 
1,064 
11,771 
10,896 

Sources: Telecom PLI Dashboard, Udyami Mitra Portal, SIDBI, as accessed on February 15, 2023; PRS. 

Key infrastructure development projects see significant delays and cost escalation 

## Bharatnet

Bharatnet scheme was launched in 2011 with an aim to connect about 2.5 lakh gram panchayats with optical fibre network (a total of 6.5 lakh kilometre).11  As per the initial approval, the scheme was to be completed within two years, i.e., by 2013.11  However, the project could take off only after July 2014, which required the deadlines to be revised.11  Key reasons were inadequate planning and design and lack of preparation to address implementation issues.11 The project has been divided into two phases.  The target for completion of Phase-I of connecting one lakh gram panchayats was set for March 2017.11 Phase-I was delayed by another nine months, and was finally completed in December 2017.11  The deadline for Phase-II to connect remaining gram panchayats has been moved multiple times, from March 2019 to March 2020, and then August 2021.11,12,13  As of January 31, 2023, optical fibre has been laid in 1.98 lakh gram panchayats, out of which 1.91 lakh have been made service ready (about 76%).14  Thus, Phase-II is not complete yet, after four years of the original deadline.  
Sources: Union Budget Documents of various years; PRS.  

## Unspent Balance In Universal Service Obligation Fund

The Universal Service Obligation Fund (USOF) has been 
established to provide access to communication to people in 
rural and remote areas.4  The resources for the fund are raised 
through a Universal Access Levy (UAL), which is 5% of the 
Adjusted Gross Revenue (AGR) earned by all the operators 
under various licenses currently.5   Adjusted Gross Revenue is 
the value of gross revenue after deduction of taxes and 
roaming/PSTN charges from Gross Revenue.  UAL is first 
credited to the Consolidated Fund of India and then disbursed 
to the USOF as per the budgetary proposal of the Department 
of Telecommunications.   

Over the years, the amount utilised from the funds have been 
considerably lower than the amount credited to it.  Between 
2002-03 and 2022-23 (up to October 2022), a total of Rs 1.33 
lakh crore has been credited to the fund.15  Out of which, Rs 
68,737 crore has been disbursed for various schemes (51%).  
Rs 64,774 crore remains unspent.15   

Sources:  Website of USOF as accessed on February 15, 2023; PRS. USOF funds to be utilised for funding R&D 

The schemes funded through USOF include Bharatnet and 
installation of towers in left-wing extremism affected areas.      
In October 2022, a new scheme called Telecom Technology 
Development Fund has been launched, to be funded from 
USOF.16  The scheme aims to fund research and development 
in rural-specific communication technology applications. 

## Low Fund Utilisation May Imply Persistent Implementation Issues

In 2022-23, at the budget stage, Rs 7,000 crore was allocated towards Bharatnet.  The allocation has been decreased to Rs 1,500 crore at the revised stage, 79% lower than the budget estimate. 

## Scope Enhanced To Connect All Inhabited Villages

The scheme's scope has been enhanced from timeto-time.  Initial scope was to make gram panchayats service ready by connecting to optical fibre network.  In July 2017, the implementation strategy was revised to include last mile connectivity through wi-fi or any other suitable technology to all gram panchayats.11  Last-mile connectivity is to be provided through viability gap funding in public private partnership mode.11  As of January 31, 2023, wi-fi hotspot has been installed in 1.04 lakh gram panchayats, out of which only 6,285 are active.17  In June 2021, the scope was further enhanced to connect all inhabited villages beyond gram panchayats to optical fibre network by 2023.4 

## Network For Defence Services

The Network for Defence Services project aims to provide a dedicated pan-India optical fibre cablebased network for use by defence services.  This project was to be completed by July 2015 and had an initial sanctioned cost of Rs 13,334 crore.18  The project cost was subsequently increased to Rs 24,664 crore.19  The revised deadline for completion was set for May 2020, further revised to December 2020.13,19  Funds have been allocated towards this scheme for 2023-24, implying that the scheme is still ongoing (Figure 3).  As per the report of the Infrastructure and Project Monitoring Division under MoSPI, the project is anticipated to be completed by September 2023.20  In 2021-22, the actual expenditure under the scheme was 41% lower than the budget estimates. 

## Issues For Consideration

Import dependence for telecom instruments In 2021-22, India's import of telecom instruments was worth USD 15.2 Billion.21  India also exported telecom instruments worth USD 7.4 billion.21 Between 2017-18 and 2021-22, exports of telecom instruments have consistently grown, whereas imports have come down (Figure 4).  However, import levels are still high, with telecom instruments consistently in top-10 imported commodities by India.  Further, dependence on China for telecom import also remains high.  45% of the telecom instruments by value are expected to be imported from China in 2021-22 (Figure 5).21 There has been concerns around continuing dependence on import for telecommunication and networking equipment.  This is for both economic and security reasons.22  TRAI (2022) observed that India is not able to fully exploit the upsurge in the telecom sector.22  On one hand, the sector brings in  
Sources: Monthly Bulletins on Foreign Trade Statistics, Ministry of Commerce and Industry; PRS. 

foreign exchange through FDI, on the other hand, huge amount of foreign exchange is flowing out due to dependence on import.22  A huge opportunity for development of domestic manufacturing exists, with the communication sector developing at a fast pace around the world, including in India.22 The central government has taken a number of steps in recent years for development of domestic manufacturing capacity including: (i) PLI schemes, and other schemes for capex support and interest subvention for manufacturing of telecom equipment, semiconductors, and electronic goods and components, and (ii) venture capital fund and incubation centres for startups in these sectors.22 TRAI (2022) observed following factors as key cost disabilities for manufacturing in India: (i) cost of capital is high, with differential of about 3% as compared to developed countries, (ii) cost of essential supplies such as electricity and water to industry is higher than the normal rate in India, and (iii) high costs of compliance, testing, and certification.22  It cited a private study according to which Vietnam and China are considered 1.7 times and two times more attractive as investment destinations than India, respectively.22  India suffers a cost disability of 7.5%-9.8%, as compared to Vietnam, and 17%-19% as compared to China for manufacturing telecom products locally.22 These occur in terms of cost of capital, power, labour, logistics, and other infrastructure.22 
As per the Department of Telecommunications, key reasons for import dependence are: (i) zero duty on import of telecom equipment as per existing tariff obligations under international treaties, (ii) low investment in research and development and creation of intellectual property rights, and (iii) lack of market access for indigenous manufacturers.23 Imports may increase substantially with the introduction of newer technology such as 5G.23  In her budget speech for 2023-24, the Finance Minister announced 100 labs for developing applications using 5G services.24 

## Spectrum Management

The National Digital Communications Policy, 2018 aims to develop a transparent, normative, and fair policy for spectrum assignment and allocation.25 The Standing Committee on Information Technology (2021) had observed that based on the current availability of spectrum, approximately 50 MHz spectrum per operator can be ensured for 5G services.  This is substantially lower than the global average (about 100 MHz).26  It noted that in case of 4G too, the average spectrum per operator in India is around one-fourth of the global average.26  The Committee observed that there is an urgent need for an audit of all allocated spectrum for detecting under-utilisation and subsequently rationalising the allocation of spectrum.26 In April 2022, CAG observed certain shortcomings in the management of spectrum.27  It observed that since February 2012, the Department of Telecommunications has been operating application windows for three to six months for spectrum assignment.27  This ad hoc arrangement has caused uncertainty of availability of resource among government users as well as delays and denial in certain cases.27  The policy for allotment of spectrum for captive usage has not been finalised.  The pricing policy for captive usage has also not been reviewed, and there is no differential pricing for spectrum based on features and usage. Further, a large quantity of unutilised spectrum exists in certain bands such as 2,100 MHz and 2,300-2,400 MHz, which have huge commercial value.27 It also observed the Wireless Monitoring Organisation, a field unit of the Department, did not have sufficient and updated monitoring equipment, or enforcement groups.27  In October 2022, the Department released the National Frequency Allocation Plan-2022.28  The plan provides a broad regulatory framework for governing use of spectrum in India. 


## Stagnation In Fdi Equity Inflow

In 2020-21 and 2021-22, the telecommunication sector 
received FDI equity inflow of USD 392 million and USD 668 
million, respectively.  The share of the telecommunication 
sector was only 1% in the total FDI equity inflow in the 
country in those two years.  Historically, the 
telecommunication sector has been the third-highest 
recipient of FDI equity inflow (about 7% of the total between 
2000-01 and 2021-22). 

## Broadband Access And Speed

The National Digital Communications Policy, 2018 set goals of: (i) providing universal broadband connectivity at 50 Mbps to every citizen by 2022, and (ii) one Gbps connectivity to all gram panchayats by 2020, and 10 Gbps by 2022.25 Communication can be classified among broadband and narrowband based on the bandwidth required for communication.  Broadband communication uses a higher bandwidth and provides better speed. TRAI (2020) had observed that in the post- COVID-19 pandemic era, there will be an increasing reliance on broadband connectivity and demand for these services is likely to grow much faster.29  TRAI observed that India needs to improve in terms of access to fixed broadband as well as the speed of broadband.  As of December 2020, only 9.1 out of 100 households had access to fixed broadband.29,30 In India, as of September 2022, 96% of internet subscribers in India use a broadband connection.31 However, a broadband connection in India is defined to have a minimum download speed of two mbps (megabits per second) to an individual subscriber (revised in February 2023 from 512 kbps or kilobits per second).32  In other countries, this threshold is defined at a higher level.  In USA, UK, and China, it is defined to be 25 Mbps, 24 Mbps, and 20 Mbps, respectively.29  In August 2021, TRAI recommended re-defining broadband in India as: (i) basic broadband (download speed between two Mbps and 50 Mbps), (ii) fast broadband (download speed between 50 Mbps and 300 Mbps), and (iii) super-fast broadband (download speed of more than 300 Mbps).29  It recommended a direct benefit transfer scheme in those rural areas where adequate fixed-broadband capacity is available but there is a lack of demand. TRAI observed that as per a March 2021 report by a private firm (Ookla), India experiences download speeds of 12.2 Mbps in case of mobile broadband and around 56.1 Mbps in case of fixed broadband.29  
The corresponding global average was 48.4 Mbps and 98.7 Mbps, respectively.29  India ranked 131st among 140 nations in mobile broadband speed and 66th among 177 countries in fixed broadband speed according to this report.29 
Financial performance of BSNL and MTNL 
BSNL and MTNL are the public sector undertakings (PSUs) engaged in providing telecommunication services in the country.  BSNL and MTNL have been incurring losses continuously since 2009-10.33  In 2019, the central government approved revival plans for both BSNL and MTNL.2 The plan provided for implementation of voluntary retirement scheme, to reduce the salary expenses. As of March 2022, a total of 92,910 employees opted for the voluntary retirement scheme, which reduced salary expenditure of BSNL by about 50% and that of MTNL by about 80%.4  Existing highcost debt was also re-structured through loans raised with sovereign guarantee.  BSNL and MTNL raised loans of Rs 8,500 crore and 6,500 crore, respectively, with the guarantee of the central government.4  Under the 2019 revival plan, merger of BSNL and MTNL was also proposed, however, the same has been deferred due to financial reasons including high debt of MTNL.2,4 

| Year         | Income    | Expenditure    |
|--------------|-----------|----------------|
| Profit       |           |                |
| (+)/Loss (-) |           |                |
| 2017-18      |           |                |
| 25,071       | 33,809    | -8,738         |
| 2018-19      |           |                |
| 19,321       | 34,225    | -14,904        |
| 2019-20      |           |                |
| 18,907       | 34,406    | -15,500        |
| 2020-21      |           |                |
| 18,595       | 26,036    | -7,441         |
| 2021-22      |           |                |
| 19,053       | 26,034    | -6,982         |

Sources: Reports of the Standing Committee on Communication and Information Technology; Annual Reports of BSNL; PRS. 

As can be seen in Table 6, BSNL's expenditure has reduced and the losses have lowered as compared to 2018-19 and 2019-20.   BSNL is expected to turn profitable by 2026-27.3  As per the budget estimates, while capital infusion is estimated in BSNL to support roll out of 4G network, the same is not being extended to MTNL. 

## Proposed Regulatory Framework For Telecom Sector

In September 2022, the Department of Telecommunications 
released the Draft Indian Telecommunication Bill, 2022 for 
public feedback.34  The Bill seeks to replace the three 
existing telecom laws - (i) the Indian Telegraph Act, 1885 
providing for licensing of telegraph-related activities and 
interception of communication, (ii) the Indian Wireless 
Telegraphy Act, 1933 for regulation of possession of 
wireless telegraph apparatus, and (iii) the Telegraph Wires 
(Unlawful Possession) Act, 1950 for regulation of 
possession of telegraph wires.  The Bill seeks to make 
telecommunication network and services licensed activities.  
Notably, the Bill includes internet-based communication 
services within the ambit of telecommunication services.  
This implies that OTT-communication services such as 
WhatsApp and Zoom could be subject to licensing.  The Bill 
also seeks to provide: (i) legislative backing to spectrum 
assignment through administrative allocation and auction,  
(ii) right to way for laying telecommunication infrastructure, 
and (iii) a framework for interception of communication and 
suspension of services. 

In December 2022, TRAI released a consultation paper on 
convergence in telecommunication and broadcasting 
technologies.35  TRAI observed that currently, at the 
technology level, one general-purpose network can serve all 
types of services - telecom, broadcasting, and IT-enabled 
services.  Such convergence is also happening at the 
service level, as services are network agnostic, and media 
types and formats and protocols around them are becoming 
the same.  For instance, telephone and broadband services 
are being offered using the cable television network. 
Similarly, telecom service providers offer IPTV (internet-
based television services), video, and music streaming 
services.  However, at the statutory, licensing, and 
regulatory levels, these are still treated distinctly.  Presently, 
there are different Acts, guidelines, and licenses applicable 
for providing these services.  This requires permissions from 
different ministries and oversight from different regulators. 
This poses a challenge for coordination, increases costs 
and infuses delays.35 

Neither BSNL nor MTNL have seen any 
considerable improvement in revenue so far.  The 
income of MTNL has seen a decline as compared 
to income levels observed in 2017-18 and 2018-19. 

## (Rs Crore)

| Year         | Income    | Expenditure    |
|--------------|-----------|----------------|
| Profit       |           |                |
| (+)/Loss (-) |           |                |
| 2017-18      | 3,116     | 6,090          |
| 2018-19      | 2,606     | 5,997          |
| 2019-20      | 2,227     | 5,923          |
| 2020-21      | 1,788     | 4,251          |
| 2021-22      | 1,697     | 4,299          |

 
and Information Technology, March 2022, https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/17_Communications_and_I nformation_Technology_32.pdf. 5 "PLI Scheme amended to facilitate Design-Led Manufacturing with additional incentive rate of 1% over and above existing incentive rates", Press Information Bureau, Department of Telecommunications, June 20, 2022, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1835560. 6 File No 13-01/2020-IC, Ministry of Communications, June 3, 2021, https://dot.gov.in/sites/default/files/PLI%20Scheme%20Guideli nes%20for%20Telecom%20%26%20Networking%20Product.p df?download=1. 7 "Year End Review 2022: Ministry of Communications", Press Information Bureau, Ministry of Communications, December 16, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1884072. 8 Answer to Unstarred Question No 2302, Department of Telecommunications, December 21, 2022, https://pqals.nic.in/annex/1710/AU2302.pdf. 9  "DoT extends PLI Scheme for Telecom and Networking Products to 42 beneficiaries with a total committed Outlay of Rs. 4,115 crore", Press Information Bureau, Ministry of Communications, October 31, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1872271. 10 "Three telecom equipment companies file claims for subsidies under PLI scheme for FY22", The Hindu Business Line, December 23, 2022, https://www.thehindubusinessline.com/info-tech/three-telecomequipment-companies-file-claims-for-subsidies-under-telecommanufacturing-pli-for-fy21-22/article66297971.ece. 11 "50th Report: Progress of Implementation of Bharatnet", Standing Committee on Information Technology, August 2018, https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/16_Information_Technolog y_50.pdf. 12 Unstarred Question No 621, Rajya Sabha, Ministry of Communications, June 27, 2019, https://164.100.158.235/question/annex/249/Au621.pdf. 13 "6th Report: Demand for Grants (2020-21) of Department of Communications (Ministry of Communications), Standing Committee on Information Technology, March 2020, https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/17_Information_Technolog y_6.pdf.   
14 Bharatnet Status, Website of Bharat Broadband Network Limited as accessed on February 16, 2023, https://web.archive.org/web/20230217021624/https://bbnl.nic.in /BharatNet.pdf. 15 "Fund Status", Website of Universal Service Obligation Fund as accessed on February 15, 2023, https://usof.gov.in/fundstatus. 16 "Universal Service Obligation Fund (USOF) launches Telecom Technology Development Fund scheme", Press Information Bureau, Ministry of Communications, October 1, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1864133. 17 Bharatnet Usage Data, Website of Bharat Broadband Network Limited as accessed on February 16, 2023, https://web.archive.org/web/20230217021705/https://bbnl.nic.in /usage2.pdf. 18 "47th Report: Demands for Grants (2018-19) of Department of Telecommunications (Ministry of Communications)", Standing https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/16_Information_Technolog y_47.pdf. 

Information Bureau, Union Cabinet, May 16, 2018, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1532262. 20 445th Flash Report on Central Sector Projects (Rs 150 crore and above), Infrastructure and Project Monitoring Division, December 2022, http://www.cspm.gov.in/english/flr/FR_Dec_2022.pdf. 21 Monthly Bulletin on Foreign Trade Statistics, Directorate General of Foreign Trade, April 2022, https://content.dgft.gov.in/Website/dgftprod/c90cdc74-6915- 4fe1-a732- 0b113d8c0198/Monthly%20Bulletin%20on%20Foreign%20Tra de%20Statistics%20April%202022.pdf. 22 Consultation Paper on "Promoting Networking and Telecom Equipment Manufacturing in India", Telecom Regulatory Authority of India, February 11, 2022, https://trai.gov.in/sites/default/files/CP_11022022.pdf. 23  "First Report: Demands for Grants (2019-20) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, December 2019, https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/17_Information_Technolog y_1.pdf. 24 Budget Speech, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 25 National Digital Communications Policy 2018, https://dot.gov.in/sites/default/files/EnglishPolicy-NDCP.pdf. 26 "21st Report: India's preparedness for 5G", Standing Committee on Information Technology, February 2021, https://loksabhadocs.nic.in/lsscommittee/Communications%20a nd%20Information%20Technology/17_Information_Technolog y_21.pdf. 27 "Management of Spectrum assigned on the administrative basis to Government Departments/Agencies, Report No 2 of 2022, CAG, April 1, 2022, https://cag.gov.in/en/auditreport/download/116503. 28 National Frequency Allocation Plan 2022, Wireless Planning and Coordination Wing, Department of Telecommunications, October 26, 2022, https://dot.gov.in/sites/default/files/NFAP%202022%20Docume nt%20for%20e-release.pdf.  

29 "Recommendations on Roadmap to Promote Broadband 
Connectivity and Enhanced Broadband Speed", Telecom 
Regulatory Authority of India, August 31, 2021, https://trai.gov.in/sites/default/files/Recommendations_3108202 1.pdf. 30 "Consultation Paper on Roadmap to Promote Broadband 
Connectivity and Enhanced Broadband Speed", Telecom 
Regulatory Authority of India, August 20, 2020, https://trai.gov.in/sites/default/files/Broadband_CP_20082020_0 .pdf.  
31 The Indian Telecom Services Performance Indicators Jul-Sep 2022, Telecom Regulatory Authority of India, February 3, 2023, https://www.trai.gov.in/sites/default/files/QPIR_03022023_0.pd f. 32 F. No. 4-1/2018-Policy-1, Department of Telecommunications, February 1, 2023, https://egazette.nic.in/WriteReadData/2023/243333.pdf. 33 Unstarred Question No 1773, Lok Sabha, Ministry of Communications, February 13, 2019, http://164.100.24.220/loksabhaquestions/annex/17/AU1773.pdf. 34 Draft Indian Telecommunication Bill, 2022, Department of Telecommunications , September 21, 2022, https://dot.gov.in/sites/default/files/Draft%20Indian%20Teleco mmunication%20Bill%2C%202022.pdf. 35 Consultation Paper on "Regulating Converged Digital Technologies and Services - Enabling Convergence of Carriage of Broadcasting and Telecommunication services", Telecom Regulatory Authority of India, January 30, 2023, https://www.trai.gov.in/sites/default/files/CP_30012023_0.pdf.  

## Demand For Grants 2023-24 Analysis Jal Shakti

The Ministry of Jal Shakti is responsible for the development of India's water resources, and providing quality drinking water and sanitation facilities to all citizens.1,2  The Ministry was formed in 2019, by merging the Ministry of Drinking Water and Sanitation into the Ministry of Water Resources, River Development, and Ganga Rejuvenation.  The Ministry has two departments, both continuing from the erstwhile Ministries which were incorporated into the Ministry of Jal Shakti.3 This note looks at the proposed expenditure for the Ministry of Jal Shakti for 2023-24, financial trends, and related issues with schemes and programmes of the Ministry.   

## Union Budget Highlights 2023-24

The Ministry of Jal Shakti has been allocated Rs 97,278 crore in 2023-24.4,5  The Department of Water Resources has been allocated Rs 20,055 crore, 43% higher than the revised estimates of the previous year. The Department of Drinking Water and Sanitation has been allocated Rs 77,223 crore, which is a 29% increase over the revised estimates of 2022-23.  

% 
Department 
21-22 
Actuals 
22-23 
BE 
22-23 
RE 
23-24 
BE 
Change* 
Water Resources 
17,215  
18,968  
14,000  
20,055  
43% 
66,252  
67,221  
60,029  
77,223  
29% 
Drinking Water and Sanitation Total 
 83,467  
86,189  
74,029  
97,278  
31% 

Note: BE is budget estimate and RE is revised estimate. *% change is change in 2023-24 BE over 2022-23 RE. Sources: Demands for Grants 2023-24, Ministry of Jal Shakti; PRS.  

## Department Of Drinking Water And Sanitation Overview Of Finances

The Department of Drinking Water and Sanitation aims to ensure that every citizen has access to clean drinking water and sanitation facilities.2  The Department has been allocated Rs 77,223 crore for 2023-24, a 29% increase over the revised estimates of 2022-23.  From 2013-14, budgetary allocation to the department has grown by about 18%.  However, a significant increase was seen in 2021-22, when the budgetary allocation was more than three times the revised estimates of the previous year.  From 2019-20, the focus of expenditure by the Department shifted from sanitation to drinking water.  
Major schemes under the Department The Department implements two major schemes: (i) the Jal Jeevan Mission (JJM), and (ii) the Swachh Bharat Mission - Gramin (SBM-G).  JJM aims to provide drinking water through tap connections to every household by 2024.2  It also promotes grey water (used water) management, water conservation, and rain water harvesting.  The Swachh Bharat Mission was launched as a nation-wide campaign to achieve universal sanitation coverage by 2019.  91% of the budgetary allocation for the department in 2023-24 is for the JJM, and 9% for SBM-G. 

% change  
(23-24 
Major 
Head 
21-22 
Actual 
22-23 
RE 
23-24 
BE 
BE/22-23 
RE) 
JJM 
63,126  
55,000  
70,000  
27% 
SBM-G 
3,099  
5,000  
7,192  
44% 
Others 
27  
       29          31  
6% 
Total 
66,252  
60,029  
77,223 
29%  

Source: Demands for Grants of the Department of Drinking Water and Sanitation, 2023-24; PRS.  

## Key Issues And Analysis Jal Jeevan Mission

JJM was launched in 2019, subsuming the National Rural Drinking Water Programme, to provide a Functional Household Tap Connection (FHTC) to every rural household (16 crore families).6,7  The 15th Finance Commission allocated funds of Rs 2.36 lakh crore to rural local bodies to improve water supply and sanitation.  60% of the fund (Rs 1.42 lakh crore) is to be used exclusively for drinking water, rainwater harvesting, and sanitation facilities.  The total estimated outlay of JJM is Rs 3.6 lakh crore between 2019 and 2024.7  As on February 16, 2023, total expenditure on the scheme is Rs 1.3 lakh crore.8 There was a significant increase (335%) in allocations to drinking water in 2021-22, due to increased allocation to JJM.  For the financial year 2023-24, the JJM has been allocated Rs 70,000 crore, 27% more than the revised estimates of 2022-23. 

Note: BE is budget estimate.  Source: Demands for Grants, Department of Drinking Water and Sanitation for various years; PRS. 

JJM was launched with the aim of providing all households in the country (19.4 crore) access to FHTCs by 2024.7  3.2 crore households had tap water connections when the scheme was launched.  As of February 14, 2023, 7.9 crore households have been provided FHTCs under the scheme.  11.2 crore (57.56%) households in total have tap water connections as of February 14, 2023.9   

% of 
Month 
Number of households provided with FHTC (in crores) 
households 
with FHTCs 
August 2019 
3.2 
17% 
August 2020 
5.3 
27% 
August 2021 
8.1 
42% 
August 2022 
10.1 
52% 
February 2023 
11.2 
58% 

State governments have flagged several bottlenecks which delay fund utilisation and implementation of JJM.10  These include: (i) uneven geographical terrain, (ii) scattered rural habitations, (iii) depletion of groundwater, (iv) adverse climatic conditions, (v) fluctuating prices of materials, and (vi) delays in obtaining clearances.  The 15th Finance Commission had noted that more than 63% of rural habitations received piped water from groundwater sources.11  This adds pressure to India's over-stressed ground water resources.  The COVID-19 pandemic and subsequent lockdowns also delayed the achievement of targets.  

## Inter-State Disparities In Achievements

The Standing Committee on Water Resources (2022) noted that several states and UTs had achieved 90%- 100% household coverage under JJM.10  However, they also noted that several larger states, such as Uttar Pradesh, Rajasthan, Madhya Pradesh, and Kerala provided less than 40% of their households FHTCs. The Department identified 13 major states which had more than 95% of households which did not have FHTCs.  The issues that these states face in implementing JJM include10: (i) depletion of ground water, (ii) inability to contribute the state's share in a timely manner, and (iii) insufficient contributions by the local community. 

Gujarat
Goa
100 100 100 100 100
98
96

Source: JJM Dashboard, accessed on February 14, 2023; PRS. 

## Quality Of Water

The Standing Committee on Water Resources (2022) noted that thousands of rural habitations in the country had contaminated water sources.14  Arsenic, fluoride, iron, nitrate, and heavy metals have contaminated drinking water sources in these habitations.  If groundwater is harnessed further through the digging of deeper wells, chemical contamination of these sources could worsen.11 Under the JJM, states/UTs can install Community Water Purification Plants (CWPPs) to provide quality water for basic needs of households, as an interim measure until tap connections are established.  The Committee noted that less than 6% of habitations with contaminated water were covered by CWPPs.10  They recommended that these habitations be brought under the coverage of CWPPs and provided with FHTCs as soon as possible to ensure regular supply of quality water.      

contaminated water sources 
| Year       | Number of affected habitations    |
|------------|-----------------------------------|
| April 2019 | 57,539                            |
| April 2020 | 54,166                            |
| April 2021 | 36,054                            |
| April 2022 | 27,160                            |

June 2022 
26,930 
Source: Report No. 19, Standing Committee on Water Resources; PRS.   
SBM-G was launched in 2014 as a Centrally Sponsored Scheme with the aim of achieving universal sanitation coverage by 2019.7  It also focuses on improving cleanliness in rural areas and ending open defecation. By October 2019, all villages in the country had been declared open defecation free (ODF).  Phase II of the scheme was launched in 2020, and aims to sustain the ODF status achieved by the country in Phase I, and also cover all villages with solid and liquid waste management.7  A village attains ODF plus status if these criteria are met, and the village is visually clean. As of February 14, 2023, 1.97 lakh villages (33% of all villages) have achieved ODF plus status (see Annexure I).12  1.4 lakh villages have made arrangements for solid waste management, and 1.5 lakh villages have made arrangements for liquid waste management. The National Annual Rural Sanitation Survey (2019- 20) found that 6% of rural households did not have access to toilets and practised open defecation.13  Of those families that have access to toilets, 96% were found to have functional toilets.  However, only 73% households had water available within the premises of the house.  The 15th Finance Commission had noted that piped water supply to rural households was necessary if ODF status of villages was to be maintained.11  This highlights the importance of convergence of JJM and SBM-G. 

## Fund Utilisation Worsened In Sbm-G Phase Ii

For the financial year 2023-24, SBM-G has been allocated Rs 7,192 crore.  Budget allocations to SBM-G have reduced by 8% since 2016-17.  Actual expenditure on the scheme has been lower than the budget estimates since 2018-19.  In 2021-22, actual expenditure was 31% of the budget estimate.   

 
The Department informed the Standing Committee of constraints in utilising funds adequately and achieving targets set under the scheme.14  SBM-G Phase II involves interventions under solid and liquid waste management activities, which makes this phase more complex than Phase I.  Implementing agencies and functionaries at various levels lack capacity to undertake these activities.  Existing assets are expected to be utilised for activities under the scheme such as plastic waste management and faecal sludge management.  However, this often requires coordination between rural and urban functionaries.  

| Year              | Funds allocated    |
|-------------------|--------------------|
| Funds released to |                    |
| States/UTs        |                    |
| 2016-17           | 10,500             |
| 2017-18           | 16,948             |
| 2018-19           | 23,176             |
| 2019-20           | 11,938             |
| 2020-21           | 6,000              |
| 2021-22           | 6,000              |
| Total             | 83,938             |

Source: Unstarred Question No. 443, Rajya Sabha, answered on February 6, 2023; PRS. 

## Increase In Unit Assistance

Under SBM-G, financial assistance of Rs 12,000 is being given to beneficiaries for the construction of individual household latrines (IHHLs).  The Standing Committee on Water Resources (2022) noted that this amount is grossly insufficient.10  It does not cover the cost of construction of toilets, including material and labour.  They recommended that the unit assistance be increased to Rs 20,000.10  The Department responded that the total assistance provided to beneficiaries can be increased if states provide additional funds.  Currently, the Union government covers 90% of the total cost in the north-eastern states, Himalayan states and Jammu and Kashmir, and 60% of the cost in other states. States have to provide only Rs 1,200 and Rs 4,800 respectively to these two categories of states/UTs.  The Department also suggested that beneficiaries be encouraged to contribute their own share to increase ownership.10  

## Department Of Water Resources, River Development And Ganga Rejuvenation Overview Of Finances

The Department of Water Resources, River Development, and Ganga Rejuvenation aims to achieve poverty reduction, environmental sustenance, and sustainable economic development, through integrated water management.1  It implements schemes for river basin management, major irrigation, water resource management, and dam maintenance.  It also has attached and subordinate offices which provide technical guidance on these matters. 

Between 2013-14 and 2023-24, budgetary allocation for the Department has grown at an average annual rate of 25%.  In 2021-22, there was a 110% jump in allocation. This was due to additional expenditure on river interlinking projects and the Accelerated Irrigation Benefits Programme (AIBP).  Till 2020-21, the Central share for projects under AIBP was raised through loans from NABARD.  From 2021-22, budgetary support has been provided for AIBP projects, which increased allocations to the Department.15   
Major schemes under the Department In 2023-24, 43% of the total budgetary allocation has been towards the Pradhan Mantri - Krishi Sinchai Yojana (PMKSY).  This is followed by the Namami Gange programme (20%), river interlinking (17%), and water resource management (10%).  The Department has been implementing various schemes to conserve water resources, improve their quality, and ensure equitable distribution of water in the country. However, these schemes face similar problems in planning and implementation.  The Standing Committee on Water Resources (2022) and the CAG (2017,2018) have raised issues related to planning and budgeting for several schemes under the Department. Despite funds being allocated, utilisation is poor.17,31,39 Due to these issues, targets remain unmet, or are achieved with significant time and cost overruns.   

% 
Scheme 
21-22 
Actual
Change
22-23 
BE 
22-23 
RE 
23-24 
BE 
s 
* 
PMKSY 
  8,541  
10,954  
7,085  
8,587 
21% 
Namami Gange  
   1,893  
 2,800  2,500  
4,000 
60% 
   4,634  
  1,400  1,100  
3,500 
218% 
River Interlinkin g ABY 
     327  
    700  
   700  
1,000 
43% 
CWC 
363 
   411  
  385  
460 
20% 
CGWB 
     262  
     282  
  291  
304 
5% 
DRIP 
        23  
    100  
     25  
50 
100% 

## Key Issues And Analysis Ground Water Management

A study conducted by the Central Water Commission estimated the average per capita availability of water in 2011 at 1,545 cubic meters.16  It was estimated to reduce to 1,486 cubic meters by 2021.  Annual per capita water availability less than 1,700 cubic meters is considered a water stressed condition.17  33% of units (blocks/mandals/districts) assessed by the Central Ground Water Board across the country were found to be semi-critical, critical, over-exploited, or completely saline in 2022.18  
Unsustainable agriculture: In 2022, the overall stage of India's ground water development was 60%.18  Stage of ground water development is the amount of ground water being utilised as a proportion of ground water recharge.  However, this proportion varies across states.  
Ground water development in Punjab, Rajasthan, Haryana, and Dadra & Nagar Haveli and Daman & Diu was more than 100%, implying that ground water consumption was higher than the recharge.  The stage of ground water development for all state/UTs is given in the Annexure . The Central Ground Water Board has reported that 87% of ground water extracted annually is used for irrigation.18  The Standing Committee on Water Resources (2022) noted that subsidised electricity and fertilisers incentivised farmers to grow water-intensive crops even in water scarce regions.17  Rationalising electricity prices could discourage farmers from overconsumption of water.  They recommended that the Department of Water Resources work closely with the Ministry of Power, Ministry of Agriculture, and state departments to explore efficient electricity pricing.17 The government supports producers of major food crops through its procurement policy.  Some of these crops, such as rice and sugarcane, are water intensive. The top rice-producing states in 2020-21 were West Bengal, Uttar Pradesh, and Punjab.19  The top producers of sugarcane were Uttar Pradesh, Maharashtra, and Karnataka.  In Uttar Pradesh, ground water in 34% of blocks is (semi)-critical or over-exploited.18  In Maharashtra, the proportion is 23%.  Water intensive crops are grown even in areas which face water scarcity, since farmers receive assured prices for these crops.  This has adverse effects on the ground water level in these areas.  The 15th Finance Commission recommended that farmers in water stressed areas should be incentivised to adopt methods like drip irrigation or shift away from water intensive crops.11 
Atal Bhujal Yojana: Atal Bhujal Yojana was launched in 2020 as a Central Sector Scheme, with an outlay of Rs 6,000 crore.20  It aims to improve the management of ground water resources over five years from 2020-21 to 2024-25.  The scheme will be implemented in seven states, which account for 37% of the water-stressed blocks in the country. However, Punjab, which has a ground water development of 166% (2022) is excluded from the scheme.18  The Ministry has stated that participating states were determined based on consultation, criticality of ground water, willingness, and degree of preparedness.21 The scheme was allocated Rs 1,000 crore in 2023-24, 43% more than the budget allocation for 2022-23. However, only around 20% of allocated funds have been released, and less than 15% of released funds have been spent. 

## 

on Atal Bhujal Yojana (in Rs crore) 
Funds 
State 
Funds 
Allocated 
Released 
Expenditure 
Gujarat 
346 
72 
22 
Haryana 
339 
54 
39 
Karnataka 
421 
2 
14 
Madhya Pradesh 
124 
26 
0 
Maharashtra 
408 
44 
22 
Rajasthan 
508 
67 
11 
Uttar Pradesh 
283 
4 
0 

Source: Atal Bhujal Yojana Dashboard, accessed on February 13, 2023; PRS. 

Yojana in 2022-23 (as of February 16, 2023) 
| Work Undertaken       | Target    | Achievement    |
|-----------------------|-----------|----------------|
| %                     |           |                |
| Achieved              |           |                |
| Training Programmes   | 1,60,055  | 13,606         |
| Digital/Analog Water  |           |                |
| Level Indicators      |           |                |
| 7,410                 | 5,634     | 76%            |
| Rain Gauge            | 7,149     | 1,663          |
| Water Flow Meters     | 64,857    | 2,458          |
| Water Quality Testing |           |                |
| Kit                   |           |                |
| 6,252                 | 2,703     | 43%            |

Note: Targets for equipment refer to the number installed.  Source: Atal Bhujal Yojana Dashboard, accessed on February 17, 2023; PRS. 

Reducing dependence on ground water: The 15th Finance Commission recommended that surface water sources be utilised optimally to reduce reliance on ground water sources.11  The Jal Shakti Abhiyan, launched in 2019, is a nation-wide campaign aiming to promote water conservation and rainwater harvesting across 256 water-stressed districts in the country.22  The campaign was expanded to all districts across the country in 2021 and 2022.  As of February 2023, Rs 23,717 crore has been spent on activities such as rain water harvesting structures, watershed development, and intensive afforestation.23 
In April 2022, Mission Amrit Sarovar was launched to conserve water for the future, by constructing and rejuvenating one lakh ponds by August 15, 2023.24  As on February 16, 2023, more than 95,000 sites have been identified.  Work has commenced on 61% of sites, and 
54% of works have been completed.25    
Central Ground Water Board (CGWB): The CGWB is a scientific organisation which develops and disseminates technologies for the sustainable development of the country's water resources.26  The Standing Committee on Water Resources (2022) noted that almost 32% of posts in the CGWB are vacant.17 Vacancies are 38% in the scientific category and 28% in the engineering category.  The Committee was concerned that the lack of human resources would hamper the functioning of the CGWB. 

Pradhan Mantri Krishi Sinchai Yojana PMKSY is a centrally sponsored scheme launched in 2015-16, aiming to (i) increase cultivable area under irrigation, (ii) enhance physical access of water on farms, (iii) improve on-farm water use efficiency, and 
 
(iv) introduce sustainable water conservation practices.27  It consists of four components implemented by three Ministries.  The Ministry of Jal Shakti implements the Accelerated Irrigation Benefit Programme, and Har Khet Ko Pani (HKKP).  The Watershed Development Component is implemented by the Ministry of Rural Development, and the Per Drop More Crop is implemented by the Department of Agriculture and Farmers' Welfare.27 In 2023-24, PMKSY has the highest allocation within the Department of Water Resources (43%).  This is lower than its share in 2022-23 (58%).  Since 2015-16, allocation to the scheme has grown at an average annual rate of 36%.  
 Source: Demands for Grants of the Department of Water Resources for various years; PRS. 

Accelerated Irrigation Benefit Programme (AIBP): 
The AIBP was launched in 1996-97 to provide financial assistance to states, and enable them to accelerate the implementation of major/minor irrigation projects which were held up due to financial constraints.28  In 2023-24, Rs 3,122 crore has been allocated for the AIBP, 3.6% less than the allocation in 2022-23.  As of February 6, 2023, about 620 hectares of irrigation potential has been created through this scheme.29  A total expenditure of Rs 23,902 crore has been made on AIBP (with pari-passu implementation of the Command Area Development and Water Management programme under PMKSY-HKKP), and Rs 4,536 crore of Central assistance has been released to states.  This includes six new projects taken up under AIBP after 2021-22 The CAG (2018) had noted that the implementation of projects under AIBP has seen time delays and cost overruns.30  While only projects that could be completed in two to four years were meant to be brought under AIBP, actual project completion was delayed by as much as 18 years in some cases.  Out of 453 projects audited, only 68% of the targeted irrigation potential was created.  Cost overruns were as much as 295% of the original cost for 84 major and medium irrigation projects audited.  Shortfall in land acquisition, delays in obtaining statutory clearances, and changes in the design/scope of work have been cited as reasons for poor implementation of AIBP projects.

of August 8, 2022) 
| Target               | Performance    | %    |
|----------------------|----------------|------|
| (Unit)               | Achieved       |      |
| 30.23                | 16.42          | 54%  |
| Command Area         |                |      |
| Development & Water  |                |      |
| Management (lakh ha  |                |      |
| of cultivable        |                |      |
| command area         |                |      |
| covered)             |                |      |
| 4.50                 | 3.42           | 76%  |
| Surface Minor        |                |      |
| Irrigation & Repair, |                |      |
| Renovation, and      |                |      |
| Restoration of Water |                |      |
| Bodies (lakh ha of   |                |      |
| irrigation potential |                |      |
| created)             |                |      |
| 82,290               | 70,888         | 86%  |
| Ground Water         |                |      |
| Development (ha of   |                |      |
| irrigation potential |                |      |
| created)             |                |      |

Source: Starred Question No. 235, Rajya Sabha, answered on August 
8, 2022.    

## Flood Management

In 1980, the Rashtriya Barh Aayog estimated that 40 million ha of land in India are flood-prone.31  This is about one-eighth of India's total land area.  Flood management projects are implemented by state governments/UTs from their own resources.32  The central government provides financial assistance to states to implement some projects in critical areas though the Flood Management and Border Areas Programme (FMBAP).  There are currently 83 projects ongoing under FMBAP across 10 states/UTs.33   

| Year    |   Funds Released (in crore)  |
|---------|------------------------------|
| 2017-18 |                         563  |
| 2018-19 |                         428  |
| 2019-20 |                         477  |
| 2020-21 |                          48  |
| 2021-22 |                         239  |

Source: FMBAP Dashboard, accessed on February 13, 2023; PRS. 

Regulation of flood management: Flood control is not explicitly mentioned in any of the three lists of Schedule VII of the Constitution.34  The Standing Committee on Water Resources (2021) noted that since 
'drainage and embankments' is part of the State List, flood control and management is presumed to be the responsibility of state governments.31  The Department of Water Resources has stated that the Union government only provides technical and advisory assistance to state governments.  However, since several rivers in India flow across state boundaries, measures taken by one state for flood control/management may have consequences for other states in the river basin.31  The Committee recommended that 'flood control and management' be brought under the Concurrent List.  This could facilitate the creation of an overarching framework for the equitable sharing of water resources across the country.   
Flood plain zoning: Flood plain zoning involves identifying areas likely to be affected by floods, and specifying the types of development permitted in these zones.31  Proper identification and enforcement of flood plain zoning guidelines can minimise damage during floods.  The 15th Finance Commission recommended that governments should estimate risk exposure and take measures to reduce contingent liabilities.35  The Standing Committee on Water Resources (2021) noted that floodplain zoning has not been performed in India.31  The Union government had circulated a Draft Model Bill for flood plain zoning to states.  The Bill envisages demarcating flood plains according to flood frequency and defines the types of activities allowed on it.36  However, only four states/UTs (Manipur, Rajasthan, Uttarakhand, and Jammu and Kashmir) have enacted flood plain zoning legislation.  Flood prone states like Bihar, West Bengal, and Uttar Pradesh have not enacted this legislation.  Delineation of flood plains is still pending.     
The Standing Committee had also recommended that a National Embankment Policy be prepared to repair and maintain riverbanks in the country.15  Embankments are an important structural measure undertaken for flood control, which require timely maintenance and strengthening.  However, no such policy has been prepared. 

Insufficient focus on planning: Understanding disaster risk is the first key priority of the Sendai Framework for Disaster Risk Reduction.37  Legislative and policy measures such as the Draft Model Bill for flood plain zoning and the National Embankment Policy help improve planning and preparedness for disasters. Capital outlay on flood control measures is estimated to decrease from Rs 5.6 crore in 2021-22 to Rs 1.6 crore in 2023-24.4  Lack of planning could lead to improper allocation of scarce funds.   

## Namami Gange

The Namami Gange Programme was launched in June 2014 with a budgetary outlay of Rs 20,000 crore to rejuvenate the river Ganga and its tributaries.38  It focuses on (i) pollution abatement, (ii) rural sanitation, (iii) riverfront development, (iv) river flow management, and (v) biodiversity conservation.39 The first phase ended in March 2021, following which the scheme was extended till March 2026, with a budgetary outlay of Rs 22,500 crore.  In 2023-24, Namami Gange II has been allocated Rs 4,000 crore, 60% more than the revised estimates of 2022-23.  This scheme received 20% of the total departmental allocation for 2023-24.  
Underutilisation of funds: The Standing Committee on Water Resources (2022) noted that there was significant underutilisation of funds in the Namami Gange programme (**Figure 7**).17  Between 2016-17 and 2020-
21, actual expenditure was less than 70% of budget estimates.  For three of these years, it was less than 45%.  There were also disparities between the budget and revised estimates.  The Committee noted that continuous disparity between budget and revised estimates indicated deficiency in financial planning by the Department.17   

  

Note: BE is budget estimate.  Actual figure for 2022-23 is revised estimate.  Source: Demands for Grants of Department of Water Resources for various years; PRS. 

 

Year 
Funds 
Released 
Expenditure 
% 
Utilisation 
2016-17 
        1,675  
      1,063  
63% 
2017-18 
        1,423  
      1,625  
114% 
2018-19 
        2,308  
      2,627  
114% 
2019-20 
        1,553  
      2,673  
172% 
2020-21 
        1,300  
      1,340  
103% 
2021-22 
        1,893  
      1,893  
100% 
2022-23 
        1,975  
      1,614  
82% 

Source: Unstarred Question No. 1203, Rajya Sabha, answered on February 13, 2023; PRS. 

However, utilisation of funds released by the Union government to the National Mission for Clean Ganga (NMCG) frequently went over 100% ( 
Table 11).  Funds are released by the NMCG only when states provide utilisation certificates.  The CAG 
(2017) found significant delays in the submission of these certificates by states to the NMCG.39  It noted that this adversely affects the financial and physical performance of the scheme. 

Slow progress of projects: Till December 31, 2022, 409 
projects have been taken up under the Namami Gange programme, out of which 232 (57%) have been completed and operationalised.38  The total estimated cost is Rs 32,912 crore.  The majority of these projects deal with the creation of sewage infrastructure.38  The Committee (2021) noted the slow progress of projects, especially those related to sewage infrastructure.15 They recommended that measures be taken to remove implementation bottlenecks to avoid cost and time overruns.   

Completed 
Type of Project 
Sanctioned 
Sanctioned 
Cost (in Rs 
Projects 
Projects 
crore) 
Sewerage Projects 
160 
24,568 
76 
90 
1,553 
66 
River front, Ghats and crematoria Rural Sanitation 
1 
1,421 
0 
15 
1,267 
0 
Industrial Pollution Abatement 
41 
635 
26 
Afforestation and biodiversity conservation 

Source: Unstarred Question No. 1988, Rajya Sabha, answered on March 21, 2022; PRS.  

## River Interlinking

Interlinking of rivers involves the transfer of water from water-surplus river basins to water-deficit basins. As per the National Perspective Plan, 30 river-links have been identified by the National Water Development Agency for the preparation of feasibility reports.40  Detailed Project Reports have been prepared for eight.  The current status of the projects listed under the Inter-Linking of Rivers Programme is given in Annexure III.  Implementation has begun for only one, the Ken-Betwa Link Project.  It was approved by the Union government in December 2021, with a total outlay of Rs 44,605 crore.  In 2021-22, Rs 4,642 was budgeted for the project, and expenditure was Rs 4,634. Budget allocations decreased to Rs 1,400 crore and Rs 3,500 crore in 2022-23 and 2023-24 respectively.   
 
Inter-State Relations: Most river basins in India cross state boundaries.  River-linking projects then require cooperation and coordination between states lying in those river basins.  The Standing Committee on Water Resources (2022) observed that the main problem in executing river inter-linking projects is the lack of consensus between states.17  States with surplus water resources may not agree to the water being diverted to other river basins.  The Committee noted that in such situations, the central government must engage proactively and address any contentious issues.17  The Committee also recommended that financial benefits, such as an increased share of devolved taxes, or tax benefits may be provided to incentivise states to participate in river linking projects. The Ministry has stated that it is applying a consultative approach in dealing with states on river interlinking projects.17  A legal group has been constituted to investigate legal aspects of river interlinking and formulate enabling provisions.  A tripartite agreement was signed between Madhya Pradesh, Uttar Pradesh, and the central government for the Ken-Betwa Link Project.  
2 About Us, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, accessed on February 12, 2023, https://jalshaktiddws.gov.in/en/about-us. 

3 History, Department of Water Resources, River Development, and Ganga Rejuvenation, Ministry of Jal Shakti, accessed on February 12, 2023, https://jalshakti-dowr.gov.in/about-us/history. 4 Demand No. 62, Department of Water Resources, River Development, and Ganga Rejuvenation, Ministry of Jal Shakti, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe62.pdf; 5 Demand No. 63, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, Union Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe63.pdf. 6 Jal Jeevan Mission (JJM), Department of Drinking Water and Sanitation, accessed on February 14, 2023, https://jalshaktiddws.gov.in/sites/default/files/JJM_note.pdf. 7 'Year End Review 2022: Department of Drinking Water and Sanitation, Ministry of Jal Shakti', Press Information Bureau, Ministry of Jal Shakti, December 27, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1886953. 8 JJM - Reports, Department of Drinking Water and Sanitation, accessed on February 16, 2023, https://ejalshakti.gov.in/JJM/JJMReports/Financial/JJMRep_Statewis eAllocationReleaseExpenditure.aspx. 9 Jal Jeevan Mission - Har Ghar Jal Dashboard, accessed on February 14, 2023, https://ejalshakti.gov.in/jjmreport/JJMIndia.aspx. 10 Report No. 19, Standing Committee on Water Resources, Action Taken on the Recommendations contained in the 16th report, February 10, 2023, https://loksabhadocs.nic.in/lsscommittee/Water%20Resources/17_Wa ter_Resources_19.pdf. 

11 Finance Commission in Covid Times, Report for 2021-26, Vol III, 
15th Finance Commission, October 2020, https://fincomindia.nic.in/ShowContentOne.aspx?id=9&Section=1.  
12 Swachh Bharat Mission Grameen 2.0 Dashboard, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, accessed on February 14, 2023, https://sbm.gov.in/sbmgdashboard/statesdashboard.aspx. 13 National Annual Rural Sanitation Survey, Round - 3, 2019-20, Submitted to the Department of Drinking Water and Sanitation, Ministry of Jal Shakti, https://jalshaktiddws.gov.in/sites/default/files/NARSS_Round_3_2019_20_Report.p df. 14 Report No. 16, Standing Committee on Water Resources, Demands for Grants of the Department of Drinking Water and Sanitation, 2022- 23, March 23, 2022, https://loksabhadocs.nic.in/lsscommittee/Water%20Resources/17_Wa ter_Resources_16.pdf. 15 Report No. 15, Standing Committee on Water Resources, Demands for Grants 2022-23, Ministry of Jal Shakti, March 23, 2022, https://loksabhadocs.nic.in/lsscommittee/Water%20Resources/17_Wa ter_Resources_15.pdf. 16 'Per Capita Availability of Water', Press Information Bureau, Ministry of Jal Shakti, March 25, 2021, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1707522. 17 Report No. 18, Standing Committee on Water Resources, Action Taken Report on Demands for Grants 2022-23, December 20, 2022, https://loksabhadocs.nic.in/lsscommittee/Water%20Resources/17_Wa ter_Resources_18.pdf. 18 Dynamic Ground Water Resources Assessment of India - 2022, Central Ground Water Board, November 2022, http://cgwb.gov.in/documents/2022-11-11-GWRA%202022.pdf. 19 Agricultural Statistics at a Glance, 2021, Ministry of Agriculture and Farmers Welfare, https://eands.dacnet.nic.in/PDF/Agricultural%20Statistics%20at%20a %20Glance%20-%202021%20(English%20version).pdf. 

 
20 Atal Bhujal Yojana Programme Guidelines, Ministry of Jal Shakti, https://ataljal.mowr.gov.in/Ataljalimages/Atal_Bhujal_Yojana_Progr am_Guidelines_Ver_1.pdf. 21 Unstarred Question No. 888, Rajya Sabha, Ministry of Jal Shakti, answered on February 10, 2020, https://rajyasabha.nic.in/Questions/IntegratedSearchForm. 22 Jal Shakti Abhiyan, Press Information Bureau, Ministry of Jal Shakti, July 21, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1843395. 

23 Jal Shakti Abhiyan Dashboard, accessed on February 13, 2022, https://jsactr.mowr.gov.in/. 24 Unstarred Question No. 2115, Lok Sabha, Ministry of Rural Development, answered on December 20, 2022, https://pqals.nic.in/annex/1710/AU2115.pdf. 25 Mission Amrit Sarovar, accessed on February 16, 2023, https://amritsarovar.gov.in/login#. 26 Central Ground Water Board, accessed on February 13, 2023, http://cgwb.gov.in/index.html. 27 "PMKSY Pradhan Mantri Krishi Sinchayee Yojana", Press Information Bureau, Ministry of Jal Shakti, August 4, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1848470. 28 "Assistance to States under AIBP", Press Information Bureau, Ministry of Jal Shakti, March 18, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1705787. 29 Unstarred Question No. 364, Rajya Sabha, Ministry of Jal Shakti, answered on February 6, 2023, https://pqars.nic.in/annex/259/AU364.pdf. 30 Report No. 22 of 2018 (Performance Audit), 'Accelerated Irrigation Benefits Programme', Comptroller and Auditor General of India, https://cag.gov.in/en/audit-report/details/48670. 31 Report No. 12, Standing Committee on Water Resources, "Flood Management in the Country including International Water Treaties in the field of Water Resource Management with particular reference to Treaty/Agreement entered into with China, Pakistan, and Bhutan", August 5, 2021, https://loksabhadocs.nic.in/lsscommittee/Water%20Resources/17_Wa ter_Resources_12.pdf. 32 Flood Management and Border Areas Programme, Department of Water Resources, River Development, and Ganga Rejuvenation, Ministry of Jal Shakti, accessed on February 12, 2023, https://jalshakti-dowr.gov.in/schemes/flood-management-programme. 33 Flood Management & Border Areas Programme Dashboard, accessed on February 13, 2023, https://pmksy-mowr.nic.in/fmbap/. 34 Schedule VII, Constitution of India, https://legislative.gov.in/sites/default/files/COI.pdf. 35 Finance Commission in Covid Times, Report for 2021-26, 15th Finance Commission, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/Rep orts/XVFC%20VOL%20I%20Main%20Report.pdf. 36 National Floodplains Zoning Policy, Press Information Bureau, Ministry of Jal Shakti, March 14, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1805812#:~:text=A %20model%20draft%20bill%20for,of%20use%20of%20flood%20pl ain. 37 'What is the Sendai Framework for Disaster Risk Reduction?', United Nations Office for Disaster Risk Reduction, accessed on February 16, 2023, https://www.undrr.org/implementing-sendaiframework/what-sendai-framework. 38 Unstarred Question No. 1193, Rajya Sabha, Ministry of Jal Shakti, answered on February 13, 2023, https://pqars.nic.in/annex/259/AU1193.pdf. 39 Report No. 39 of 2017 (Performance Audit), 'Rejuvenation of River Ganga (Namami Gange)', Comptroller and Auditor General of India, https://cag.gov.in/en/audit-report/details/34506. 40 Unstarred Question No. 1608, Lok Sabha, Ministry of Jal Shakti, answered on December 15, 2022, https://pqals.nic.in/annex/1710/AU1608.pdf. 

## Annexure: Jal Shakti Table 13: Status Of Odf Plus Coverage

| % ODF Plus        | % of population living in households    |
|-------------------|-----------------------------------------|
| State             | Total Villages                          |
| ODF Plus          |                                         |
| Villages          | Villages                                |
| Andaman & Nicobar |                                         |
| Islands           |                                         |
| 189               | 189                                     |
| Andhra Pradesh    | 18,709                                  |
| Arunachal Pradesh | 5,357                                   |
| Assam             | 25,493                                  |
| Bihar             | 36,858                                  |
| Chhattisgarh      | 18,798                                  |
| D&N D&D           | 97                                      |
| Goa               | 365                                     |
| Gujarat           | 18,288                                  |
| Haryana           | 6,769                                   |
| Himachal Pradesh  | 15,900                                  |
| Jammu & Kashmir   | 7,254                                   |
| Jharkhand         | 29,414                                  |
| Karnataka         | 26,190                                  |
| Kerala            | 1,509                                   |
| Ladakh            | 238                                     |
| Lakshadweep       | 9                                       |
| Madhya Pradesh    | 50,365                                  |
| Maharashtra       | 40,255                                  |
| Manipur           | 2,556                                   |
| Meghalaya         | 5,832                                   |
| Mizoram           | 694                                     |
| Nagaland          | 1,425                                   |
| Odisha            | 46,778                                  |
| Puducherry        | 108                                     |
| Punjab            | 14,041                                  |
| Rajasthan         | 42,850                                  |
| Sikkim            | 403                                     |
| Tamil Nadu        | 12,525                                  |
| Telangana         | 12,769                                  |
| Tripura           | 1,176                                   |
| Uttar Pradesh     | 95,829                                  |
| Uttarakhand       | 15,049                                  |
| West Bengal       | 41,443                                  |
| Total             | 5,95,535                                |

Note: Improved sanitation facility includes flush to piped sewer system, flush to septic tank, flush to pit latrine, flush to don't know where, ventilated improved pit (VIP)/biogas latrine, pit latrine with slab, twin pit/composting toilet, which is not shared with any other household. Source: Swachh Bharat Mission Grameen 2.0 Dashboard for ODF Plus figures; National Family Health Survey-5 for figures on sanitation coverage; PRS.  
 

State 
Stage of Ground Water 
Extraction (%) 
State 
Stage of Ground Water 
Extraction (%) 
Andhra Pradesh 
29 
Odisha 
44 
Arunachal Pradesh 
1 
Punjab 
166 
Assam 
12 
Rajasthan 
151 
Bihar 
45 
Sikkim 
6 
Chhattisgarh 
50 
Tamil Nadu 
76 
Delhi 
98 
Telangana State 
42 
Goa 
24 
Tripura 
10 
Gujarat 
53 
Uttar Pradesh 
71 
Haryana 
134 
Uttarakhand 
48 
Himachal Pradesh 
38 
West Bengal 
47 
Jharkhand 
31 
Andaman & Nicobar 
1 
Karnataka 
70 
Chandigarh 
81 
Kerala 
53 
Dadra & Nagar Haveli 
133 
Madhya Pradesh 
59 
Daman & Diu 
158 
Maharashtra 
55 
Jammu & Kashmir 
24 
Manipur 
8 
Ladakh 
41 
Meghalaya 
4 
Lakshadweep 
62 
Mizoram 
4 
Puducherry 
69 
Nagaland 
3 
Total 
60 

Source: Dynamic Ground Water Resources of India 2022, Central Ground Water Board; PRS. 

 

## Table 15: Status Of River Interlinking Projects Identified Under The National Perspective Plan

| S. No                                         | Name                      | Rivers           | States concerned                          |
|-----------------------------------------------|---------------------------|------------------|-------------------------------------------|
| Peninsular Component                          |                           |                  |                                           |
| 1(a)                                          |                           |                  |                                           |
| Mahanadi and                                  |                           |                  |                                           |
| Godavari                                      |                           |                  |                                           |
| Feasibility Report (FR)                       |                           |                  |                                           |
| Completed.                                    |                           |                  |                                           |
| Mahanadi (Manibhadra)–                        |                           |                  |                                           |
| Godavari (Dowlaiswaram)                       |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Jharkhand, Madhya Pradesh, Chhattisgarh,      |                           |                  |                                           |
| Telangana, Andhra Pradesh, Odisha, Karnataka  |                           |                  |                                           |
| and                                           |                           |                  |                                           |
| Maharashtra                                   |                           |                  |                                           |
| 1(b)                                          | FR Completed.             |                  |                                           |
| Mahanadi and                                  |                           |                  |                                           |
| Godavari                                      |                           |                  |                                           |
| Mahanadi (Bermul)–                            |                           |                  |                                           |
| Godavari (Dowlaiswaram)                       |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Jharkhand, Madhya Pradesh, Chhattisgarh,      |                           |                  |                                           |
| Telangana, Andhra Pradesh, Odisha, Karnataka  |                           |                  |                                           |
| and                                           |                           |                  |                                           |
| Maharashtra                                   |                           |                  |                                           |
| FR Completed.                                 | 2                         |                  |                                           |
| Godavari (Inchampall)-                        |                           |                  |                                           |
| Krishna (Pulichintala) link                   |                           |                  |                                           |
| Godavari and                                  |                           |                  |                                           |
| Krishna                                       |                           |                  |                                           |
| Odisha, Madhya Pradesh, Chhattisgarh,         |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| 3                                             |                           |                  |                                           |
| Godavari and                                  |                           |                  |                                           |
| Krishna                                       |                           |                  |                                           |
| FR and Detailed Project                       |                           |                  |                                           |
| Report (DPR) Completed                        |                           |                  |                                           |
| Godavari (Inchampalli)-                       |                           |                  |                                           |
| Krishna (Nagarjunasagar)                      |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Odisha, Madhya Pradesh, Chhattisgarh,         |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| 4                                             | FR Completed.             |                  |                                           |
| Godavari and                                  |                           |                  |                                           |
| Krishna                                       |                           |                  |                                           |
| Godavari (Polavaram)                          |                           |                  |                                           |
| - Krishna (Vijayawada)                        |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Odisha, Madhya Pradesh, Chhattisgarh,         |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| 5                                             |                           |                  |                                           |
| Krishna (Almatti) –Pennar                     |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Krishna and Pennar                            |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| FR Completed.                                 |                           |                  |                                           |
| 6                                             |                           |                  |                                           |
| Krishna (Srisailam)–Pennar                    |                           |                  |                                           |
| link                                          |                           |                  |                                           |
| Krishna and                                   |                           |                  |                                           |
| Pennar                                        |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| FR Completed.                                 |                           |                  |                                           |
| 7                                             |                           |                  |                                           |
| Krishna (Nagarjunasagar)-                     |                           |                  |                                           |
| Pennar (Somasila) link                        |                           |                  |                                           |
| Krishna and Pennar                            |                           |                  |                                           |
| Telangana, Andhra Pradesh, Maharashtra and    |                           |                  |                                           |
| Karnataka                                     |                           |                  |                                           |
| FR and DPR Completed.                         |                           |                  |                                           |
| 8                                             |                           |                  |                                           |
| Pennar (Somasila)–                            |                           |                  |                                           |
| Cauvery (Grand Anicut) link                   |                           |                  |                                           |
| Pennar and                                    |                           |                  |                                           |
| Cauvery                                       |                           |                  |                                           |
| Andhra Pradesh, Karnataka, Tamil Nadu, Kerala |                           |                  |                                           |
| and Puducherry                                |                           |                  |                                           |
| FR and DPR Completed.                         |                           |                  |                                           |
| 9                                             |                           |                  |                                           |
| Cauvery (Kattalai)– Vaigai–                   |                           |                  |                                           |
| Gundar link                                   |                           |                  |                                           |
| Cauvery, Vaigai and                           |                           |                  |                                           |
| Gundar                                        |                           |                  |                                           |
| Karnataka, Tamil Nadu, Kerala and Puducherry  | DPR Completed.            |                  |                                           |
| 10                                            | Ken–Betwa link            | Ken and Betwa    | Uttar Pradesh and Madhya Pradesh          |
| DPR Completed. Ken-Betwa                      |                           |                  |                                           |
| Link Project has been                         |                           |                  |                                           |
| approved.                                     |                           |                  |                                           |
| FR Completed.                                 |                           |                  |                                           |
| 11                                            |                           |                  |                                           |
| (i)                                           |                           |                  |                                           |
| Parbati - Kalisindh -                         |                           |                  |                                           |
| Chambal link                                  |                           |                  |                                           |
| Parbati, Kalisindh                            |                           |                  |                                           |
| and Chambal                                   |                           |                  |                                           |
| Madhya Pradesh, Uttar Pradesh and Rajasthan   |                           |                  |                                           |
| requested to be consulted during consensus    |                           |                  |                                           |
| building)                                     |                           |                  |                                           |
| (ii)                                          | Parbati-Kuno-Sindh link   |                  |                                           |
| Parbati, Kuno and                             |                           |                  |                                           |
| Sindh                                         |                           |                  |                                           |
| Madhya Pradesh and Rajasthan                  |                           |                  |                                           |
| Pre-Feasibility Report (PFR)                  |                           |                  |                                           |
| completed                                     | .*                        |                  |                                           |
| 12                                            | Par-Tapi-Narmada link     |                  |                                           |
| Par, Tapi and                                 |                           |                  |                                           |
| Narmada                                       |                           |                  |                                           |
| Maharashtra and Gujarat                       | DPR Completed.            |                  |                                           |
| 13                                            | Damanganga - Pinjal link  |                  |                                           |
| Damanganga and                                |                           |                  |                                           |
| Pinjal                                        |                           |                  |                                           |
| Maharashtra and Gujarat                       | DPR Completed.            |                  |                                           |
| 14                                            | Bedti-Varada link         | Bedti and Varada | Maharashtra, Andhra Pradesh and Karnataka |
| PFR Completed. Draft DPR                      |                           |                  |                                           |
| completed                                     |                           |                  |                                           |
| 15                                            | Netravati - Hemavati link |                  |                                           |
| Netravati and                                 |                           |                  |                                           |
| Hemavati                                      |                           |                  |                                           |
| Karnataka, Tamil Nadu and Kerala              | PFR Completed.            |                  |                                           |
| 16                                            |                           |                  |                                           |
| Pamba - Achankovil -                          |                           |                  |                                           |
| Vaippar link                                  |                           |                  |                                           |
| Pamba, Achankovil                             |                           |                  |                                           |
| and Vaippar                                   |                           |                  |                                           |
| Kerala and Tamil Nadu                         | FR Completed.             |                  |                                           |

* Integration of Eastern Rajasthan Canal Project of Rajasthan and Parbati - Kalisindh - Chambal link. 

Himalayan Component 1 
Manas-Sankosh-Tista- Ganga(M-S-T-G) link 
Manas, Sankosh, Tista and Ganga 
Bhutan and India (Assam, West Bengal and Bihar) 
FR completed. 
2 
Kosi-Ghaghra link 
Kosi and Ghaghra 
Nepal and India (Bihar and Uttar Pradesh) 
PFR completed 
3 
Gandak-Ganga link 
Gandak and Ganga 
Nepal and India (Bihar and Uttar Pradesh) 
FR completed (Indian portion) 
4 
Ghaghra-Yamuna link 
Ghaghra and Yamuna 
Nepal and India (Bihar and Uttar Pradesh) 
FR completed (Indian portion) 
5 
Sarda-Yamuna link 
Sarda and Yamuna 
Nepal and India (Bihar, Uttar Pradesh, Uttarakhand, Haryana and Rajasthan) 
FR completed (Indian portion) 
6 
Yamuna-Rajasthan link 
Yamuna and Sukri 
Gujarat, Rajasthan, Haryana and Uttar Pradesh 
FR completed 
| 7                                 | Rajasthan-Sabarmati link    | Sabarmati      | Gujarat, Rajasthan, Haryana and Uttar Pradesh    | FR completed       |
|-----------------------------------|-----------------------------|----------------|--------------------------------------------------|--------------------|
| 8                                 | Chunar-Sone Barrage link    | Ganga and Sone | Bihar and Uttar Pradesh                          | Draft FR completed |
| 9                                 |                             |                |                                                  |                    |
| Sone Dam - Southern               |                             |                |                                                  |                    |
| Tributaries of Ganga link         |                             |                |                                                  |                    |
| Sone and Badua                    | Bihar and Jharkhand         | PFR completed  |                                                  |                    |
| 10                                |                             |                |                                                  |                    |
| Ganga (Farakka)- Damodar-         |                             |                |                                                  |                    |
| Subernarekha link                 |                             |                |                                                  |                    |
| Ganga, Damodar                    |                             |                |                                                  |                    |
| and Subernarekha                  |                             |                |                                                  |                    |
| West Bengal, Odisha and Jharkhand |                             |                |                                                  |                    |
| FR completed; DPR in              |                             |                |                                                  |                    |
| progress                          |                             |                |                                                  |                    |
| 11                                |                             |                |                                                  |                    |
| Subernarekha- Mahanadi            |                             |                |                                                  |                    |
| link                              |                             |                |                                                  |                    |
| Subernarekha and                  |                             |                |                                                  |                    |
| Mahanadi                          |                             |                |                                                  |                    |
| West Bengal and Odisha            | FR completed                |                |                                                  |                    |
| 12                                | Kosi-Mechi Link             | Kosi and Mechi | Nepal and India (Bihar and West Bengal)          | PFR completed      |
| 13                                |                             |                |                                                  |                    |
| Ganga (Farakka)-                  |                             |                |                                                  |                    |
| Sunderbans link                   |                             |                |                                                  |                    |
| Ganga and                         |                             |                |                                                  |                    |
| Ichhamati                         |                             |                |                                                  |                    |
| West Bengal                       | FR completed                |                |                                                  |                    |
| 14                                |                             |                |                                                  |                    |
| Jogighopa-Tista-Farakka link      |                             |                |                                                  |                    |
| (Alternative to M-S- T-G)         |                             |                |                                                  |                    |
| Manas, Tista and                  |                             |                |                                                  |                    |
| Ganga                             |                             |                |                                                  |                    |
| Assam, Bihar and West Bengal      | Dropped                     |                |                                                  |                    |

Source: Unstarred Question No. 1608, Lok Sabha, Ministry of Jal Shakti, answered on December 15, 2022; PRS. 

## Demand For Grants 2023-24 Analysis Health And Family Welfare

The Covid-19 pandemic has acutely highlighted issues in the Indian public health system and the extent to which it can respond to public health crises.  Where health refers to physical, mental, and social well-being, public health refers to the measures to maintain health at the scale of a society or state.1  In India, states bear the responsibility for public health and sanitation, including hospitals and clinics.  The Ministry of Health and Family Welfare broadly takes responsibility for formulating policy for public health.  It provides administrative and financial support to states to operate public health facilities and infrastructure, and to deal with specific health issues, such as maternal health and nutrition.  It also establishes and runs medical Institutes of National Importance such as AIIMS as well as establishments in union territories including Delhi. The Ministry comprises (i) the Department of Health and Family Welfare, which is responsible for implementing public health schemes and regulating medical education, and (ii) the Department of Health Research which is responsible for conducting medical research.2  The Department of Health and Family Welfare administers the National Health Mission, which receives the largest share of the Ministry's budget and includes transfers of funds to states for specific purposes such as strengthening health infrastructure.  Other transfers to states include funding for human resources, medical education, and the Covid-19 vaccination.  Transfers to states also include transfers as per the recommendations of the 15th Finance Commission (more than one lakh crore rupees for improving primary health infrastructure). One of the key issues with the health sector in India has been the low investment in primary healthcare.  This has resulted in inadequate health infrastructure including human resources, and slow improvement in key health indicators.  The lack of public healthcare infrastructure has led people to use private health services more, and that has increased the financial burden on citizens.  This note examines the budget of the Ministry of Health and Family Welfare along with the key financing issues in the health sector in India. 

## Overview Of Finances

In 2023-24, the Ministry of Health and Family Welfare has been allocated Rs 89,155 crore.3  This is an increase of 13% over revised estimates for 2022-23.  The Department of Health and Family Welfare has been allocated Rs 86,175 crore, which accounts for 97% of the Ministry's expenditure.  The Department of Health Research has been allocated Rs 2,980 crore. 

## Budget Speech Highlights, 2023-24

The Finance Minister, Ms. Nirmala Sitharaman, made the following announcements in her budget speech:  

- New nursing colleges will be established, co-located with 157 
recently-established medical colleges. 
- A Mission to eliminate sickle cell anaemia by 2047 will be 
launched in 2023-24, involving screening of seven crore people. 
- Facilities in select ICMR Labs will be made available for 
research by public and private medical college faculty and the private sector. 

 
2021-22 
Actuals 
2022-
23 RE 
2023-
24 BE 
% change 22-23 
RE to 23-24 BE 
81,780 
76,370 
86,175 
12.8% 
Health & Family Welfare Health Research 
2,691 
2,775 
2,980 
7.4% 
Total 
84,470 
79,145 
89,155 
12.6% 

Note: BE - Budget Estimate; RE - Revised Estimate. Sources: Demand Numbers 46 and 47, Expenditure Budget 2022-23; PRS. 

Between 2012-13 and 2023-24, allocation towards the Department of Health and Family Welfare has increased at an annual average rate of 12%.  The allocation increased from Rs 25,133 crore in 2012-13 to Rs 86,175 crore in 2023-24 (see Figure 1).   
 
Note: BE - Budget Estimate; RE - Revised Estimate; For 2023-24, the % change in allocation is 2023-24 BE over 2022-23 RE.  
Sources: Union Budgets, 2006-07 to 2021-22; PRS. In 2023-24, 33% of the Ministry's budget has been allocated towards the National Health Mission (see Table 2).  The next highest allocation, at 19%, is towards the regulatory and autonomous bodies, at Rs 17,323 crore. Allocation towards the insurance scheme, PMJAY, is estimated at Rs 7,200 crore, which is 12% more than the revised estimate for 2022-23.   
Allocation towards PM ABHIM, which seeks to create primary health infrastructure, increased from Rs 1,885 crore in 2022-23 RE to Rs 4,200 crore in 2023-24 BE (an increase of 123%).  PMSSY is a scheme for the establishment of new AIIMS and the upgrading of Government Medical Colleges across states.  Allocation for PMSSY has is Rs 3,365 crore in 2023-24 BE.  In addition, a head has been created for new AIIMS, under which Rs 6,835 crore has been allocated.  Together, they amount to a total of Rs 10,200 crore.  This is a 23% increase from revised estimates for 2022,23 (Rs 8,270 crore).  Expenditure towards COVID-19-related measures under the Department of Health and Family Welfare has been reduced from Rs 16,445 crore in 2021- 22 to Rs 497 crore in 2023-24 BE.   

|                  | 2021-22    |
|------------------|------------|
| Actuals          |            |
| 2022-            |            |
| 23 RE            |            |
| 2023-            |            |
| 24 BE            |            |
| % change         |            |
| (22-23 RE        |            |
| to 23-24         |            |
| BE)              |            |
| 27,448           | 28,974     |
| Mission (total)  |            |
| 8,459            | 10,348     |
| JIMPER, and      |            |
| other autonomous |            |
| bodies           |            |
| PMJAY            | 3,116      |
| New AIIMS        |            |
| PM ABHIM         | 761        |
| PMSSY            | 9,270      |
| CGHS             | 2,741      |
| 2,126            | 2,182      |
| and STD Control  |            |
| Programme        |            |
| ICMR             | 1,841      |
| 300              | 474        |
| Schemes          |            |
| COVID-19         | 16,445     |
| National Digital |            |
| Health Mission   |            |
| 28               | 140        |
| Others           |            |
| Total            | 84,470     |

Note: Expenditure on COVID includes allocation towards both phases of COVID-19 emergency response, vaccination of healthcare and frontline workers, insurance for healthcare workers, and procurement of COVID-19 testing kits; BE - Budget Estimate; RE - Revised Estimates; AIIMS - All India Institute of Medical Sciences (New Delhi); ICMR - Indian Council of Medical Research; CGHS - Central Government Health Scheme; PMJAY - Pradhan Mantri Jan Arogya 

## Pradhan Mantri Swasthya Suraksha Nidhi (Pmssn) And Health And Education Cess

The 4% Health and Education Cess on income was introduced in 2018-19.  In reports on years 2018-19 and 2019-20, the Comptroller and Auditor General (CAG) had observed that although the Cess had been created, the principles for allocating this amount towards the health sector had not been specified, and no dedicated fund had been created to receive monies for this purpose.4,5  From 2021-22, collections under this cess that are earmarked for healthcare are credited to a dedicated non-lapsable fund, the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN).6   
In 2023-24, Rs 14,589 crore will be transferred to the PMSSN (from the cess collections).  This is 29% lower than the amount transferred in 2022-23 RE.  However, collections under the cess are estimated to increase by 19% in the same period (to Rs 69,063 crore).7  Funds from PMSSN will be spent on the National Health Mission and PMJAY.8 The Ministry of Finance had stated that 25% of the funds collected through this cess will be used for health schemes.9  In 2023-24, the amount estimated to be transferred to the PMSSN is lower than 25% of the total receipts through the cess (by Rs 2,677 crore).  However, as per the revised estimates for 2022-23, the amount transferred to PMSSN is higher than the 25% share of cess collections in that year. 

Sources: Tax Revenue, Receipt Budget 2023-24; Demand Number 46, Expenditure Budget 2023-24; PRS. 

## Issues To Consider Allocations Fall Short Of Health Policy Targets

Insufficient investment in public health infrastructure can have negative consequences on access to healthcare, and consequently on health indicators.  The National Health Policy, 2017 proposed that the overall government expenditure on public health (central and governments combined) should be at 2.5% of GDP.10  As per the Economic Survey 2022-23, the overall public health expenditure was at 1.6% of GDP in 2020-21 (actuals) and estimated at 2.1% of GDP in 2022-23 (BE).11 As per the National Health Accounts, in 2018-19, 4.8% of the expenditure of general government (total of central and state governments) was allocated towards healthcare.12  The WHO has noted that India's allocation towards health in 2018-19 was low compared to other countries such as Malaysia (8.5%), Russia (10.2%), 

## 

Brazil (10.5%), and South Africa (15.3%).13  This figure is much higher in developed economies, such as the United Kingdom (19.7%), the United States of America 
(22.4%), and Germany (20.1%). 

The estimated expenditure of the Department of Health and Family Welfare in 2023-24 is Rs 86,175 crore, approximately 2% of total central government expenditure for 2023-24.  This is an increase of 13% over the revised estimates for 2022-23.   

## Primary Healthcare Infrastructure Needs More Improvement

Primary healthcare encompasses the treatment of common health issues, providing essential drugs, maternal and child care, immunisation, and other preventive measures.14  Assuring free, comprehensive primary care is a key objective of the National Health Policy (2017).10  Effective primary healthcare can prevent or pre-empt the occurrence of more serious health issues, meaning that overall health outcomes can be improved significantly through investing in primary healthcare.15 Primary healthcare is provided by states through a threetiered system, consisting of Sub-Centres (SCs), Primary Healthcare Centres (PHCs), and Community Healthcare Centres (CHCs).16  As of March 31, 2022, there were 1,61,829 SCs, 31,053 PHCs, and 6,064 CHCs across India.16  Each tier is subject to upper thresholds for population coverage as per the Indian Public Health Standards (IPHS), 2022.17,18  As per the Rural Health Statistics 2021-22, while the population covered by the SCs centres has improved, it worsened in PHCs and CHCs.  The numbers of all three types of centres that are currently operational fall short of targets based on these thresholds; SCs have a shortfall of 25%, PHCs of 31%, and CHCs of 36%.  While the number of centres has increased, this increase has not kept pace with projected population growth. 

## System

| 2021-22    | %        |
|------------|----------|
| -          |          |
|            |          |
|            | Target   |
| 2020-21    |          |
| coverage   | coverage |
| -          |          |
|            |          |
| SCs        | 5,000    |
| -          |          |
|            |          |
| PHCs       | 30,000   |
| -          |          |
|            |          |
| CHCs       | 1,20,000 |

Source: Rural Health Statistics 2021-22, 2020-21; PRS 
In the union budget 2017-18, it was announced that 1.5 lakh SCs and PHCs will be transformed into Health and Wellness Centres (HWCs) by December 2022.  The National Health Policy, 2017 set a goal of creating HWCs which will provide an extended range of primary care services.10  These would include geriatric health care, palliative care, and rehabilitative services.  As on February 16, 2023, 1.6 lakh Health and Wellness Centres are operational across the country.19  

## Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (Pm Abhim)

Under PM ABHIM, financial support is provided to states to expand comprehensive primary health care.20  
This includes setting up 17,788 HWCs at the SC level in rural areas, and 11,244 HWCs in urban areas.  In addition, the Mission supports the creation of 3,382 block public health units, public health laboratories in all districts, and critical care blocks in all districts with a population greater than 5 lakh.21 The scheme has a planned total outlay of Rs 64,180 crore from 2021-22 to 2025-26.22  A portion of funds for PM ABHIM is transferred to states, the Centrally Sponsored Scheme component.20  Another portion, the Central Sector component, is used directly by the Department of Health and Family Welfare to establish health facilities such as critical care blocks.20  In 2023- 24, the Centrally Sponsored Scheme component has been allocated Rs 4,200 crore, a 123% increase from the revised estimates for 2022-23 (Rs 1,885 crore).  In 2022- 23, allocation to this component has been decreased by 55% from Rs 4,177 crore at the budget stage to Rs 1,885 crore at the revised stage.  The decline between these stages is even more steep for the Central Sector portion, which was revised to Rs 282 crore from Rs 979 crore - a decline of 71%.  This indicates a lack of ability to utilise funds properly. The lack of public healthcare infrastructure also pushes people towards private healthcare systems.  Data from 2017-18 collected in the 75th round of the National Sample Survey shows that 42.5% of ailments are treated in private clinics, and 23.3% in private hospitals. 23 Private healthcare tends to be more expensive and increased the financial burden on individuals (discussed in detail on page 119).  

## Funding For The National Health Mission Has Declined In Real Terms

The Department of Health and Family Welfare supports states in providing primary healthcare through the National Health Mission (NHM).  The NHM consists of two sub-missions, the National Rural Health Mission (NRHM) and National Urban Health Mission (NUHM). Under NHM, funding is provided for specific public health schemes directed at achieving specific health outcomes, such as reduction in maternal and infant mortality rates, reduction in out-of-pocket expenditure (OOPE) on healthcare, and reduction in the prevalence of diseases such as malaria and kala azar.  States are given the flexibility to choose how funds are utilised, within guidelines.  The National Rural Health Mission includes programmes such as Reproductive, Maternal, Newborn, Child Health and Adolescent (RMNCH+A) Services, under which maternal and neo-natal health are provided, as well as immunisation and health services for children and adolescents.  Other components include strengthening of states' health systems in terms of infrastructure and human resources, and implementing programmes for communicable and non-communicable diseases. In March 2022, the Standing Committee on Health and Family Welfare recommended increasing allocation towards the NHM given its high rate of utilisation and considering its importance in increasing access to primary healthcare.28  The Committee recommended substantially increasing allocations at the revised estimates stage of 2022-23.  However, as per the revised estimates for 2022-23, the allocation has been increased by a mere 0.4% (Rs 29,085 crore).  In the context of projected 6.4% real GDP growth, this is effectively a decline in expenditure.  76% of this amount has been allocated towards the Flexible Pool for RCH & Health System Strengthening under both NRHM and NUHM (Rs 22,095 crore).  23% is allocated for infrastructure maintenance (Rs 6,798 crore).   

## Under-Investment In Primary Healthcare Affects Health Outcomes

Schemes such as the NHM have set targets for these indicators such as Infant Mortality Rate (IMR) and the prevalence of anaemia.  Data indicates that these targets are yet to be achieved.  IMR is the number of deaths of infants (less than a year in age) that occur per 1000 live births.  IMR provides a crude metric for the effectiveness of a healthcare system in a given population.  The NHM has set a target for IMR of less than 25 per 1000 live births.24  As per the latest data from the Sample Registration System (2020), IMR in India is estimated to be 28 per 1000 live births.25 Anaemia among women is a key indicator of nutrition and health since it can have significant adverse health consequences for both women and children, but can be addressed via primary care.26  NFHS 2019-21 reveals that 53% of women between ages 15 and 49 have anaemia, much higher than the global rate of 30% for this age bracket.13,27  

## Healthcare Is Still Expensive At The Point Of Receiving Treatment

Healthcare is paid for by the government at the central and state level, charitable institutions, or by individuals themselves.  In India, the share of expenditure by individuals (also known as out-of-pocket expenditure or OOPE) is high as compared to other countries.  The lack of public investment in healthcare has led to dependence on private healthcare providers, which are typically more expensive.  While OOPE in India has declined from 64.2% of the total health expenditure in 2014 to 48.2% in 2019, it is still fairly high.11  The Standing Committee (2022-23) on Health and Family Welfare noted that India ranks 176 out of 196 countries in terms of the percentage of current health expenditure spent out of pocket.28   
The 75th Round of the National Sample Survey revealed that there is a significant gap in out-of-pocket treatment costs between the private and public sectors.23  In 2017- 18, the average medical cost of hospitalisation was Rs 4,452 in government hospitals and Rs 31,845 in private hospitals.23  In rural areas, the average out-of-pocket cost for non-childbirth hospitalisations was Rs 4,290 in government hospitals and Rs 27347 in private hospitals. 29  These figures are higher in urban areas, with an average cost of Rs 4,837 in government hospitals and Rs 38,822 in private hospitals.23  Individuals also fund health expenditure through borrowings.  The survey shows that 13.4% of the hospitalisation cases in rural areas and 8.5% in urban areas were financed by individuals through borrowings.23 OOPE can be significantly higher for secondary and tertiary care.  This is especially the case for medical care which requires specialised, capital-intensive facilities, such as cancer treatment.  The Standing Committee on Health (2022-23) noted that patients resort to cancer treatment in private hospitals despite their high cost since there are only 50 public tertiary hospitals offering cancer treatment, compared to 200 such hospitals in the private sector.  Further, radiotherapy treatment is expensive due to the high cost of the necessary equipment.30  As there is no involvement of drugs in radiotherapy, treatment charges are effectively service charges and cannot be capped by the National Pharmaceutical Pricing Authority (NPPA).30 To address high OOPE for cancer treatment, the Committee recommended the reservation of 25% of cancer facilities in private hospitals for Pradhan Mantri Jan Arogya Yojana (PMJAY) beneficiaries as well as the expansion of government-run oncology treatments.30 

## Public Health Insurance Does Not Cover All Treatment Costs

The Pradhan Mantri Jan Arogya Yojana (PMJAY) is a public health insurance scheme which is aimed at reducing OOPE.  The scheme provides health insurance of up to five lakh rupees to families based on criteria identified using the Socio-Economic Caste Census, 2011 (SECC).  As per these criteria, the eligible population of is estimated to consist of 13 crore families, consisting of 65 crore individuals.31,32  The criteria include occupation, 
 
access to shelter, and other demographic factors.  The scheme may be availed in empanelled hospitals, and eligible families each receive an e-card with a unique ID, called an Ayushman Card.33,34   

| Amount of    | Number of    |
|--------------|--------------|
| Ayushman     | funds        |
|              |              |
|              |              |
| Cards        |              |
| Number of    |              |
| hospitals    |              |
| empanelled   |              |
|              |              |
| generated    |              |
|              |              |
| released     |              |
| (Rs crore)   |              |
|              |              |
| 2019-20      |              |
|              |              |
| 4,80,71,333  |              |
|              |              |
| 8,331        |              |
|              |              |
| 2,993        |              |
|              |              |
| 2020-21      |              |
|              |              |
| 3,22,36,112  |              |
|              |              |
| 2,543        |              |
|              |              |
| 2,544        |              |
|              |              |
| 2021-22      |              |
|              |              |
| 2,37,34,262  |              |
|              |              |
| 3,273        |              |
|              |              |
| 2,941        |              |
|              |              |
| 2022-23      |              |
|              |              |
| 4,23,17,571  |              |
|              |              |
| 12,108       |              |
|              |              |
| 4,030        |              |
|              |              |

Note: Data for 2022-23 is up to December 2022. Source: Lok Sabha Unstarred question No. 620, answered on December 6, 2022, Ministry of Health and Family Welfare; PRS 
A study conducted for the National Health Authority in 2019 revealed that in some states awareness of the scheme among eligible populations is low.35  In 2022, the Standing Committee on Health and Family Welfare recommended conducting awareness programmes to ensure that eligible beneficiaries can avail of the scheme.28  The Committee also raised the issue of the reach of the scheme, noting that SECC data is likely to be outdated, and recommended expanding the list of beneficiaries.  Another study under the NHA (2019) revealed that although the scheme is intended to provide free treatment for secondary and tertiary care, technical issues with the PMJAY portal (through which the discharge procedure is conducted) and medical care which is not covered by PMJAY often require patients to pay out-of-pocket.36 In 2022, the Standing Committee on Health and Family Welfare observed the underutilisation of funds earmarked for PMJAY.  Despite this, allocation to the scheme has increased, and the Committee recommended that the Ministry of Health and Family Welfare take measures to ensure the judicious use of funds under the Scheme.  In 2023-24, Rs 7,200 has been allocated for PMJAY, which is a 12% increase over revised estimates for 2022-23.  Note that the allocation to PMJAY in 2023-24 is significantly higher than the amount actually spent in 2020-21 (Rs 2,681 crore) and 2021-22 (Rs 3,116 crore) when hospitalisations had increased substantially due to Covid-19.   

## Insufficient Personnel For Primary Healthcare

As compared to the Indian Public Health Standards (IPHS), the primary healthcare system in India suffers from significant shortfalls in personnel.  Data from the National Medical Commission (2022) suggests that India has exceeded WHO targets for the number of doctors per 1,000 population while assuming an 80% availability of registered allopathic doctors.37  However, the Rural Health Statistics 2020-21 (latest available data) shows a shortfall of doctors and other medical workers in the primary healthcare system.38  In PHCs, there are significant shortfalls in several categories of personnel, including Pharmacists, Laboratory Technicians, and 
 
Health Assistants.16 

Shortfall 
Post 
Required As 
Per IPHS (#) 
Shortfall (#) 
(%) 
Doctors 
24,935 
776 
3% 
Pharmacists 
24,935 
5,969 
24% 
Laboratory Technicians 
24,935 
10,434 
42% 
Nursing Staff (Staff Nurse) 
24,935 
4,211 
17% 

Source: Rural Health Statistics 2020-21, 2019-20; PRS. 

There is a shortfall of 66% of Health Workers (Male) in SCs.  CHCs are the first tier of the public healthcare system in which patients have access to specialists, which include surgeons, physicians, paediatricians, obstetricians and gynaecologists.  There is a shortfall of almost 80% of these specialists.16  As a percentage of required posts, the shortfall of specialists is highest in Bihar (89%), Madhya Pradesh (85%), and Goa (83%).16 It is lowest in Kerala, Meghalaya, Sikkim, and Mizoram, where all posts are filled.16  As per the budget speech 2023-24, 157 nursing colleges are to be established, and these would be attached to existing medical colleges.  In 2023-24, the allocation towards the development of Nursing Services (a Central Sector Scheme to upgrade nursing education) has been increased by 34% from 2022-23 revised estimates to Rs 33 crore.   

## Aiims, Autonomous Institutions, And Pradhan Mantri Swasthya Suraksha Yojana (Pmssy)

The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) is aimed at addressing the shortfall of human resources and educational capacity in the tertiary care system.39  It aims to do so through the creation of new All India Institutes of Medical Sciences (AIIMS) and upgrading the Government Medical Colleges.  Under the Scheme, 22 new AIIMS are to be established, of which six are operational.40 In 2018, the CAG conducted an audit of the scheme covering 2003 to 2017.  The scheme was found to have been affected by a lack of planning guidelines, delays of up to five years, shortages in faculty posts, and shortages of hospital beds.  The Standing Committee on Health and Family Welfare (2022-23) found that roughly 77% of the funds allocated as per 2021-22 revised estimates had been utilised. 41  The Committee recommended that the Ministry take measures to ensure effective utilisation, such as planning utilisation throughout the year, and monitoring progress.41  The Committee did, however, emphasise the importance of the scheme for strengthening underserved areas. In 2023-24, PMSSY has been allocated Rs 3,365 crore, and Rs 6,835 crore has been allocated under a new budget head for the establishment expenditure for new AIIMS.  This amounts to a total of Rs 10,200 crore, 23% more than revised estimates for 2022,23 (Rs 8,270 crore). 

## Lack Of Investment In Health Research

The Department of Health Research played a key role in the management of the COVID-19 pandemic, as it bears responsibility for overseeing the establishment of testing infrastructure in India.42  In 2022, the Standing Committee on Health recommended that the Department of Health Research be allocated at least 0.1% of GDP for five years, specifying that this allocation should amount to 5% of the total health budget.42  This would help create infrastructure and capacity to manage any future pandemics.2  In 2022, the Committee noted that countries such as the USA spend as much as 2% of their GDP on health research.43 In 2023-24, the Department has been allocated Rs 2,980 crore, which is 3% of the budget of the Ministry, and amounts to 0.01% of GDP.  The allocation towards infrastructure development for health research has decreased from Rs 152 crore in 2022-23 RE to Rs 150 crore in 2023-24 BE. The Standing Committee (2022) also noted that the Department could not utilise the budget partly due to a lack of human resource capacity, which contributed to issues in managing the COVID-19 pandemic.44  It recommended that the Department expand its capacity to better utilise funds.44  The allocation to human resource and capacity development has increased by 9% from the revised estimates of 2022-23 to Rs 92 crore in 2023-24.   

## Digital Health Technology Eco-System

The National Health Policy, 2017, has set a goal of establishing a 'Digital Technology Eco-System', through which information technology would be used to increase the efficiency of the healthcare system. This involves the development of infrastructure, standards, databases, and governance frameworks for the collection, storage, and sharing of medical information.10 The National Digital Mission (NDHM) provides for every citizen to have their health records stored digitally in a consolidated database, to facilitate easier access when receiving medical treatment.45  Under this scheme, patients may be allotted an Ayushman Bharat Health Account (ABHA) number, which uniquely identifies their medical records.45  As of February 13, 2023, more than 32 crore accounts have been opened, and more than 22 crore medical records have been linked to the database.46  The proposed allocation for ABDM has increased by 144% from revised estimates of 2022-23 to Rs 341 crore in 2023-24. 

## Expenditure On Covid-19

Between 2020 and 2022, the Ministry had to allocate a 
significant portion of the funds towards addressing the Covid-19 
pandemic, including vaccine development and implementation.  
However, with the number of Covid cases declining, mortality 
reducing, and an estimated 90% of eligible beneficiaries being 
fully vaccinated, allocation towards Covid-19 related 
programmes have been reduced substantially.   

In 2021-22, Rs 14,333 crore was spent on the Covid-19 
Emergency Response and Health System Preparedness 
Package.  In 2023-24, this has been reduced to Rs 2 crore.  In 
2021-22, Rs 35,438 crore was spent on the vaccination 
programme.  As per the revised estimates of 2022-23, Rs 967 
crore will be spent on vaccination.  In 2023-24, a token amount 
of Rs 10 lakh has been allocated for vaccination.   

and number of deaths, year-wise  
|            | 2020        | 2021      | 2022    |
|------------|-------------|-----------|---------|
| Cured/     |             |           |         |
| Discharged |             |           |         |
| 98,60,280  | 2,44,06,083 | 98,77,487 |         |
| Deaths     | 1,48,738    | 3,32,342  | 49,553* |

Note: the number of deaths in 2022 has been estimated by subtracting total deaths in 2020 and 2021 from a cumulative figure from December 6, 2022. Sources: Lok Sabha Unstarred Question No. 955, Ministry of Health and Family Welfare, July 22, 2022; Lok Sabha Unstarred Question No. 658, Ministry of Health and Family Welfare, December 9, 2022; PRS. 

## 

6 S.O. 1220(E), Ministry of Health And Family Welfare, Match 15, 2021, https://egazette.nic.in/WriteReadData/2021/225933.pdf. 7 Tax Revenue, Receipt Budget 2023-24; 
https://www.indiabudget.gov.in/doc/rec/allrec.pdf.  
8 Demand No 46, Ministry of Health and Family Welfare, Expenditure Budget 2023-24, https://www.indiabudget.gov.in/doc/eb/sbe46.pdf. 9 Report No. 31 of 2022 -  Financial Audit of Accounts of the Union Government for the year 2020-21, Comptroller and Auditor General of India, December 21, 2022, https://cag.gov.in/uploads/download_audit_report/2022/DSC-Report- No.-31-of-2022_UGFA-English-PDF-A- 063a2f3ee1c14a7.01369268.pdf. 10 National Health Policy, 2017, https://www.nhp.gov.in/nhpfiles/national_health_policy_2017.pdf. 11 Chapter 6, "Social Infrastructure and Employment: Big Tent", Economic survey 2022-23, Union Budget 2023-24, https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/echap0 6.pdf. 12 National Health Accounts Estimates for India 2018-19, Ministry of Health and Family Welfare, https://nhsrcindia.org/sites/default/files/2022-09/NHA%202018-19_07- 09-2022_revised_0.pdf. 13 "World Health Statistics 2022", World Health Organisation, May 19, 2022, https://www.who.int/publications/i/item/9789240051157. 14 National Health Profile 2021, Ministry of Health and Family Welfare, https://www.cbhidghs.nic.in/showfile.php?lid=1160. 15 Chapter 5, "Healthcare takes centre stage, finally!", Economic Survey 2020-21 Volume I, Ministry of Finance, https://www.indiabudget.gov.in/budget2021- 22/economicsurvey/doc/vol1chapter/echap05_vol1.pdf. 16 Rural Health Statistics, 2021-22, https://main.mohfw.gov.in/sites/default/files/RHS%202021%2022.pdf. 17 Indian Public Health Standards 2022, Volume-IV: Health and Wellness Centre-Sub Health Centre, Ministry of Health and Family- Welfare, https://nhm.gov.in/images/pdf/guidelines/iphs/iphs-revisedguidlines-2022/04-SHC_HWC_UHWC_IPHS_Guidelines-2022.pdf. 18 Indian Public Health Standards 2022, Volume-II: Community Health Centre, , Ministry of Health and Family Welfare, https://nhm.gov.in/images/pdf/guidelines/iphs/iphs-revised-guidlines- 2022/02-CHC_IPHS_Guidelines-2022.pdf. 19 "Ayushman Bharat - Health and Wellness Centres Report Card", Ayushman Bharat - Health and Wellness Centre, Ministry of Health and Family Welfare, https://ab-hwc.nhp.gov.in/#about (accessed February 6, 2023) 20 Operational Guidelines for Pradhan Mantri Ayushman Bharat Health Infrastructure Mission, Ministry of Health and Family Welfare, October 2021, https://main.mohfw.gov.in/sites/default/files/Operational%20Guideline %20%28CSS%20Component%29_PM-ABHIM.pdf. 21 Rajya Sabha Unstarred Question No. 2176 , Department of Health and Family Welfare, Ministry of Health and Family Welfare, March 22, 2022, https://pqars.nic.in/annex/256/AU2176.pdf 22 Rajya Sabha Unstarred Question No. 2176, Ministry of Health and Family Welfare, March 22, 2022, https://pqars.nic.in/annex/256/AU2176.pdf. 23 "Key Indicators of Social Consumption in India: Health, NSS 75th Round (July 2017 - June 2018)", National Statistical Office, Ministry of Statistics and Programme Implementation, November, 2019, http://164.100.161.63/sites/default/files/publication_reports/KI_Health
_75th_Final.pdf. 

24 "More Information", National Health Mission, Ministry of Health and Family Welfare, https://nhm.gov.in/images/pdf/NHM/NHM_more_information.pdf.  
27 "National Family Health Survey (NFHS-5), Compendium of Fact Sheets India and 14 States/UTs (Phase-11)", Ministry of Health and Family Welfare, https://main.mohfw.gov.in/sites/default/files/NFHS- 5_Phase-II_0.pdf. 

28 Report No. 134 of the Standing Committee on Health and Family Welfare, on "Demands for Grants 2022-23 (Demand No. 46) of the Department of Health and Family Welfare", Rajya Sabha, March 24, 
2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Report File/14/160/134_2022_3_15.pdf 29 "Executive Summary on Report- Health in India, NSS 75th round", Ministry of Statistics and Programme Implementation, http://164.100.161.63/announcements/executive-summary-reporthealth-india-nss-75th-round. 30 Report No. 139 of the Standing Committee on Health and Family Welfare, on "Cancer Care Plan & Management: Prevention, Diagnosis, Research & Affordability of Cancer Treatment", Rajya Sabha, September 12, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Report File/14/160/139_2022_9_17.pdf. 31 Lok Sabha Unstarred question No. 620, December 9, 2022, Ministry of Health and Family Welfare, https://pqals.nic.in/annex/1710/AU620.pdf. 32 Ayushman Bharat Pradhan Mantri Jan Arogya Yojana Annual Report 2020-21, Ministry of Health and Family Welfare, https://nha.gov.in/img/resources/Annual-Report-2020-21.pdf. 33 "Guidelines on Hospital Empanelment and De-Empanelment: 
Ayushman Bharat Pradhan Mantri Jan Arogya Yojana", National Health Authority, July 2022, https://pmjay.gov.in/sites/default/files/2022- 09/OM%20with%20Revised%20Hospital-Empanelment-Guidelines- July%2022.pdf. 34 "Beneficiary Identification Guidelines: Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY), https://www.pmjay.gov.in/sites/default/files/2018- 07/GuidelinesonProcessofBeneficiaryIdentification_0.pdf. 35 "Accessing Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana (PM-JAY): A case study of three states (Bihar, Haryana and Tamil Nadu), Umakant Dash, V. R. Muraleedharan, and Rajesh M., National Health Authority, https://pmjay.gov.in/sites/default/files/2021- 05/Working%20paper%20006- %20A%20case%20study%20of%20three%20states%20under%20AB %20PM-JAY.pdf. 36 "Improving Hospital‐Based Processes For Effective Implementation of PMJAY: Evidence From Early Implementation", Mayur Trivedi, Anurag Saxena, Dileep Mavalankar, Manas Sharma, National Health Authority, https://pmjay.gov.in/sites/default/files/2021- 05/Working%20paper%20007-%20Improving%20Hospital%20- %20Based%20Processes%20for%20Effective%20Implementation%20 of%20PM-JAY%20%281%29.pdf. 37 Rajya Sabha Unstarred Question No. 1039,  July 26, 2022, Ministry of Health and Family Welfare, https://pqars.nic.in/annex/257/AU1039.pdf. 38 "Health Workforce Requirements for Universal Health Coverage and the Sustainable Development Goals", World Health Organisation, 
2016, https://apps.who.int/iris/bitstream/handle/10665/250330/978924151140 7-eng.pdf. 39 Guidelines for Implementation of Pradhan Mantri Swasthya Surakhsa Yojana (PMSSY) Scheme, Ministry of Health and Family Welfare, https://pmssymohfw.nic.in/files/Draft%20Guidelines%20for%20PMSSY%20Schem e.pdf. 40 "About Scheme", Pradhan Mantri Swasthya Suraksha Yojana, Ministry of Health and Family Welfare, last accessed February 9, 2023, https://pmssymohfw.nic.in/index1.php?lang=1&level=1&sublinkid=81&lid=127.  
 
 
https://rajyasabha.nic.in/rsnew/committee_site/committee_file/reportfil e/14/160/140_2022_12_12.pdf. 

File/14/160/141_2022_12_12.pdf. 43 Report No. 135, Standing Committee on Health and Family Welfare: "Demands For Grants 2022-23 (Demand No. 47) of the Department of Health Research: https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Report File/14/160/135_2022_8_10.pdf. 



44 Report No. 135, Standing Committee on Health and Family Welfare, on "Demands For Grants 2022-23 (Demand No. 47) of the Department of Health Research", March 24, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Report File/14/160/135_2022_8_10.pdf.  
45 "Background", Ayushman Bharat Digital Mission (ABDM), National Health Authority, last accessed on December 27, 2022 https://abdm.gov.in/abdm. 46  "ABDM Insight", Ayushman Bharat Digital Mission, National Health Authority, Ministry of Health and Family Welfare, last accessed February 13, 2023, https://dashboard.abdm.gov.in/abdm/. 

## Demand For Grants 2023-24 Analysis Housing And Urban Affairs

Indian cities are expanding both in terms of size and number.  As per the 2011 census, 31% (377 million) of India's population was living in urban areas, and by 
2050 more than 50% of India's population is estimated to be urban.  Urbanisation is the process of growth of cities (either through a natural increase in population, or migration, or physical expansion).  Urban centres offer opportunities and attract people, capital, and technology due to improved access to services, capital, and knowledge pool.  However, the rapid influx of population and dense settlements leads to several issues in cities such as traffic congestion, environmental pollution, and housing shortage. The Ministry of Housing and Urban Affairs formulates policies, coordinates activities of various agencies (at the state and municipal level), and monitors programmes in the area of urban development.  It also provides states and urban local bodies (ULBs) with financial assistance through various centrally supported schemes.  Over the past few decades, several schemes have been introduced to ensure that urbanisation is better planned and services provided in cities are of adequate quality.  However, Indian cities continue to face issues mentioned above along with poor infrastructure. One of the key reasons for poor urban infrastructure is the poor capacity of ULBs and their inability to collect revenue.  The High-Powered Expert Committee for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031 for upgrading urban infrastructure.  Hence, budgetary outlays by the centre and states may not be enough to cater to growing demands of urbanisation.  Further, with the current allocation, the funds are not getting utilised by the Ministry.  This affects the implementation of schemes, and consequently the service levels in cities.  There is a need to empower ULBs both in terms of governance and financial capacity.  This would help them decide what projects to prioritise and how to raise the revenue for them, and help improve city governance. Urban transportation governance is also fragmented at the city level, which leads to issues related to coordination between different agencies and land use planning.  The central government funds metro rail projects in cities.  Several high-level bodies have suggested that before setting up such capital-intensive projects, there may be a need to rethink modes of urban transport based on the spatial pattern of a city. This note looks at the expenditure incurred by the Ministry, the status of the various schemes implemented by it, and the issues faced with investment required for urban planning. 

## 2023-24 Budget Speech Highlights1

- 
An Urban Infrastructure Development Fund will be established for the development of urban infrastructure by public agencies in tier-2 and tier-3 cities.  The Fund will be managed by the National Housing Bank and is expected to have an annual allocation of Rs 10,000 crore.   
- 
Cities will be incentivised to improve their credit worthiness for municipal bonds through property tax reforms and setting aside user charges. 
- 
States and cities will be encouraged to undertake urban planning reforms such as efficient use of land resources, transit-oriented development, and enhanced availability and affordability of urban land.   
- 
All cities and towns will be enabled for 100% 
mechanical desludging of septic tanks and sewers.  
Enhanced focus will be given to scientific 
management of dry and wet waste.   

## Overview Of Finances2

The total expenditure on the Ministry of Housing and Urban Affairs for 2023-24 is estimated at Rs 76,432 crore.  This is an increase of 2.5% over the revised estimates for 2022-23.  In 2023-24, the revenue expenditure of the Ministry is estimated at Rs 50,434 crore (66% of the total expenditure) and the capital expenditure is estimated at Rs 25,997 crore (34% of the total budget).  The capital expenditure is mainly on metro projects (Rs 23,056 crore).   

2023-24 Budgetary Allocation (in Rs crore) 
 
2022-23 
2023-24 
2021-22 
Actuals 
RE 
BE 
% change (RE 
2022-23 to BE 
2023-24) 
Revenue 
80,894 
50,865 
50,434 
-1% 
Capital 
25,946 
23,681 
25,997 
10% 
Total 
1,06,840 
74,546 
76,432 
2.5% 

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS.   

## Expenditure Across Schemes

The Ministry implements several schemes to improve service delivery in urban areas.  These include: (i) Pradhan Mantri Awas Yojana - Urban (PMAY-U), (ii) Atal Mission for Rejuvenation and Urban Transformation (AMRUT), (iii) 100 Smart Cities Mission, (iv) Swachh Bharat Mission - Urban (SBM- U), and (iv) PM Street Vendor's Atmanirbhar Nidhi (PM SVANIDHI).  The Ministry also implements metro projects across states/UTs. 

2021-22 Actuals 
2022- 23 RE 
2023-24 BE 
% change (RE 2022-23 to BE 2023- 24) 
PMAY (Urban) 
59,963 
28,708 
25,103 
-12.6% 
MRTS and Metro 
23,473 
20,401 
23,175 
13.6% 
AMRUT 
7,280 
6,500 
8,000 
23.1% 
Smart Cities 
6,588 
8,800 
8,000 
-9.1% 
SBM (Urban) 
1,952 
2,000 
5,000 
150.0% 
PM-SVANIDHI 
298 
434 
468 
7.8% 
DAY-NULM 
794 
550 
0.01 
-100.0% 
Others 
6,492 
7,153 
6,686 
-6.5% 
Total 
1,06,840 
74,546 
76,432 
2.5% 

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS. The 2023-24 allocation of the Ministry is lower than the amount spent two years earlier by Rs 30,408 crore; the reduction is mainly due to a cut in PMAY-U by Rs 34,860 crore.  The 2021-22 spending on PMAY-U is significantly higher than the earlier years (and 7.5 times the budget estimate for that year).  See Page 128 for a detailed discussion on PMAY-U.  Deendayal Antyodaya Yojana-National Urban Livelihood Mission (DAY-NULM) has been allocated a token amount of Rs 10 lakh, compared to Rs 550 crore in 2022-23 revised estimate; this was also 39% lower than the originally budgeted amount of Rs 900 crore in 2022-23.   

## Trends In Expenditure

During 2013-14 to 2023-24, the Ministry's expenditure has increased at an annual average rate of 22% (See Figure 2).  While allocation to the Ministry has been increasing, the Ministry has not been able to utilise all the funds allocated (See Figure 3).  The Standing Committee on Urban Development (2021) also highlighted this issue and recommended the Ministry to avoid such underutilisation of funds.3  Consistent underutilisation may affect progress of key schemes, as well as future allocation of funds.    
Note: For the years 2012-13 till 2015-16, the figures are a combination of the erstwhile Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development.  Values for 2022-23 and 2023-24 are Revised and Budget Estimates respectively. All other figures are Actuals. Sources: Demand for Grants of Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development from 2011-12 to 2015-16; Demand for Grants of Ministry of Housing and Urban Affairs from 2013-14 to 2023-24; PRS. 

In 2016-17, the actual expenditure on metro projects, AMRUT, and Smart Cities Mission were higher than the budget estimates.  Further, in 2021-22 the actual expenditure on PMAY-U was 650% higher than the estimates (Budget Estimates- Rs 8,000 crore and Actuals- Rs 59,963 crore).     
 

## Issues To Consider Financing Required

Urban infrastructure projects tend to be capital intensive and not only require upfront capital investment but also annually recurring operations and maintenance expenditures.  With the current rate of urbanisation, the High-Powered Expert Committee (HPEC) for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031.4  As per their framework, the investment in urban infrastructure should increase from 0.7% of GDP in 2011-12 to 1.1% of GDP by 2031-32. In 2021-22, total expenditure on urban development by states and centre is estimated to be 0.7% of GDP.5,6 The Ministry of Finance (2017) had noted that only budgetary outlays will not be enough to cater the growing demands on local governments for improving their infrastructure.7  Allocation by the central government will have to be supported with other sources of financing to meet the funding gap. There have been attempts to explore alternative measures for meeting expenditure requirements. Schemes such as Smart Cities Mission, AMRUT seek to meet their financing requirements through a mix of sources such as municipal bonds and public private partnership.  The Ministry of Housing and Urban Affairs also provides financial incentives to ULBs for issuance of municipal bonds.8  The Standing Committee on Housing and Urban Affairs (2022) noted that some municipal corporations like Lucknow and Ghaziabad have undergone credit rating evaluation and have successfully raised funds from the market.9   

## Several Cities Not Credit Worthy

One of the reforms under AMRUT is to have credit ratings for cities.  Credit rating is a pre-requisite for ULBs to raise money from the market and financial institutions.10  The Ministry (2018) noted that the municipal bond market has great potential to fulfil the financial requirements of cities.10  However, it remains untapped.  As of December 2022, credit rating work has been completed in 470 cities and 164 cities (35%) have received investible credit rating (enables ULBs to float municipal bonds).11 

## High Reliance On Government Transfers

ULBs in India are amongst the weakest globally in terms of fiscal autonomy with state government control on their authority to levy taxes.12  The 74th Constitutional Amendment allows state governments to authorise ULBs to levy, collect and appropriate certain taxes, duties, tolls and fees.  Such funds collected by the state government must be assigned to ULBs.  States are also required to constitute State Finance Commissions (SFCs) to recommend devolution of tax revenues and grants-in-aids to ULBs.13  However, RBI (2022) noted that transfer of revenue collecting powers from states to ULBs has been limited.12  Sources of revenue for ULBs include user fees, property sales, and licenses and permits.  The share of own revenue (tax and non-tax) in total revenue of ULBs has declined over time indicating fiscal dependency on government transfers.12  With GST subsuming certain taxes earlier levied by ULBs (such as octroi tax, local body tax), there is greater dependence on transfers.  Property tax remains the only major tax source for ULBs.  Among the BRICS nations, local governments in Brazil and Russia mostly rely on government grants while those in China and South Africa are less dependent on transfers for their finances.12  

## Sfcs And Ulbs

Article 243I of the Constitution requires the state governments to 
appoint SFC from 1994 after every five years.14  The 15th 
Finance Commission observed that most state governments did 
not constitute SFCs in time and have not given due importance 
to the recommendations of the SFCs.15  In states where SFCs 
have recommended devolution to ULBs, there have been 
variations among states.16  For instance, 4th SFC of Karnataka 
recommended 10.7 of the divisible pool for ULBs while the 5th 
SFC of Kerala recommended 5.5% and 1% by the 4th SFC of 
West Bengal.    

Total own revenue 
Year 
Total Municipal Expenditure  
Share of own revenue in total expenditure 
2010-11 
64,193 
37,304 
58% 
2011-12 
70,380 
42,633 
61% 
2012-13 
82,702 
52,543 
64% 
2013-14 
93,298 
58,249 
62% 
2014-15 
1,06,917 
63,418 
59% 
2015-16 
1,18,938 
70,223 
59% 
2016-17 
1,24,007 
72,067 
58% 
2017-18 
1,32,553 
73,331 
55% 

Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

## 

Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

## Low Property Tax Collection

Property tax for local governments is one of the most important sources for raising revenue globally (See Figure 7).12  In India it was around 60% of the municipal tax revenue in 2017-18.16  Compared to other countries, property tax collection in India is much lower due to several reasons such as property undervaluation and ineffective administration.  Smaller municipal corporations, lack institutional capacity to undertake reforms to increase property tax collection and may require state government's assistance.12  For larger corporations, expansion of tax base and increasing efficiency of tax collection can be done through use of technologies such as satellite photography.12 The 15th Finance Commission (2021-26) has recommended grants worth Rs 1.21 lakh crore over five years for urban local bodies.15  To receive grants from the year 2022-23 onwards, states will need to show consistent improvement in property tax collection.  To meet the eligibility criteria, the property tax in the previous year should grow in tandem with the average growth rate of the state's own GSDP in the most recent five years.     
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

Sources: World Bank; PRS. 

## Absence Of Financial Transparency In Ulbs

RBI (2022) observed that the balance sheets of most municipalities in India are not publicly available and many of them continue to follow cash accounting system.12  Municipal laws do not prescribe any uniform accounting standards to be followed, resulting municipal accounts incomparable across states and within states.12  In order to ensure correct, complete, and accurate record keeping of municipal transactions and to produce financial reports, a Task Force for ULBs was constituted by Comptroller and Auditor General of India (CAG) in February 2022, based on recommendations of the 11th Finance Commission.12 The Task Force recommended an accounting system which led to the National Municipal Accounts Manual (NMAM) in December 2004.  RBI noted that only in 9 of the 14 states (for which information pertaining to adoption of State municipal accounts manual is available in the CAG reports), a municipal accounts manual has been approved by the respective state government.12  Thus, there is a need to implement a uniform accounting framework across states.12   

## Capacity For Municipal Governance

ULBs play a key role in city governance by providing essential services like housing, water, sanitation, electricity, and transportation.  The HPEC for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had noted that the state of service delivery in Indian cities and towns is inadequate compared to desirable levels.  The Standing Committee on Urban Development (2021) highlighted that while ULBs have done reasonably well in implementing targeted schemes like SBM-U, they have not been able to implement schemes like Smart Cities Mission where most planning decisions are left to them.3  The Committee highlighted that ULBs are not ready to take up such projects like Smart Cities Mission.       

## Ulbs Not Empowered

While the Ministry has introduced several schemes for improving service delivery such as Smart Cities Mission, and PMAY-U, the quality of such services still remains inadequate.  One of the key reasons behind such state of affairs may be lack of capacity of ULBs. The 74th Constitutional Amendment allowed state 
 
governments to devolve certain functions relating to urban development (such as urban sanitation, water supply, and roads and bridges) to ULBs.17  HPEC (2011) noted that the Amendment left it to the discretion of the state legislature to devolve these functions to ULBs.4  It had observed that states have only partially complied with devolution.   
For instance, the CAG (2020 and 2021) noted that Karnataka and Rajasthan had transferred 17 and 16 functions out of 18 functions (specified in the 12th Schedule) respectively.18,19  In Karnataka, of the functions devolved, ULBs had no role in urban planning and slum improvement which are functions to be devolved to them.  For functions like water supply, public health, and urban amenities, ULBs had either a minimal role or overlapping jurisdictions with other agencies.  In Rajasthan, ULBs had a minimal role or overlapping jurisdictions for water supply, urban planning, roads and bridges, and public health sanitation.  The CAG recommended respective state governments to ensure that ULBs have adequate degree of autonomy with respect to functions assigned to it. 

## Housing Pmay-U

The central government had launched PMAY-U in June 
2015 to provide 'housing for all' within urban areas.  
The scheme was earlier applicable till March 31, 2022. In August 2022, the scheme was extended up to December 31, 2024, due to some states submitting proposals for constructing houses in the last two years of the scheme.  In 2023-24, PMAY-U has been allocated Rs 25,103 crore (highest allocation of the Ministry) which is a decrease of 12.6% from 2022-23 revised estimates.  In 2021-22, the actual allocation towards PMAY-U was Rs 59,963 crore, which is an increase of 650% from 2021-22 budget estimates (Rs 8,000 crore).  This is on account of a sharp increase of 
4,447% of expenditure (Rs 33,329 crore) on 'other items of central component' which includes establishment expenses, capacity building, and other expenses for PMAY-U. The scheme comprises four components: (i) in-situ rehabilitation of existing slum dwellers (using the existing land under slums to provide houses to slum dwellers) through private participation, (ii) credit linked subsidy scheme (CLSS) for Economically Weaker Sections (EWS), Lower Income Groups (LIG), and middle-income group (MIG), (iii) affordable housing in partnership (AHP), and (iv) subsidy for beneficiary-led individual house construction.  
Several houses grounded but not completed: The Standing Committee on Housing and Urban Affairs (2022), while analysing the progress of PMAY-U, observed that no strict timelines have been provided for the completion of houses.9  In some states, even the land required for construction has not been acquired. The number of houses grounded for construction (construction going on) are more than the completed houses.  For instance, in Andhra Pradesh, as on January 
23, 2023, out of 21 lakh sanctioned houses, 19 lakh houses were grounded (93%), and about 7 lakh houses were completed/ delivered (32%).20  In Maharashtra. out of 15 lakh sanctioned houses, 10 lakh (69%) were grounded and 7 lakh (49%) were completed/ delivered.  
It recommended the Ministry to provide strict timelines for completion of under construction houses.  
Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS.  
Poor quality of houses: As per PMAY-U guidelines, all houses constructed under slum rehabilitation and AHP components, should have basic civic infrastructure like water, sanitation, sewerage, and electricity.21  ULBs should ensure that individual houses under CLSS and beneficiary-led verticals have access to basic services.  The Standing Committee on Housing and Urban Affairs (2022) highlighted that several houses constructed under PMAY-U are not in liveable condition with windows and doors missing.9 As a response to houses not being liveable, Ministry stated that about 96,000 houses under the erstwhile Jawaharlal Nehru National Urban Renewal Mission (JnNURM) are lying vacant due to which they are in a bad shape.31  The Ministry has requested respective states/UTs to repair these houses and allot them to beneficiaries or convert them into Affordable Rental Housing Complexes (ARHCs) for rental purposes for urban migrants/poor.  The CAG (2022) while auditing houses constructed under PMAY(U) in Karnataka observed that some houses constructed under AHP vertical were unoccupied due to lack of facilities such as water, sewerage, and electricity.22  This was due to non-release of funds by the concerned ULBs.  

## Implementation Issues In Allocating Houses

PMAY-U guidelines prescribe certain standards to identify 
eligible beneficiaries such as a beneficiary family should 
comprise husband, wife and unmarried sons and/ or unmarried 
daughters.23  Further, the family should not own a pucca house.  
There have been some irregularities in identification of 
beneficiaries.  For instance, in Madhya Pradesh 16 beneficiaries 
who were provided the benefit of PMAY-U were not approved by 
the District Collector.24  The beneficiaries later returned the grant 
amount given to them to the concerned ULB.  Further, the CAG 
(2022) noted several issues related to allocation of beneficiaries 
under PMAY-U in Karnataka which include (i) beneficiaries 
getting multiple benefits under same/ different verticals, and (ii) 
benefits extended to ineligible people.25   

## Urban Transportation Fragmented Approach To Urban Transport

The Ministry of Housing and Urban Affairs is the nodal ministry for looking after urban transport at the central level.  As urban development being a state subject, the primary responsibility for urban transport infrastructure and service delivery lies with state governments and local bodies. The National Transport Development Policy Committee (NTDPC), 2013 observed that India's transport policy is fragmented between different level of government.26  Such an arrangement adversely affects intermodal planning and execution at all levels of government and has led to several inefficiencies. These include: (i) rail networks not linking with road networks for last-mile delivery of goods, (ii) bus and metro systems in urban areas not exchanging people, and (iii) ports not always having infrastructure for evacuation of goods.  At the city level, several agencies are involved in managing components of urban transportation.27  For instance, Mumbai's transportation system is overseen by a combination of municipal/metropolitan authorities, state and central government agencies.  For instance, the road system is managed by multiple agencies including the Mumbai Metropolitan Development Authority and Maharashtra State Road Development Corporation.  The lack of an integrated approach to urban transport also affects prospects for coordinated land use planning. The National Urban Transport Policy, 2006, noted that the current system governing transport does not provide for coordination among agencies.28  It recommended setting up Unified Metropolitan Transport Authority (UMTA) in all million-plus cities to facilitate coordinated planning and implementation of urban transport programs and projects, and integrated management of urban transport systems.  The Metro Rail Policy, 2017 provides that state governments should constitute UMTAs as statutory bodies.29  The Standing Committee on Housing and Urban Affairs (2022) had noted that only a few cities such as Bengaluru, Kochi, Pune, and Chennai have set up their respective UMTAs.30   

## Urban Transport Focused On Metro Projects

Investment in metro projects in cities forms one of the biggest expenditures made by the Ministry on urban transport.  Some of the major metro projects include Chennai, Delhi, Bangalore, and Mumbai metros. Investments in these projects are made in various forms including grants, equity investments, debt, and passthrough assistance (grants given to the government which can be awarded to other organisations) for externally aided projects.  In 2023-24, metro projects have been allocated Rs 23,175 crore, an increase of 13.6% over the revised estimates of 2022-23.     
Need to enhance revenue from non- fare sources: 
Sources of revenue for metro projects are of two typesfare box (sale of tickets) and non-fare box (such as commercial development of land, advertising revenues).  The Metro Rail Policy, 2017 provides that the Detailed Project Report for metro projects must provide for enhancing non-fare box revenue.29  The respective state government should provide a policy framework and required permissions, and licenses for enabling metro projects to explore various types of nonfare box revenue.29 A major portion of the total revenue generated by Indian metro rail systems consists of fare revenue.  For instance, the proportion of total revenue generated from fare box by Delhi Metro ranged from 24% in 2005-16 to 57% in 2019-20.  For Kochi Metro it was 78% in 2017-18 and 60% in 2019-20.30  Mumbai Metro Line 1 generated 86-89% of its revenue from fare box since 2014-15 from fares (barring COVID-19 year).30 According to the Standing Committee on Housing and Urban Affairs (2022), maximising revenue from fare collection may negatively impact ridership and it may prevent metro from becoming a mass transportation system.30  It recommended the Ministry to persuade metro projects to explore avenues of non-fare box collection.  Property development and setting up commercial establishments at stations has been a key source of revenue for metro projects.30  Notable examples of using property development and commercial establishments for generating revenue are Hong Kong and Tokyo.29 In the case of Delhi Metro, the Committee (2022) noted that it is incurring net losses despite meeting targets for average daily earnings required for breakeven and increase in average daily ridership (See Figure 9).30  It recommended the Delhi Metro to enhance non-fare revenue.  The Ministry informed the Committee (2022) that it has requested metro rail corporations to increase revenue from non-fare sources.31  It also informed the Committee that Delhi Metro has taken and is planning several measures which include: (i) co-branding of metro stations, (ii) licensing of spaces at stations for shops, ATMs, kiosks, offices, and (iii) exploring digital advertisement panels inside tunnels.31      
 
Sources: Report No. 12: Implementation of Metro Rail Projects - An Highly capital-intensive nature of Metro: Metro projects are highly capital intensive in nature.  Capital expenditure on metro projects in 2023-24 is estimated to be Rs 23,056 crore which is 89% of the total capital expenditure by the Ministry (Rs 25,997 crore).  The per km cost of constructing metro ranges from Rs 37 crore to Rs 1,126 crore depending on the metro system.30 While observing the losses made by Delhi Metro, the Standing Committee on Housing and Urban Affairs (2022) noted that metro projects should not be assessed only on economic considerations given the benefits it has such as reducing pollution and traffic, and providing affordable transport solutions.30 The Metro Policy 2017, notes that before setting up metro, an unbiased analysis of different alternatives should be carried out.29  Cities with a well spread-out spatial pattern may not have sufficient number of corridors with adequate density to justify investments in metro.  Cities with a linear spatial pattern are more suited for metro projects.  Indian cities have developed in a way that allow neighbourhoods to provide for residences, workplaces, and social and educational facilities.27  This results in minimising trip lengths leading to less dependency on motorised urban transport.27  The average trip length in medium and small Indian cities is less than 5 km making nonmotorised transport the preferred mode of commute. Metro rail systems are efficient when the average trip distance is greater than 12 km.27  The Standing Committee on Housing and Urban Affairs (2022) recommended the Ministry to promote MetroLite and MetroNeo systems in smaller cities due to their lesser capital, operation, and maintenance costs.30  These systems can be constructed at about 25-40% cost of regular metro.  Further, it recommended the Ministry to approve and fund only those projects that are using the most feasible metro technology (such as MetroLite and MetroNeo) for a city taking into account its population and traffic needs.30 NTDPC recommended that metro rail projects should initially be limited to cities with population more than five million.  These cities should be able to cover all costs through user charges or fiscal costs.  Further it recommended that Indian cities should focus on improving their existing bus systems, adding bus rapid transit systems, and improving non-motorised transport. However, over the past few years, metro projects have expanded from the larger metropolises such as Delhi and Mumbai to other relatively smaller cities such as Kochi, Lucknow, Bhopal, Jaipur, and Indore.   

## Basic Services Atal Mission For Rejuvenation And Urban Transformation (Amrut)

AMRUT, launched in June 2015 in select 500 cities, seeks to focus on developing basic infrastructure related to several services such as water supply, sewerage, and non-motorised urban transport.32  AMRUT 2.0 was launched in October 2021 for five years (2021-22 to 2025-26).  AMRUT 2.0 seeks to provide water supply to households.  In 2023-24, AMRUT has been allocated Rs 8,000 crore, an increase of 23% over 2022-23 revised estimates.  
Irregularities in implementation: The Standing Committee on Urban Development (2019, 2020) has highlighted several irregularities with the scheme.  For instance, tenders for projects being continuously awarded to a single person, unnecessary projects being taken up, and tenders being awarded at high cost when cheaper options were available.3,33  In 2020, the Committee noted that implementation of projects has been below target.  As of December 2022, 134 lakh (96%) water tap connections and 102 lakh (70%) sewer connections have been provided against the target of 139 lakh and 145 lakh respectively.32  

Table 4: Allocation to AMRUT (in Rs crore) 
Year 
Budget 
Actuals 
Utilised 
2015-16 
3,919 
2,702 
69% 
2016-17 
4,080 
4,864 
119% 
2017-18 
5,000 
4,936 
99% 
2018-19 
6,000 
6,183 
103% 
2019-20 
7,300 
6,391 
88% 
2020-21 
7,300 
6,448 
88% 
2021-22 
7,300 
7,280 
100% 
2022-23 
7,300 
6,500 
89% 
2023-24 
8,000 
- 
- 
Total 
56,199 
45,304 
81% 

Note: Actuals for 2022-23 are Revised Estimates.   
Sources: Demand for Grants, Ministry of Housing and Urban Affairs (2015-16 to 2023-24); PRS. 

Table 5: Progress under AMRUT (as of December 2022) 
 
Total 
Completed 
% 
Ongoing 
% 
Projects 
5,873 
4,676 
80 
1,197 
20 
82,222 
32,793 
40 
49,430 
60 
Cost (Rs crore) 

Sources: Unstarred Question No. 1424, Lok Sabha, Ministry of Housing and Urban Affairs, December 15, 2022; PRS. 

## Smart Cities Mission

The Smart Cities Mission, launched in June 2015 for five years, seeks to promote 100 smart cities that provide core infrastructure (such as water and electricity supply, sanitation, and public transport).  The scheme has been extended to June 2023.34  In 2023-24, the Mission has been allocated Rs 8,000 crore, a decrease of 9% over 2022-23 revised estimates (Rs 8,800 crore).  The Standing Committee on Urban Development (2021) noted that the amount allocated to the Smart Cities Mission has been less than the proposed amount (See Table 6). 

amount for Smart Cities Mission (in Rs crore) 
| Year    | Proposed    | Budgeted     |
|---------|-------------|--------------|
| 2017-18 | 13,648      | 4,000        |
| 2018-19 | 9,810       | 6,169        |
| 2019-20 | 13,971      | 6,450        |
| 2020-21 | 13,543      | 6,450        |
| 2021-22 | 10,000      | 6,450        |

Sources: Report No.5: Ministry of Housing and Urban Affairs, Demand for Grants 2021-22, Standing Committee on Urban Development, March 8, 2021; PRS.  
Capacity of ULBs to implement the Mission: Each smart city has a Special Purpose Vehicle (SPV), responsible for the implementation of the Mission at the city level.  ULBs are responsible for planning and implementing the projects and also providing funds (alongside the central government).  The Standing Committee on Urban Development (2021) observed that economically backward states have not been able to provide their share of financial contribution under the Mission.3  The Committee also highlighted that ULBs have not been able to implement schemes like Smart Cities Mission where everything is left to them (such as making plan, choosing projects).  It remarked that ULBs may not be ready to take up such Missions. This may be due to the limited technical and financial capacity of ULBs, as discussed on Page 126 and 127.       
Deficiencies in implementation: Under the Mission, multiple projects related to infrastructure and service delivery such as sanitation, water supply, are taken up in the select cities.  Seven years since the launch of the Mission, 33% of projects are still ongoing (See Table 7).  The Standing Committee on Urban Development (2021) also highlighted the slow pace of project completion.  It recommended the Ministry to ensure timely completion to avoid cost overruns.  The Committee also highlighted several irregularities in implementation of Smart Cities works which include: (i) frequent dropping of projects after finalising proposals, (ii) redoing of the same work again, and (iii) project costs being higher than market rate.  Further, the Committee observed that the Geospatial Management Information System (real time monitoring system) has not been able to adequately monitor projects.   

several projects still ongoing 
| Total    | Completed    |   %  | Ongoing    |   %  |          |
|----------|--------------|------|------------|------|----------|
| Projects |              |      |            |      |          |
| 7,804    | 5,322        |  68  | 2,558      |  33  |          |
| 1,81,322 | 1,00,273     |  55  | 82,526     |  46  | Cost (Rs |
| crore)   |              |      |            |      |          |

Sources: Smart Cities Mission Dashboard (as on January 30, 2023), as accessed on February 4, 2023; PRS.   

## Swachh Bharat Mission - Urban (Sbm-U)

SBM-U has been allocated Rs 5,000 crore in 2023-24, an increase of 150% over 2022-23 revised estimates. Launched in October 2014, SBM-U seeks to: (i) make all urban areas open defecation free (ODF), and (ii) achieve 100% scientific management of municipal solid waste (MSW).  SBM-U 2.0 was launched in October 
2021.  It focuses on source segregation of solid waste at source, scientific processing of waste, and improving dumpsites for solid waste management.   
Progress may not be adequate: In 2019, all urban areas were declared open defecation free (ODF).35 
However, according to the National Family Health Survey 5 (2019-21), 19.5% of urban households do not have access to an improved sanitation facility (includes flush to piped sewer system, flush to septic tank, twin pit/composting toilet, which is not shared with any other household).36  Under the Mission, individual household and community toilets are constructed across states.  However, the construction varies across states. In some states like Maharashtra and Gujarat, targets have been overshot, and some such as West Bengal and Meghalaya where the targets have not been met.  For instance, as on January 25, 2023, in West Bengal 55% of individual household latrines have been constructed and 22% public toilets have been constructed (See Table 8 in the Annexure for state wise details on number of toilets constructed). 

   
Sources: SBM (U) Dashboard, Ministry of Housing and Urban Affairs, as accessed on January 25, 2023; PRS.   
Underutilisation of funds for inducing behavioural change: Apart from constructing toilets, SBM-U also focuses on behavioural change to eradicate open defecation, and spreading awareness around hygiene practices, proper use and maintenance of toilets etc.37 Accordingly funds are allocated for advertisement and publicity of the mission.  However, the Standing Committee on Housing and Urban Affairs (2022) highlighted that there has been underutilisation of funds for advertising and publicity (See Figure 12).38 Advertising and publicity are key factors for inducing behavioural change.  In 2020-21 and 2021-22, almost none of the funds allocated were utilised.  The Standing Committee on Housing and Urban Affairs (2022) noted that declaring cities as ODF is not enough and the Ministry must persist in spreading awareness about the Mission.9  The Ministry highlighted that such underutilisation of funds is due to the Ministry not receiving demand proposals from states for advertising and publicity. 

Note: Data for 2021-22 is as on December 31, 2021. Sources: Report No. 12: Ministry of Housing and Urban Affairs Demand for Grants (2022-23), Standing Committee on Housing and Urban Affairs, March 24, 2022; PRS. 1 Budget 2023-24, Speech of Nirmala Sitharaman Minister of Finance, February 1, 2023, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 2 Note on Demands for Grants 2023-24, Demand No. 60, Ministry of Housing and Urban Affairs, https://www.indiabudget.gov.in/doc/eb/sbe60.pdf. 3 Report No. 5: Ministry of Housing and Urban Affairs, Demand for Grants 2021-22, Standing Committee on Urban Development, March 8, 2021, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban %20Affairs/17_Urban_Development_5.pdf. 4 "Report on Indian Infrastructure and Services", High Powered Expert Committee for estimating the investment requirement for urban infrastructure services, March 2011, https://icrier.org/pdf/FinalReport-hpec.pdf. 5 Annual Financial Statement of the central government, 2022- 23, Government of India, https://www.indiabudget.gov.in/doc/AFS/allafs.pdf. 6 State Finances: A Study of Budgets 2021-22, Reserve Bank of India, November 30, 2021, https://rbi.org.in/Scripts/AnnualPublications.aspx?head=State%20Fin ances%20:%20A%20Study%20of%20Budgets. 7 "Guidance on use of Municipal Bond Financing for Infrastructure projects", Department of Economic Affairs, Ministry of Finance, September 2017, https://www.pppinindia.gov.in/documents/20181/33749/Guidance+on +use+of+Municipal+Bonds+for+PPP+projects.pdf/037cb143-8305-
4c57-8f3c-32e5a329297f. 8 Unstarred Question No. 559, Lok Sabha, Ministry of Housing and Urban Affairs, July 22, 2021, https://pqals.nic.in/annex/176/AU559.pdf. 9 Report No. 12: Ministry of Housing and Urban Affairs, Demand for Grants 2022-23, Standing Committee on Housing and Urban Affairs, March 24, 2022, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban %20Affairs/17_Housing_and_Urban_Affairs_12.pdf. 10 "Subject- Incentive to Urban Local Bodies (ULBs), which are covered under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for issuance of Municipal Bonds", Letter to Principal Secretaries of states/UTs, Ministry of Housing and Urban Affairs, March 23, 2018, http://amrut.gov.in/upload/oms/5ad83b6e6e622bondletter2018.pdf. 11 Unstarred Question No. 1336, Rajya Sabha, Ministry of Housing and Urban Affairs, December 19, 2022, https://pqars.nic.in/annex/258/AU1336.pdf. 12 Report on Municipal Finances, Reserve Bank of India, 2022, https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RMF101120223A3 4C4F7023A4A9E99CB7F7FEF6881D0.PDF. 13 Article 243Y, The Constitution of India, https://legislative.gov.in/sites/default/files/COI.pdf.   
https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/Rep orts/XVFC%20VOL%20I%20Main%20Report.pdf. 16 State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission, March 2019, https://fincomindia.nic.in/ShowContentOne.aspx?id=27&Section=1. 17 Article 243W, The Constitution of India, https://legislative.gov.in/sites/default/files/COI.pdf. 18 "Performance audit of Implementation of 74th Constitutional Amendment Act", Government of Karnataka Report No. 2 of the year 
2020, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2020/Full%20repor t%20%20English-05f757c1f8c7e46.52858465.pdf. 19 "Performance Audit on Efficacy of implementation of 74th Constitutional Amendment Act," Government of Rajasthan Report No. 5 of the year 2021, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2021/Full%20Repo rt-English-74th%20CAA-0622b24e8505c47.07308141.pdf. 20 Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023. 21 Starred Question No. 58, Rajya Sabha, Ministry of Housing and Urban Affairs, December 12, 2022, https://pqars.nic.in/annex/258/AS58.pdf. 22 Report of the Comptroller and Auditor General of India, Performance Audit of Implementation of Housing Schemes for Urban Poor in Karnataka, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2021/HFA%20EN GLISH-06334255952f936.86422917.pdf.  
23 Pradhan Mantri Awas Yojana (Urban), Scheme Guidelines, January 2021, Ministry of Housing and Urban Affairs, https://pmayurban.gov.in/uploads/guidelines/62381c744c188-Updated-guidelinesof-PMAY-U.pdf. 24 Unstarred Question No. 1359, Rajya Sabha, Ministry of Housing and Urban Affairs, March 14, 2022, https://pqars.nic.in/annex/256/AU1359.pdf. 25 Performance Audit of Implementation of Housing Schemes for Urban Poor in Karnataka, Government of Karnataka, Report No. 4 of 2022, https://cag.gov.in/uploads/download_audit_report/2021/HFA%20EN GLISH-06334255952f936.86422917.pdf. 26 NTDPC's Approach to Transport Policy, National Transport Development Policy Committee, 2013, http://www.aitd.net.in/NTDPC/volume2_p1/approach_v2_p1.pdf. 27 Chapter 5- Urban Transport, National Transport Development Policy Committee, 2013, http://www.aitd.net.in/NTDPC/voulme3_p2/urban_v3_p2.pdf. 28 National Urban Transport Policy, 2006, https://mohua.gov.in/upload/uploadfiles/files/TransportPolicy.pdf. 29 Metro Rail Policy, 2017, https://mohua.gov.in/upload/whatsnew/59a3f7f130eecMetro_Rail_Po

## 

https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban %20Affairs/17_Housing_and_Urban_Affairs_13.pdf.  
33 Report No. 5: Demands For Grants (2020-2021), Ministry of Housing and Urban Affairs, Standing Committee on Urban Development, March 3, 2020, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban %20Affairs/17_Urban_Development_2.pdf. 34 "3,131 Smart City projects worth ₹ 53,175 crore have been completed", Press Information Bureau, Ministry of Housing and Urban Affairs, November 29, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1776077.  
 
 
35 "Cabinet approves the continuation of Swachh Bharat Mission (Urban) (SBM U) till 2025-26 for sustainable outcomes" Press Information Bureau, Union Cabinet, October 12, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1763354. 36 National Family Health Survey - 5 2019-21, India Fact Sheet, Ministry of Health and Family Welfare, http://rchiips.org/nfhs/NFHS- 5_FCTS/India.pdf.  
37 Guidelines for Guidelines for Swachh Bharat Mission, Revised as on 5th October 2017, Ministry of Housing and Urban Affairs, http://swachhbharaturban.gov.in/writereaddata/SBM_Guideline.pdf. 38 Report No. 15: Action Taken by the Government on the Recommendations contained in the Twelfth Report (Seventeenth Lok Sabha) of the Standing Committee on Housing and Urban Affairs on the 'Demands for Grants (2022-23) of the Ministry of Housing and Urban Affairs', Standing Committee on Housing and Urban Affairs, Standing Committee on Housing and Urban Affairs, August 8, 2022, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban %20Affairs/17_Housing_and_Urban_Affairs_15.pdf.   

## Annexure: Housing And Urban Affairs

% Change 
between 
Major Heads 
2021-22 Actuals 
2022-23 BE 
2022-23 RE 
2023-24 BE 
2022-23 RE 
and 2023-24 
BE 
National Health Mission 
  27,448  
  28,860  
  28,974  
  29,085  
0% 
8,459 
10,022 
10,348 
17,323 
67% 
Autonomous Bodies under Department of Health and Family Welfare (eg. AIIMS, PGIMER, and JIPMER) Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PMJAY) 
 3,116  
 6,412  
 6,412  
 7,200  
12% 
Establishment expenditure of new AIIMS 
- 
- 
- 
6,835 
- 
Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM) 
  761  
 5,156  
 2,167  
 4,846  
124% 
Medical Treatment of CGHS Pensioners (PORB) 
2,741 
2,645 
4,640 
3,846 
-17% 
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) 
 9,270  
  10,000  
 8,270  
 3,365  
-59% 
National AIDS and STD Control Programme 
 2,126  
 3,027  
 2,182  
 3,080  
41% 
ICMR 
 1,841  
 2,198  
 2,117  
 2,360  
11% 
Statutory and Regulatory bodies 
  308  
  335  
  636  
  639  
1% 
Family Welfare Schemes 
  300  
  484  
  474  
  517  
9% 
COVID-19 
  16,445  
 226  
 228  
 497  
118% 
Infrastructure Development for Health Research 
148.2 
177 
152 
150 
-1% 
Others 
11,508 
16,658 
12,546 
16,248 
30% 
Total 
  84,470  
  86,201  
  79,145  
  89,155  
13% 

Sources: Demand Numbers 46 and 47, Demand for Grants, Ministry of Health and Family Welfare, Union Budget, 2023-24; PRS.

|                   |                   |                       |
|-------------------|-------------------|-----------------------|
| State/UT          | Target            | Constructed           |
|                   |                   |                       |
| Individual        | Community and     | Individual            |
| Household         |                   |                       |
| Community         |                   |                       |
| and Public        |                   |                       |
| Individual        |                   |                       |
| Household         |                   |                       |
| Community         |                   |                       |
| and Public        | household latrine | public toilets target |
| Latrine           | Toilets           | Latrine               |
| 336               | 126               | 336                   |
| Nicobar Islands   |                   |                       |
| Andhra Pradesh    | 1,93,426          | 21,464                |
| Arunachal Pradesh | 12,252            | 387                   |
| Assam             | 75,720            | 3,554                 |
| Bihar             | 3,83,079          | 26,439                |
| Chandigarh        | 4,282             | 976                   |
| Chhattisgarh      | 3,00,000          | 17,796                |
| Delhi             | 5,000             | 11,138                |
| Goa               | 8,020             | 507                   |
| Gujarat           | 4,06,388          | 31,010                |
| Haryana           | 71,000            | 10,393                |
| Himachal Pradesh  | 11,266            | 876                   |
| 59,600            | 3,585             | 51,246                |
| Kashmir           |                   |                       |
| Jharkhand         | 1,61,713          | 12,366                |
| Karnataka         | 3,50,000          | 34,839                |
| Kerala            | 29,578            | 4,801                 |
| Ladakh            | 400               | 194                   |
| Madhya Pradesh    | 5,12,380          | 40,230                |
| Maharashtra       | 6,29,819          | 59,706                |
| Manipur           | 43,644            | 620                   |
| Meghalaya         | 5,066             | 362                   |
| Mizoram           | 16,441            | 491                   |
| Nagaland          | 23,427            | 478                   |
| Odisha            | 1,32,509          | 17,800                |
| Puducherry        | 5,681             | 1,204                 |
| Punjab            | 1,02,000          | 10,924                |
| Rajasthan         | 3,61,753          | 26,364                |
| Sikkim            | 1,587             | 142                   |
| Tamil Nadu        | 4,37,543          | 59,921                |
| Telangana         | 1,63,508          | 15,543                |
| Tripura           | 19,464            | 586                   |
| Uttar Pradesh     | 8,28,237          | 63,451                |
| Uttarakhand       | 27,640            | 2,611                 |
| West Bengal       | 5,15,000          | 26,484                |
| Total             | 58,97,759         | 5,07,368              |

Sources: Swachh Bharat Mission (Urban) Dashboard, as accessed on January 25, 2023; PRS. 

 

Table 9: Progress of PMAY-U as on January 23, 2023 
State/ UT 
Physical Progress of Houses 
Financial Progress (in Rs crore) 
 
Sanctioned 
Grounded*(under 
Completed/ Delivered* 
Investment 
Central Assistance 
construction) 


Sanctioned 
Released 
378 
378 
47 
96 
6 
2 
Andaman and Nicobar Island Andhra Pradesh 
20,74,765 
19,25,908 
6,67,334 
89,212 
31,622 
17,803 
Arunachal Pradesh 
9,002 
8,570 
5,610 
511 
190 
146 
Assam 
1,61,476 
1,50,799 
71,466 
4,931 
2,446 
1,314 
Bihar 
3,27,315 
3,09,603 
1,01,567 
18,540 
5,153 
2,571 
Chandigarh 
1,271 
1,202 
1,202 
262 
29 
28 
Chhattisgarh 
3,06,034 
2,61,890 
1,60,957 
13,833 
4,850 
3,513 
Delhi 
30,194 
28,709 
28,683 
5,645 
697 
660 
10,480 
9,852 
8,368 
941 
222 
192 
Dadra and Nagar Haveli and Daman and Diu Goa 
3,150 
2,995 
2,987 
692 
75 
71 
Gujarat 
10,60,376 
9,40,724 
7,92,574 
1,05,706 
21,913 
17,126 
Haryana 
1,66,671 
91,982 
58,697 
15,750 
2,954 
1,426 
Himachal Pradesh 
13,249 
12,880 
8,863 
910 
241 
179 
Jammu and Kashmir 
49,146 
47,376 
16,673 
2,695 
756 
369 
Jharkhand 
2,34,369 
2,08,787 
1,17,559 
11,646 
3,687 
2,535 
Karnataka 
7,06,320 
5,72,101 
2,94,209 
51,984 
11,588 
6,257 
Kerala 
1,66,661 
1,34,089 
1,06,998 
8,928 
2,760 
1,936 
Ladakh 
1,366 
1,015 
647 
68 
31 
22 
Madhya Pradesh 
9,60,256 
9,05,806 
5,93,867 
54,059 
15,823 
12,894 
Maharashtra 
15,11,989 
10,38,133 
7,34,673 
1,88,340 
27,691 
16,356 
Manipur 
56,037 
47,352 
9,427 
1,446 
841 
436 
Meghalaya 
4,759 
3,780 
1,101 
187 
72 
30 
Mizoram 
40,756 
38,710 
6,102 
950 
625 
206 
Nagaland 
32,335 
31,880 
11,339 
1,050 
511 
307 
Odisha 
2,13,845 
1,70,518 
1,19,377 
9,874 
3,344 
2,091 
Puducherry  
16,394 
16,036 
7,662 
948 
258 
173 
Punjab 
1,32,895 
1,05,882 
63,851 
9,240 
2,339 
1,546 
Rajasthan 
2,76,746 
2,00,245 
1,58,326 
23,429 
5,263 
3,780 
Sikkim 
704 
592 
209 
35 
12 
7 
Tamil Nadu 
6,88,854 
6,32,765 
4,93,176 
48,883 
11,253 
8,885 
Telangana 
2,49,465 
2,40,454 
2,18,362 
30,701 
4,466 
3,146 
Tripura 
94,162 
82,643 
63,038 
2,988 
1,514 
1,146 
Uttar Pradesh 
16,89,673 
15,39,266 
11,99,343 
83,665 
26,638 
21,018 
Uttarakhand 
62,762 
48,453 
27,292 
4,885 
1,159 
732 
West Bengal 
6,91,146 
5,42,425 
3,09,258 
38,339 
11,094 
6,627 
Total 
120 lakh** 
108 lakh* 
68 lakh* 
8 lakh crore. 
2 lakh crore 
1 lakh crore 

Note: * includes completed (3.41 lakh)/ grounded (4.01 lakh) houses of Jawaharlal Nehru National Urban Renewal Mission during mission period; ** Out of 122.69 lakh houses sanctioned as on March JNU31, 2022, 2.24 lakh non-starter houses have been curtailed by some sates against which States to put up new proposals by March 2023. Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS. 

| State/UT                     | No. of functions    | State/UT       | No. of functions    |
|------------------------------|---------------------|----------------|---------------------|
| devolved                     | devolved            |                |                     |
| Andhra Pradesh               | 17                  | Madhya Pradesh | 18                  |
| Arunachal Pradesh            | 13                  | *              |                     |
| Assam                        | 12                  | Manipur        | 07                  |
| Bihar                        | 7                   | Meghalaya      | 16                  |
| Chandigarh                   | 13                  | *              |                     |
| Chhattisgarh                 | 18                  | Nagaland       | 03                  |
| Dadra and Nagar Haveli       | 11                  | Odisha         | 18                  |
| Daman and Diu                | 16                  | Puducherry     | 17                  |
| Delhi                        | 13                  | Punjab         | 18                  |
| Goa                          | 10                  | *              |                     |
| Gujarat                      | 16                  | Sikkim         | 6                   |
| Haryana                      | 18                  | Tamil Nadu     | 17                  |
| Himachal Pradesh             | 16                  | Telangana      | 18                  |
| Jammu and Kashmir and Ladakh | 18                  | Tripura        | 15                  |
| Jharkhand                    | 14                  | Uttar Pradesh  | 8                   |
| Karnataka                    | 17                  | Uttarakhand    | 14                  |
| Kerala                       | 18                  | West Bengal    | 16                  |

Note: * as per the Reform Appraisal Reports Jawaharlal Nehru National Urban Renewal Mission, March 2014. Sources: Unstarred Question No. 4211, Lok Sabha, Ministry Housing and Urban Affairs, March 19, 2020; PRS. 

## Demand For Grants 2023-24 Analysis Petroleum And Natural Gas

The Ministry of Petroleum and Natural Gas is concerned with exploration and production of oil and natural gas, refining, distribution and marketing, import and export, and conservation of petroleum products.  This note looks at the proposed expenditure of the Ministry for 2023-24, and the trends in spending over the last few years.  

## Overview Of Finances1

In 2023-24, the Ministry has been allocated Rs 41,008 crore, a 21% increase over the revised estimates for 2022-23.  

% 
Major Heads 
Actuals 
21-22 
RE 
22-23 
BE  
23-24 
Change 
(BE over 
RE) 
0 
0 
30,000 
- 
Capital Support to OMCs 
0 
22,000 
0 
- 
One Time Grant to OMCs SPR 
339 
219 
5,711 
2509% 
LPG Subsidy 
3,421 
9,171 
2,257 
-75% 
Others 
1,993 
2,494 
3,040 
22% 
Total 
5,754 
33,884 
41,008 
21% 

Note: SPR - Strategic Petroleum Reserves.  OMC - Oil Marketing Company  
Sources: Union Budget Documents 2023-24; PRS. 

Historically, the Ministry's expenditure has followed the price of crude oil.  Since 2011-12, the highest expenditure of the Ministry has been in the year 2012-13 when the price of crude oil rose above USD 100/bbl.  This has been because the government subsidised the prices of oil for the public and the under-recoveries were borne by the government when the prices rose. Earlier, the rise in crude oil prices led to a rise in expenditure since the government controlled the retail prices of petrol and diesel.  By controlling the prices, retail customers were shielded from global increases and fluctuations in oil prices.  The government issued oil bonds to oil marketing companies (OMCs) in lieu of cash subsidies from 2002 to offset the loss faced due to under recoveries.2  As of February 2023, the outstanding value of the oil bonds is Rs 92,200 crore (Rs 1,06,933 crore including interest).  With some of the bonds maturing in the next financial year, the value of the outstanding bonds will reduce to Rs 76,614 crore by February 2024.  All the bonds will mature by April 2026 (See Annexure).3 

## Announcements In 2023-24 Budget Speech

Rs 35,000 crore will be allocated towards priority capital investments to enable energy transition, achieve net zero targets and energy security. Denatured ethyl alcohol will be exempt from basic customs duty to support the Ethanol Blending Program. 

Note: Price of crude oil is the Indian Basket of crude oil; Data for 2022-23 is till December 2022. Sources: Petroleum Planning and Analysis Cell; Union Budget 
2023-24; PRS. Since 2014, the price of petrol and diesel are no longer set by the government but by OMCs based on market conditions and have been revised daily since 2017.4 Under-recoveries, which are the difference between the cost of production and the selling price of commodities (petrol, diesel, kerosene, LPG), have been on a downward trend since the government has allowed OMCs to determine prices.5,6  Under-recoveries on petrol ended in 2011 and on diesel in 2014.  Since 2017 there have been no under recoveries on domestic LPG. However, between June 2020 and June 2022, international price of LPG rose by around 300%.7 In order to insulate domestic consumers, the government did not pass on the entire increase in costs to the consumers and domestic LPG prices rose by 72%.7  The government provided a onetime grant of Rs 22,000 crore to the PSU OMCs in October 2022 for these under-recoveries.8 The Ministry has allocated Rs 30,000 crore towards equity infusion in OMCs.1  Companywise breakup was not provided in budget documents.9  

## Oil Imports

India is heavily dependent on imports for its consumption of oil.  Thus, prices of retail products are affected by international prices and geopolitical events.  India imports crude oil from over fifty countries in 2022; however, the top three countries make up 54% of the imports.10  Imports from Russia shot up by 162% between 2021-22 and 2022-23.11  

products (in USD million) 
| Year     | Total Imports    | Total Exports    |
|----------|------------------|------------------|
| 2011-12  | 1,53,879         | 59,319           |
| 2012-13  | 1,56,883         | 58,848           |
| 2013-14  | 1,55,427         | 60,664           |
| 2014-15  | 1,24,882         | 47,277           |
| 2015-16  | 73,924           | 27,059           |
| 2016-17  | 80,810           | 29,049           |
| 2017-18  | 1,01,440         | 34,940           |
| 2018-19  | 1,28,255         | 38,236           |
| 2019-20  | 1,19,065         | 35,848           |
| 2020-21  | 77,018           | 21,406           |
| 2021-22* | 1,45,915         | 44,438           |

* Data for 2021-22 is provisional. Sources: Petroleum Planning and Analysis Cell; PRS. 

As of 2021, Russia is the third largest producer of oil, producing 11% of the world's supply.  India is the third largest consumer of oil, consuming 5% of the world's supply.12  Following the Russia- Ukraine conflict in February 2022, several heavy sanctions were placed upon Russia.  However, India's import of Russian oil has prevented a spike in energy prices.  According to provisional data from the Ministry of Commerce, Russia will become the third largest exporter of crude oil to India in 2022-23. 13   

## Taxes On Fuel

Petrol and diesel are not taxed under GST; instead, the central government levies a basic custom duty 
 
and excise duty, along with various cesses.  In addition to these, states can levy their own duties such as VAT.   

Breakup of Taxes (in 
Rs/litre) 
Petrol  
 
Diesel  
 
Oct 
21 
Feb 
23 
Oct 
21 
Feb 
23 
Basic Customs Duty 
2.5% 
2.5% 
2.5% 
2.5% 
Additional Customs Duty (CVD) 
14.9 
14.9 
13.8 
13.8 
Additional Customs Duty 
18.0 
5.0 
18.0 
2.0 
Basic Excise Duty 
1.4 
1.4 
1.8 
1.8 
Special Additional Excise Duty 
11.0 
11.0 
8.0 
8.0 
2.5 
2.5 
4.0 
4.0 
Agriculture Infrastructure and Development Cess Road and Infrastructure Cess 
13.0 
5.0 
8.0 
2.0 

Sources: Petroleum Planning and Analysis Cell; PRS. 

Between November 2021 and February 2023, the central government reduced the additional customs duty and the road an infrastructure cess by Rs 13 for petrol and Rs 16 for diesel.14  This duty cut was done to ease the prices of petrol and diesel across the nation as the price of crude increased in 2022.14 

Taxes Collected 
Contribution of Petroleum 
Year 
to Central Tax Revenue 
Through 
Petroleum 
2014-15 
1,26,025 
14% 
2015-16 
2,09,354 
22% 
2016-17 
2,73,225 
25% 
2017-18 
2,76,168 
22% 
2018-19 
2,79,847 
21% 
2019-20 
2,87,540 
21% 
2020-21 
4,19,884 
29% 
2021-22 
4,31,609 
24% 

Source: Petroleum Planning and Analysis Cell, Receipt Budget 2016-17 to 2023-24 
Petroleum is a large source of revenue for central and state exchequers.  In 2021-22, the central government earned Rs 4.3 lakh crore from the petroleum sector with states earning Rs 1.6 lakh crore (See Annexure).15  The collections from petroleum made up 24% of the central tax revenue.  This makes petroleum a valuable source of revenue for the central government and for state governments.  

## Lpg Subsidy

The Ministry provides subsidy on LPG cylinders to consumers.  Prior to 2013, this subsidy was provided in the form of 139ubsidized cylinders. Following the launch of the PAHAL (Pryatakh Hanstantrit Labh) scheme in 2013, this subsidy is directly credited to the bank accounts of the beneficiary.16  In 2023-24, the Ministry has budgeted Rs 2,257 crores on the LPG subsidy, which is a 75% decrease from the revised estimates of 2022-2023.  The LPG subsidy constitutes 5.5% of the allocation to the Ministry.  

## Direct Benefit Transfer - Pahal

The PAHAL scheme was launched initially in 2013 (with 54 districts in the first phase) and launched in the rest of the country in January 2015.17  Under the scheme, a consumer can avail Direct Benefit Transfer (DBT) cash-subsidy for an LPG cylinder.  The beneficiaries buy LPG cylinders at market rate and subsequently receive subsidies directly in their bank accounts. In 2023-24, Rs 180 crore has been earmarked for DBT-PAHAL.  This is the same as the allocation in the revised estimates for 2022-23.  As mentioned earlier, even though the price of LPG has risen, the government has regulated the retail prices offered by OMCs.  The government has instead compensated OMCs with a one-time grant of Rs 22,000 crore to cover their losses.  Targeted subsidies undertaken under the PM Ujjwala Yojana have also shifted some of the burden from the OMCs to the Ministry. According to the government, the PAHAL scheme has also resulted in cumulative savings of Rs 72,910 crore as of March 2021.18  Further, 4.11 crore duplicate, fake/non-existent and inactive LPG connections have been eliminated.18  There are 1.79 crore non-subsidised customers, out of which 1.08 crore are those who have given up their LPG subsidy under the 'Give It Up' 
campaign.18 The Comptroller and Auditor General (CAG) 
released a report on 'Implementation of PAHAL 
Scheme' in 2016.19  It noted that the scheme appears to have addressed the concern regarding diversion of subsidised LPG cylinders to commercial consumers.19  However, the risk of diversion of non-subsidised domestic LPG to commercial consumers still remains as there is a significant difference in the cost of non-subsidised domestic LPG and commercial LPG.19  
Commercial LPG is sold in 19 kg cylinders as opposed to 14.2 kg cylinders for domestic use. Thus, it is priced higher.  

## Pradhan Mantri Ujjwala Yojana

The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May 2016 to provide LPG connections to adult women of poor households.20 The eligibility list includes households belonging to the Socio Economic Caste Census (SECC) list or SC/ST households, Most Backward Classes households, PM Awas Yojana (Gramin) households, Antyodaya Anna Yojana households, forest dwellers, resident of islands, tea garden workers or households not mentioned in the above categories provided they submit relevant documentation.21  The scheme targeted providing three crore connections to women by March 2018 which was achieved by February 2018.22 In August 2021, the government launched Phase 2 of PMUY (Ujjwala 2) with a target to release one crore PMUY connections that was also achieved in January 2022.22  Subsequently, the government decided to release 60 lakh more connections under Ujjwala 2, which has been achieved in January 
2023.22  As of February 1, 2023, the government has released a total of 9.6 crore PMUY connections.22  Cumulatively, the highest number of connections have been released to Uttar Pradesh (1.8 crore), West Bengal (1.2 crore), and Bihar (1.1 crore).22  
 
Note: No new PMUY Connections were released in 2020-21. Sources: Indian Petroleum & Natural Gas Statistics 2021-22; PRS.  
In 2022-23, PMUY was allocated Rs 800 crore at the budget stage.1  However, in the revised estimates the allocation shot up to Rs 8,010 crore. This can be attributed to a subsidy of Rs 200 per 14.2 kg cylinder of LPG, up to 12 refills a year, for PMUY beneficiaries.  This subsidy, started in 
2022-23, intends to encourage the use of LPG and is directly credited to the beneficiary's bank account.23  There is no allocation for this subsidy in 2023-24.   
Fuels used for cooking in India:  According to the National Family Health Survey-5 (2019-21), 89.7% of households in urban areas used clean fuel for cooking.24  In rural areas, the number drops to 43.2% of households.  On average, 58.6% of households use a clean fuel for cooking as compared to 43.8% (an increase of 14.8%) in the NFHS in 2015-16.24   

## Kerosene Subsidy

The government provides a subsidy for kerosene; however, there has been no allocation for the subsidy in 2022-23 or in the current budget.  The government has been attempting to eliminate kerosene subsidy to reduce usage of kerosene and encourage the use of LPG as a cleaner alternative. In 2021-22, the government spent Rs 1.5 crore on the subsidy.  In the revised estimates of 2022-23, no allocation has been made towards the subsidy. Between 2011-12 and 2021-22, the consumption of kerosene has reduced by 82%.25  This can be attributed to the aggressive curbing of the subsidy, as well the promotion of LPG.  The government has also invested in infrastructure for LPG such as building new distribution centres, pipelines, terminals and increasing the processing capacity.26 Currently, only eleven states/Uts have zero PDS kerosene consumption, with Uttarakhand being the latest state to have zero sales for 2021-22.26  

## Production, Imports And Exports

India depends heavily on imports to meet its energy requirements.  In 2021-22, India has imported 2,12,382 thousand metric tonnes (TMT) of crude oil.  Since 2011-12, the import of crude oil has been increasing at an average rate of 2% a year.27   Crude oil is refined to produce various products such as petrol, diesel, LPG and kerosene.27  These petrochemicals are final products, raw materials and intermediaries in the production of various goods across sectors.  India also exports some products.  However, the quantity of exports has marginally increased from 
60,837 TMT in 2011-12 to 62,755 TMT in 2021-
22. 27  
India's production of crude oil and condensate has fallen from 3,082 TMT in 2011-12 to 29,688 TMT in 2021-22 at an average rate of 2% per annum.28 The Ministry has attributed this to the faster depletion of the oil fields than expected.29  As of 2021-22, the top three exporters of oil to India were Iraq, Saudi Arabia, and the United Arab Emirates (UAE).  However, as per data from April-November 2022, Russia is expected to surpass the UAE as the third largest exporter of crude oil to India in 2022-23.30 India exported petroleum products worth USD 67 
billion in 2021-22.30  India's top export countries for the year were Singapore (USD 6.1 billion), the United Arab Emirates (USD 5.7 billion) and the Netherlands (USD 5.3 billion).30  In 2022-23, between April to November, India exported USD 65 billion worth of petroleum products.  Its top export countries were the Netherlands (USD 6.4 billion), the United Arab Emirates (USD 5.5 billion), and the United States of America (USD 
3.7 billion).30  

## Lng Production And Imports

Apart from crude oil, India is also a large consumer of Liquified Natural Gas (LNG).  In 2021-22, India's imports as a percentage of consumption of LNG were 48% which is much higher than 2011-12 levels (28%).31  
 
MMSCM: Million Metric Standard Cubic Meters. Note: Data for 2022-23 is from April-December 2022. Sources: Petroleum Planning and Analysis Cell; PRS. 

In 2021-22, India produced 33,131 MMSCM (Million Metric Standard Cubic Meters) of LNG 
and imported 30,776 MMSCM.31  The amount of LNG being produced in India has been declining at an average rate of 6% every year since 2011-12, while the amount of LNG imported over the same period has risen by 7% on average.31  
A key factor in increasing the use of natural gas as an energy source is infrastructure.  As of September 2022, the total operational length of the natural gas pipeline network is 21,102 km.32  This includes 6,678 km of partially commissioned pipelines.32  A further 12,005 km of pipelines is under construction, which would bring the total length to 33,107 km.32 Currently, India has five operational LNG terminals with a total capacity of 40.4 MMT-PA 
(Million Metric Tonnes Per Annum).26  Six more terminals are planned/under construction, which will provide an additional capacity of 22.3 MMT-
PA.26  

## Strategic Petroleum Reserves

The Indian Strategic Petroleum Reserve Ltd. Is a government undertaking that has established Strategic Petroleum Reserves (SPR) which can be used in emergencies and/or supply chain disruptions.  Under Phase-1 of the program, India has set up an SPR capacity of 5.33 MMT (Million Metric Tonnes), which can cover 9.5 days of India's demand of crude oil.33 

## Green Hydrogen

Green hydrogen uses solar or wind energy to produce 
hydrogen.34  While Green Hydrogen comes under the 
Ministry of New and Renewable Energy, it is an important 
component in ensuring energy security.  Under the 
National Green Hydrogen Mission, the government is 
investing Rs 19,744 crore to develop at least 5 MMT of 
production capacity.35  Green hydrogen has uses in a 
variety of sectors and is expected to reduce imports and 
carbon emissions.  It can be used as a fuel for 
automobiles, replace LNG as an energy source and be 
used to create fertilizer among other uses.36 

## And Status

| Location         | Capacity    | Status      |
|------------------|-------------|-------------|
| Vishakapatnam    | 1.33        | Completed   |
| Manglauru        |             |             |
| 1.5              | Completed   |             |
| Padur            | 2.5         | Completed   |
| Chandrikhol      | 4           | In Progress |
| Padur (Phase II) | 2.5         | In Progress |

Source: Ministry of Petroleum and Natural Gas; PRS. 

The completion of the additional caverns (Chandrikhol and Padur, Phase II) will provide India with a further capacity of 6.5 MMT of strategic reserves, which can cover an additional 12 days of domestic demand.33 In 2023-24, Rs 5,000 crore has been allocated to ISPRL to buy crude oil to fill strategic reserves. Moreover, Rs 508 crore has been allocated towards the construction of caverns.  

## Energy Security

The Standing Committee on Petroleum and Natural Gas (2021-22) has taken cognizance of India's heavy reliance on imports to meet its energy needs and has made recommendations on the same.29  The government has a four-plank program to ensure energy security: (i) diversify energy sources, (ii) increase exploration and production, (iii) use alternate energy sources, and (iv) transition to hydrogen and electric vehicles.37   

## Diversification Of Energy Sources

In 2021-22, India imported crude oil from 39 countries compared to 27 in 2006-07.37  The exploration acreage is expected to increase to 5,00,000 sq. km. by 2025 and to 10,00,000 sq. km. 

by 2030.37   

## Ethanol Blending

Ethanol Blending is the practice of blending ethanol with petrol for retail sale.  It has benefits such as reduced emissions and lesser dependence on crude oil.  In 2013-14, India would blend 1.53% ethanol with petrol, which has increased to 10.17% in 2021-22.38  On February 6, 2023, the government began the first phase of selling E20 petrol, which is petrol blended with 20% ethanol.38 E20 blended fuel has been launched at 84 outlets in 11 states/Uts.  According to the government, since 2014, the ethanol blending program has helped save foreign exchange of Rs 54,000 crore due to the lesser imports (as compared to without ethanol blending).38 A key constraint for ethanol blending is the production of ethanol.  A large amount of ethanol is produced using molasses which is derived from sugarcane.  The current production capacity of ethanol for blending and other purposes is 947 
crore litres, out of which 619 crore litre is molasses based and 328 crore litre is grain-based production.39  Sugarcane is a water intensive crop; hence increased production could have adverse consequences for water security. 

## Pm Ji-Van Yojana

In March 2019, the government notified the PM JI-VAN (Pradhan Mantri Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran Yojana).40  This scheme provides support for setting up second generation ethanol projects.  These projects can produce ethanol using lignocellulosic biomass and other renewable feedstock.41 In 2023-24, the Ministry has budgeted Rs 227 crore for the scheme, which is an increase of 173% from the revised estimates of 2022-23. Under the scheme, the government provides financial support of at most Rs 150 crore for each commercial project, and Rs 15 crore for each demonstration project.41  The projects seek to improve commercial viability, research and development and adoption of technologies in producing second generation ethanol.41  
As of July 21, 2022, the government has provided Rs 152 crore of support to four commercial projects in Bathinda (Punjab), Panipat (Haryana), Bargarh (Odisha) and Numaligarh (Assam) as well as a demonstration project in Panipat.  The commercial projects are in advanced stages of construction and are expected to be commissioned in 2022-23.41  

## Autonomous Bodies

The Ministry has set up the Indian Institute of Petroleum Energy (IIPE) in 2017 as an autonomous institute under the Ministry to provide skilled labour for the petroleum sector.42  It is an Institute of National Importance and is backed by an Act of Parliament.43  The IIPE was set up in Vishakhapatnam, Andhra Pradesh, with the state 
2 "Government Sanctions Issue of Rs. 9,000 Crore Bonds to Oil Companies." Press Information Bureau, April 1, 2002, https://archive.pib.gov.in/archive/releases98/lyr2002/rapr2002/ 01042002/r010420027.html. 3 Receipt Budget 2023-2024, Ministry of Finance Budget Division, https://www.indiabudget.gov.in/doc/rec/allrec.pdf. 4 "Daily revision in retail selling prices of petrol & diesel across the country w.e.f. 16th June 2017." Press Information Bureau, June 8, 2017, https://pib.gov.in/PressReleasePage.aspx?PRID=1492299. 5 "Deregulation of Petroleum Prices." Press Information Bureau, March 11, 2015, https://pib.gov.in/newsite/PrintRelease.aspx?relid=116818. 6 Petroleum Prices and Under Recoveries, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, https://ppac.gov.in/prices/petroleum-prices-and-underrecoveries. 

7 "Cabinet approves Rupees 22,000 crore as one time grant of PSU OMCs for losses in Domestic LPG." Press Information Bureau, October 12, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1867088. 8 "Cabinet approved Rupees 22,000 crore as one time grant of PSU OMCs for losses in Domestic LPG", Press Information Bureau, Cabinet, October 12, 2022, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1867085.  
government providing 200 acres of land.42  It is strategically located near the KG-Basin (a large natural gas basin), the Vishakhapatnam refinery and the planned Kakinada petrochemical complex. In 2017, the Cabinet approved Rs 655 crore of capital expenditure for the project and contributed Rs 200 crore to the endowment fund.42  In addition, OMCs also contributed Rs 200 crore to the endowment fund.  For 2023-24, the Ministry has budgeted Rs 168 crore towards capital expenditure for the project, against Rs 100 crore for the revised estimates of 2022-23.1  
The Standing Committee also noted that another Institute; the Centre for Excellence of Energy (CEE) in Bangalore, had received no allocation in the budget for 2022-23.  The CEE has not received any allocation in the revised estimates for 2022-23 or the estimates for 2023-24.   The institute has been established for basic research.

Gas, https://ppac.gov.in/prices/contribution-to-central-and- 16 "PAHAL (Pratyaksh Hanstantrit Labh)." Ministry of Petroleum and Natural Gas, Accessed on February 10, 2023, https://mopng.gov.in/en/marketing/pahal. 17 "About the Scheme", PAHAL-Direct Benefits Transfer for LPG(DBTL) Consumers Scheme, Accessed February 19, 2023, http://petroleum.nic.in/dbt/whatisdbtl.html. 18 Estimated Benefits/ Gains from DBT and Other Governance Reform, Direct Benefit Transfer, https://dbtbharat.gov.in/estimatedgain. 19 Implementation of PAHAL (DBTL) Scheme, Comptroller and Auditor General of India, 2016, https://cag.gov.in/webroot/uploads/download_audit_report/201 6/Union_Commercial_Compliance_Full_Report_25_2016_Eng lish.pdf. 20 "PM to launch Ujjwala 2.0 on 10th August", Press Information Bureau, Prime Minister's Office, August 8, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1743813. 21 "Cabinet approves enhancement of target under Pradhan Mantri Ujjwala Yojana." Press Information Bureau, February 
7, 2018, https://pib.gov.in/newsite/PrintRelease.aspx?relid=176351. 22 Lok Sabha Starred Question No. 2, Minister of Petroleum and Natural Gas, February 2, 2023, https://pqals.nic.in/annex/1711/AS2.pdf. 23 Lok Sabha Unstarred Question No. 2618, Minister of Petroleum and Natural Gas, December 22, 2022, https://pqals.nic.in/annex/1710/AU2618.pdf. 24 National Family Health Survey-5 (2019-21), Ministry of Health and Family Welfare, http://rchiips.org/nfhs/NFHS- 5_FCTS/Final%20Compendium%20of%20fact%20sheets_Indi a%20and%2014%20States_UTs%20(Phase-II).pdf. 25 Consumption of Petroleum Products, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, https://ppac.gov.in/consumption/products-wise. 26 Indian Petroleum and Natural gas Statistics 2021-22, Ministry of Petroleum and Natural Gas Statistics Division, https://mopng.gov.in/files/TableManagements/IPNG-2021- 22_L.pdf. 27 "Import/Export of Crude Oil and Petroleum Products." Petroleum Planning and Analysis Cell, https://ppac.gov.in/import-export. 28 Indigenous Crude Oil Production, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, 
 
and Natural Gas, March 2022, https://loksabhadocs.nic.in/lsscommittee/Petroleum%20&%20 Natural%20Gas/17_Petroleum_And_Natural_Gas_10.pdf. 30 Export/Import Data Bank, Department of Commerce, Ministry of Commerce and Industry, https://tradestat.commerce.gov.in/eidb/Icomcnt.asp. 

31 Natural Gas Consumption, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, https://ppac.gov.in/natural-gas/consumption. 32 Pipeline Structure, Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, https://ppac.gov.in/natural-gas/pipeline-structure. 33 "Strategic Crude Oil Reserves." Press Information Bureau, February 3, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1694712. 34 Harnessing green hydrogen opportunities for deep decarbonization in India, NITI Aayog and Rocky Mountain Institute (RMI), June 2022, https://www.niti.gov.in/sites/default/files/2022- 06/Harnessing_Green_Hydrogen_V21_DIGITAL_29062022.p df. 35 "Cabinet approves National Green Hydrogen Mission." Press Information Bureau, January 4, 2023, https://pib.gov.in/PressReleasePage.aspx?PRID=1888547. 36 "National Green Hydrogen Mission." Ministry of New and Renewable Energy, Accessed February 14, 2023, https://mnre.gov.in/hydrogen_energy_government_of_india#:~ :text=The%20initial%20outlay%20for%20the,implementation %20of%20the%20respective%20components. 37 "India's 4-plank energy security strategy is based on diversifying supplies, increasing E&P, alternate energy sources 
 
 
and energy transition through a gas-based economy, Green Hydrogen etc." Press Information Bureau, January 10, 2023, https://www.pib.gov.in/PressReleasePage.aspx?PRID=188996 7. 38 "Prime Minister launches E20 Fuel & flags off Green Mobility Rally in Bengaluru today." Press Information Bureau, February 6, 2023, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=189672 9. 39 "The current ethanol production capacity for ethanol blending with petrol and other uses is about 947 crore litres (which includes 619 crore litres of molasses-based production capacity and 328 crore litres of grain-based production capacity)." Press Information Bureau, December 21, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1885392. 40 S.O. 1171(E), The Gazette of India, Ministry of Petroleum and Natural Gas, March 8, 2019, https://mopng.gov.in/files/uploads/PM_JI-VAN_YOJANA.pdf. 41 "Pradhan Mantri JI-VAN Yojana." Press Information Bureau, July 21, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1843441. 42 "Cabinet approves setting up of Indian Institute of Petroleum and Energy (IIPE) at Visakhapatnam in Andhra Pradesh." Press Information Bureau, April 12, 2017, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=148772 1. 43 The Indian Institute Of Petroleum And Energy Act, 2017, No.3 of 2018, January 5, 2018, https://legislative.gov.in/sites/default/files/A2018-03.pdf. 

  

## Annexure: Petroleum And Natural Gas

| Year    | Repayment    | Interest    |
|---------|--------------|-------------|
| 2023-24 | 15,586       | 6,848       |
| 2024-25 | 39,701       | 5,153       |
| 2025-26 | 36,913       | 2,732       |

Sources: Receipts Budget 2023-24; PRS calculations. 

 

| Total Contribution      | Contribution of    |
|-------------------------|--------------------|
| Contribution to State   |                    |
| Year                    |                    |
| Contribution to Central |                    |
| Petroleum to Central    |                    |
| Tax Revenue             | Tax Revenue        |
| Central Net             |                    |
| Tax Revenue             |                    |
| of Petroleum to         |                    |
| Tax Revenue             | Taxes              |
| 2014-15                 | 1,26,025           |
| 2015-16                 | 2,09,354           |
| 2016-17                 | 2,73,225           |
| 2017-18                 | 2,76,168           |
| 2018-19                 | 2,79,847           |
| 2019-20                 | 2,87,540           |
| 2020-21                 | 4,19,884           |
| 2021-22                 | 4,31,609           |
| 2022-23                 | 1,74,471           |

Note: 2022-23 data is provisional and from April - December. Central Net Tax Revenue for 2022-23 is based on Revised Estimates. 

Source: Budget Receipts 2016-17 - 2023-24; Petroleum Planning and Analysis Cell; PRS Calculations.   

## Demand For Grants 2023-24 Analysis Women And Child Development

The Ministry of Women and Child Development was constituted to address gaps in state action for women and children and to create equitable legislation, policies, and programmes relating to the welfare of women and children.1  As the nodal ministry for the development of women and children, the Ministry covers welfare services, gender sensitisation, and training for employment generation for women.  Many of the programmes run by the Ministry play a complementary role to developmental programmes in the sectors of health, education, rural development, and safety of women. This note looks at the proposed expenditure for the Ministry of Women and Child Development for 2023- 24, financial trends, and related issues with schemes and programmes of the Ministry.   

## Overview Of Finances Budget Allocation In 2023-24

In 2023-24, the Ministry has been allocated Rs 25,449 crore, a 6% increase over the revised estimates of 2022- 23.2  About 99.8% of the Ministry's total expenditure is revenue expenditure. 

2021-22 
Actuals 
2022-
23 RE 
2023 
24 BE 
% change 
from 22-
23 RE to 
23-24 BE 
Revenue 
21,655 
23,911 
25,444 
6% 
Capital 
- 
2 
5 
154% 
Total 
21,655 
23,913 
25,449 
6% 

Note: BE- Budget Estimates; RE- Revised Estimates Source: Demand No. 101, Ministry of Women and Child Development, Union Budget 2023-24; PRS. 

 
Between 2016-17 and 2021-22, the actual expenditure by the Ministry has increased at annualised growth rate of 4.2%.   

## Underutilisation Of Funds For Several Years

In all years between 2016-17 and 2021-22, the actual expenditure by the Ministry was lower than the demand 
(**Figure 2**).  For instance, in 2019-20, the Ministry was allocated Rs 29,165 crore and utilised Rs 23,165 crore in the financial year.  The Rs 6,000 crore difference in budgetary estimates and actual expenditure translates to 21% of the funds unused for the year.3  Between 2016- 17 and 2020-21, fund utilisation worsened.  The Standing Committee on Women and Children (2022) noted that underutilisation of funds indicated either poor financial planning or gaps in planning, implementation, and monitoring of schemes.3   It observed that the underutilisation in 2020-21 could be partially explained through the COVID-19 pandemic. The Committee recommended the Ministry to exercise proper financial planning and ensure proper implementation of schemes.  
Note: Figures for 2022-23 are revised estimates. Source: Ministry of Women and Child Development Demand for Grants between 2017-18 and 2023-24; PRS. 

## Share Of Ministry'S Allocation In The Union Budget Declining Over The Years

The Standing Committee on Human Resource Development (2020) noted that the share of the allocation towards the Ministry in the Union Budget has remained unchanged at about 1% over the previous five years.4  It observed that women and children in both rural and urban areas still lag in human and social development.  The Ministry is responsible to ensure that women and children have access to basic services such as health, nutrition, and education.  Hence, the Ministry's share in the Union Budget should be increased.  Since the Committee's report the Ministry's share in the budget has decreased.  In 2023-24, allocation to the Ministry forms 0.6 % of the total union budget.  Since 2022-23, the ministry's allocation has remained at 0.6% of the total union budget.  

## Allocation Towards Key Schemes

The schemes run by the Ministry were rationalised in 2021-22.  New schemes have been launched to subsume components of the erstwhile Umbrella ICDS and Mission for Protection and Empowerment for Women.  For details, see **Table 7** in the Annexure.  In 
2023-24, about 99% of the Ministry's total allocation was distributed amongst three centrally sponsored schemes.  About 81% of the Ministry's allocation is towards the Saksham Anganwadi and POSHAN 2.0 scheme followed by Mission Shakti (12%).  About 6% of the Ministry's allocation in 2022-23 is towards the Mission Vatsalya scheme.  Around Rs 258 crore has been allocated amongst autonomous bodies such as National Commission for Women, Central Adoption Agency, and the National Commission for the Protection of Child's Rights.  Refer to **Table 2** for an overview of key schemes under the Ministry.  

% 
Key Heads 
2021-22 
Actuals 
2022-
23 RE 
2023-
24 BE 
Change 
(BE 
2023-24/ 
RE 
2022-23) 
Saksham Anganwadi and POSHAN 2.0  
18,382 
20,263 
20,554 
1% 
Mission Shakti 
1,912 
2,280 
3,144 
38% 
Mission Vatsalya 
761 
1,100 
1,472 
34% 
Others* 
99 
250 
258 
3.5% 
Mission for Protection and Empowerment of Women 
500 
20 
20 
- 
Total 
21,655 
23,913 
25,449 
6.4% 

Note: Others* include transfers to autonomous bodies such as National Commission for Women, Central Adoption Resource Agency, and National Commission for Protection of Child Rights. Source: Demand No. 101, Ministry of Women and Child Development, Union Budget 2023-24; PRS. 

## Key Areas Of Expenditure Saksham Anganwadi And Poshan 2.0

Saksham Anganwadi and POSHAN 2.0 is an integrated nutrition support programme.5  The scheme seeks to address the challenges of malnutrition in children, adolescent girls, pregnant women, and lactating mothers.  The schemes of Anganwadi Services, Scheme for Adolescent Girls, and Poshan Abhiyan have been realigned under the scheme to maximise nutritional outcome.  The scheme has been organised to address three primary verticals: (i) nutritional support for women, children, and adolescent girls, (ii) early childhood care and education (3-6 years), and (iii) anganwadi infrastructure including modernisation. POSHAN 2.0 shall focus on maternal nutrition, infant and young child feeding norms, treatment of Moderate Acute Malnutrition (MAM)/Severe Acute Malnutrition (SAM), and wellness through AYUSH.  In 2023-24, the scheme was allocated Rs 20,554 crore, which is an increase of 1% from the revised estimates of 2022-23. The scheme forms 0.5% of the total union budget.  

## Allocation Towards Saksham Anganwadi And Poshan 2.0 Is Lower Than The Schemes It Subsumed

The budget allocation towards the Saksham Anganwadi and POSHAN 2.0 scheme in 2021-22 and 2022-23 has been lower than the allocation towards subsumed components in previous years (**Figure 4**).  In 2023-24, the scheme has been allocated Rs 25,449 crore, an increase of 6% over revised estimates of 2022-23 (Rs 23,913 crore).    
Note: Figures for 2022-23 are Revised Estimates. From 2017-18 to 2020-21, the total for three schemes have been taken- (i) Anganwadi Services (Erstwhile Core ICDS), (ii) National Nutrition Mission (including ISSNIP), (iii) Scheme for Adolescent Girls.  From 2021- 22, these three schemes were revamped under the Saksham Anganwadi and POSHAN 2.0 scheme.  In 2021-22, the National Creche Scheme was included under the umbrella scheme, figures of the year include the National Creche Scheme. Source:  Ministry of Women and Child Development Demand for Grants for various years; PRS. 

Anganwadi Services seek to: (i) improve the nutritional and health status of children (up to 6 years), 
 
and (ii) reduce the incidence of mortality, morbidity, malnutrition, and school dropouts.   Anganwadi Centres (AWCs) provide public welfare services which include: (i) immunisation, (ii) supplementary nutrition, (iii) nutrition and health education, and (iv) health checkups.  The facilities provided at AWCs are: (i) 
supplementary nutrition, (ii) pre-school non-formal education, (iii) nutrition and health education, (iv) immunisation, (v) health check-up, and (vi) health referral services.6 

## Infrastructural Deficiencies

The Standing Committee on Women and Child Development (2022) highlighted the central role of AWCs in improving delivery of health services.3  It observed that lack of adequate facilities at AWCs affected low-income families as they had to turn to paid options.  Further, a Comptroller and Auditor General (CAG) Report (2019) reported that the infrastructure in AWCs was deficient and lacked basic facilities, such as drinking water, toilet, electricity, and essential drugs.7 As of March 2019, there were delays in completing the construction of 5,915 AWCs and non-use of 1,487 AWCs due to dilapidated conditions.7  In 2021-2022, nine states had less than two-thirds of AWCs with toilets, with Arunachal Pradesh reporting 7% of AWCs having toilet facilities (for details, see Table 10 in Annexure).8  The Ministry informed the Committee that it has been conducting zonal meetings across the country to collect best practices of working conditions.9 The Committee recommended the Ministry to prepare a blueprint in consultation with states towards infrastructure development and capacity building of AWCs.9  To raise alternative sources of funding, the Ministry proposed that states may involve individuals, companies, and CSR funds for construction of AWCs purely on a pro-bono basis without any obligations.9 
Note: *up to June 2021. Source: Report No. 338: Demands for Grants 2022-23 of the Ministry of Women and Child Development, Standing Committee on Education, Women, Children, Youth and Sports, March 16, 2022; PRS. 

Remuneration for Anganwadi Workers and Helpers: 
Anganwadi Services Scheme envisages the Anganwadi Workers (AWWs) and Anganwadi Helpers (AWHs) as 
'honorary workers' from the local community who 
 
 
come forward to render their services, on part time basis.3  The prescribed cost sharing ratio between the central and state governments for the honorarium given to AWWs and AWHs is: (i) 60:40 for states/UTs with legislature, (ii) 90:10 for North-eastern and Himalayan states, and (iii) paid completely by the centre for UTs without legislature.10  In September 2018, the central government enhanced the honorarium of AWWs and AWHs (see **Table 3**).11  Performance-based incentives are also paid to AWW at Rs 500 and Rs 250 for AWHs per month.  Further, states also pay additional monetary incentives/honorarium from their own resources.12  For instance, Madhya Pradesh, as of March 2022, pays an additional monetary incentive of Rs 7,000 to AWWs and Rs 3,500 to AWHs. 13  As of December 12, 2022, there is no provision for consideration to enhance the honorarium given to AWWs and AWHs.12 The Standing Committee on Education, Women, Child Youth and Sports (2021) recommended the Ministry to consider further increasing the remuneration to provide better service conditions for them.14 

 
Existing 
Revised 
3,000 
4,500 
Anganwadi workers at main Anganwadi 
2,250 
3,500 
Anganwadi workers at mini Anganwadi Anganwadi helpers 
1,500 
2,250 

Source: Unstarred Question No. 3992, Rajya Sabha, Ministry of Women and Child Development, April 06, 2022; PRS.   

## High Vacancies For Certain Positions In Awcs:

As of March 2021, 31% of Child Development Project Officers were vacant at the national level.  The Standing Committee on Human Resource Development (2018) had observed that availability of staff and key functionaries in AWCs has been a continued area of concern.15  In response to the issue of vacancy, the Ministry stated that the recruitment of staff is done by states.  The Committee recommended that the Ministry should take up the matter with states to ensure that vacancies are filled up at the earliest.   
 
Source: Unstarred Question No. 3068, Lok Sabha, Ministry of Women and Child Development, August 6, 2021; PRS.   

## Underutilisation Of Funds Under Poshan 2.0

POSHAN Abhiyaan is the key pillar for outreach under POSHAN 2.0.  It covers innovations related to nutrition, ICT interventions, media advocacy and research, community outreach, and jan andolan.19 Cost sharing ratio between the centre and states/UTs is: (i) 60:40 for states/UTs with legislature, (ii) 90:10 for North Eastern and Himalayan states, and Jammu and Kashmir, and (iii) 100% for UTs without legislature.16 States with the lowest level of utilisation include: (i) Punjab (34%), (ii) Uttar Pradesh (34%), (iii) Rajasthan 
(43%), and (iv) Odisha (46%) (see **Table 8** in Annexure for details). Since, 2017-18, the Ministry has released Rs 5,403 crore under POSHAN Abhiyan.  Of this, 34% of the funds have not been utilised (Rs 3,573 crore).19  About 17% of overall allocation has been spent on the procurement of smartphones.17 Further, there has been a decline in the allocation of funds under POSHAN Abhiyan to states in the past few years.  A NITI Aayog Report (2021) observed that less than half of the funds were utilised in 23 states and UTs.18  Fund utilisation was lower in states/UTs with a low distribution of mobile phones and growth monitoring devices. As of February 10, 2023, the Ministry has not released funds under the scheme for the year 2022-23.19 

## Malnutrition Increased Amongst Children In Certain States/Uts

The Standing Committee on Education, Women, Children, Youth and Sports (2022) noted the importance of the effective implementation of Mission POSHAN 2.0 in addressing the challenges of malnutrition.3  The Committee observed that malnutrition increased significantly amongst children in 22 states/UTs between 2015-16 and 2019-20.20  Key indicators to measure levels of child malnutrition include share of children (under five years) who are: (i) stunted (too short for their age), (ii) wasted (thin for their height), and (iii) underweight.  13 of the 22 states/UTs assessed reported an increase in stunting of children between 2015-16 and 2019-20.  The states/UTs which saw the highest increases are Gujarat, Kerala, Lakshadweep, Nagaland, and Tripura (see Table 11 in the Annexure for state/UT-wise details on malnutrition in children). One of the targets of POSHAN Abhiyan is to bring down stunting of children in the age group of 0-6 years from 38% to 25% by 2022.3  According to the National Family Health Survey - 5 (2022), 36% of children under the age of five are stunted.21  The survey also observed that stuntedness was a sign of chronic undernutrition among children.   
 
Source: National Family Health Survey-5 (2019-21); PRS. 

## Increase In Anaemia Among Women And Children

Anaemia is a condition of low levels of haemoglobin in the blood.21  Iron is a key component of haemoglobin, and iron deficiency is estimated to be responsible for half of all anaemia globally.  Anaemia in children can impair cognitive development, stunted growth, and increase morbidity from infectious diseases. There was an average of 8% increase in anaemic levels across women and children between 2015-16 and 2019- 21.21  Rise of anaemia has been observed across different groups of women and children between 2015- 16 and 2019-21.  For instance, there has been 14.5% increase in anaemia in children below the age of five years (see **Table 4**).  The Standing Committee on Education, Women, Children, Youth and Sports (2021) noted that the efficacy of the POSHAN 2.0 should be assessed on the prevalence of malnutrition and other related problems among children and women.4  

%) 
% change 
in anaemic 
Targets 
NHFS-4 
2015-16 
NFHS-5 
2019-21 
levels 
Children below the age of 5 years 
58.6 
67.1 
14.5% 
Non-pregnant women (15-49 years) 
53.2 
57.2 
7.5% 
Pregnant women (15- 49 years) 
50.4 
52.2 
3.6% 
All women (15-19 years) 
54.1 
59.1 
9.2% 
All women (15-49 years) 
53.1 
57.0 
7.3% 

Source: National Family Health Survey-5 (2019-21); PRS. 

Anaemia among children (age 6-59 months) was the highest in Gujarat (80%), followed by Madhya Pradesh (73%), Rajasthan (72%), and Punjab (71%).21  Anaemia among women was 60% or more in Chhattisgarh, Bihar, Odisha, Gujarat, Jharkhand, Assam, Tripura, and West Bengal.  See Table 9 and 10 in Annexure for state wise details on anaemia among women and children. The Ministry had set targets for combating malnutrition in women and children in 2018 (see **Table 5**).  

| Category       | Target    |
|----------------|-----------|
| NFHS-4         |           |
| 2015-16 (in    |           |
| % Point        |           |
| Change         |           |
| %)             |           |
| NFHS -5        |           |
| 2019-21        |           |
| (in %)         |           |
| 38.4*          | 35.5*     |
| 2%             |           |
| p.a.           |           |
| Stunting in    |           |
| children (0-6  |           |
| years) *       |           |
| 35.8*          | 32.1*     |
|                |           |
| 3.7            |           |
| 2%             |           |
| p.a.           |           |
| Underweight    |           |
| prevalence in  |           |
| children (0-6  |           |
| years) *       |           |
| 58.6           | 67.1      |
| 3%             |           |
| p.a.           |           |
| Anaemia        |           |
| among          |           |
| children (6-59 |           |
| months)        |           |
| 53.1           | 57.0      |
| 3%             |           |
| p.a.           |           |
| Anaemia        |           |
| among women    |           |
| (15-49 years)  |           |

Note: p.a.- per annum; *data for children under five years. Source: Unstarred Question No.663, Lok Sabha, Ministry of Women and Child Development, December 09, 2022; PRS.   

## Mission Vatsalya

Mission Vatsalya is a centrally sponsored scheme that provides: (i) assistance to homes for children, (ii) juvenile justice for children in need of care and children in conflict with law, and (iii) integrated programme for street children.22  In 2021, Mission Vatsalya subsumed the erstwhile Child Protection Scheme.22  In 2023-24, Rs 1,472 crore has been allocated to the scheme, an increase of 34% over the revised estimates of 2022-23.  

## Disparity In Child Care Institutions

The Ministry administers the Juvenile Justice (Care and Protection of Children) Act, 2015.23  The 2015 Act provides for the protection of children in need of care of protection and those in conflict with law by catering to their basic needs.  Basic needs are listed as; (i) care protection, (ii) development treatment, (iii) social reintegration.  Under Section 106 of the Act, the implementation of the Act lies with the states/UTs.24 Child Care Institutions (CCIs) including observation homes usually accommodate 50 children each and 25 children in Northeastern and Himalayan states.23 Under Mission Vatsalya, support is provided for one educator, one arts cum music teacher, and one PT instructor for each CCI with 50 children.23  In 2020-21, there were a total of 77,615 beneficiaries and 2,215 CCIs.3 As on March 2022, there were states, such as Odisha, Himachal Pradesh, and Arunachal Pradesh, that did not have a single juvenile observation home.23  No UTs without a legislature other than Chandigarh had a juvenile observation home.  Further, the Standing Committee on Human Resource Development (2020) observed that living conditions in juvenile homes are inadequate.  Unsatisfactory living conditions are caused by: (i) inadequate space, (ii) poor quality of bathrooms, (iii) lack of recreational activities, and (iv) lack of trained staff.   
The Standing Committee on Women and Children (2022-23) recommended developing a mechanism for inter-ministerial coordination for effective child protection services.3  Additionally, it recommended coordination with the Ministry of Skill Development and Ministry of Education to develop skill development and vocational training programmes for the integration of the concerned children to mainstream society. Further, the Committee recommended that the Ministry must ensure timely releases of funds to states/UTs under the scheme.  

## Mission Shakti

Mission Shakti is an umbrella scheme for the safety and security and empowerment of women.25  The scheme has two sub-schemes, namely Sambal and Samarthya. Sambal is for the safety and security of women and has components of One Stop Centre (OSC), Women Helpline, Beti Bachao Beti Padhao, and Nari Adalat. Samarthya concerns empowerment of women and has components, such as Pradhan Mantri Matru Vandana Yojana, Hub for Empowerment of Women, Shakti Sadan, and Sakhi Niwas.  The scheme has a total allocation of Rs 20,989 crore from 2021-22 to 2025-26. The central government has a share of Rs 15,761 crore.25  In 2023-24, Mission Shakti has been allocated Rs 3,144 crore.  

| Sub       | 2022-23    | 2023-24    |
|-----------|------------|------------|
| Schemes   |            |            |
| 2021-22   |            |            |
| Actuals   | RE         | BE         |
| % Change  |            |            |
| (BE 2023- |            |            |
| 24/ RE    |            |            |
| 2022-23)  |            |            |
| Sambal    | 183        | 333        |
| Samarthya | 1,729      | 1,947      |
| Total     | 1,912      | 2,280      |

Source:  Ministry of Women and Child Development Demand for Grants for 2023-24; PRS. 

In all years since 2016-17, funds allocated under Mission Shakti have been underutilised.  In 2021-22, the gap between the budgeted estimate and the actual expenditure under Mission Shakti was 36%.  Despite repeated underutilisation, there is a 38% increase in the budgeted estimates for 2023-24 as compared to revised estimates of 2022-23.  

## Underutilisation Of Funds Under Beti Bachao Beti Padhao

The Standing Committee on Empowerment of Women (2021) observed that the decline in Child Sex Ratio (CSR) since 1961 is a grave concern.26  CSR decreased from 976 in 1961 to 927 in 2011 and 919 in 2011.  
Decline in the sex ratio indicates women's disempowerment over a life-cycle continuum..26  A decline in CSR is also indicative of discrimination against women and girls in health, nutrition, and educational opportunities.26   
 
The Committee observed that since the inception of the scheme in 2014-15 till 2019-20, Rs 848 crore was allocated under the scheme.  Around Rs 622 crore was released to states in the time period.  However, it noted that only 25% of the funds had been spent by the states/UTs.  Further, the Committee noted that the Ministry had been releasing additional funds to the state even when they had not utilised existing funds.  The Committee recommended that the Ministry must have a target-oriented approach and states must use their funds in a time-bound manner.  

## Lack Of Diversification Of Funds Under Beti Bachao Beti Padhao

The Standing Committee on Empowerment of Women (2021) observed that between 2016-17 and 2018-19, about 79% of the budget (Rs 447 crore) had been used on media advocacy.26  The Committee recognised the importance of media advocacy as a vertical to spread the message of Beti Bacha Beti Padhao.  However, it stressed upon the importance of focusing on achieving measurable outcomes related to health and education under the scheme.  The Committee recommended that the Ministry reconsider spending on media advocacy under the scheme and focus on sectoral interventions in education and health.  Refer to Table 9 in the Annexure for details on funds released for media advocacy and multi-sectoral interventions from 2014-2023.  

## Inter-Ministerial Coordination For Timely Justice

From 2014 to 2019, the rate of crimes against children has increased (see Figure 8).27  Some of the categories of crime on the rise include murder with rape/gang rape, dowry deaths, and human trafficking.27,28  The Standing Committee on Education, Women, Children, Youth, and Sports (2021) noted that the number of crimes against women and children are increasing.14  It recommended the Ministry to work with the Ministry of Home Affairs and state governments to bring down crimes against women and children and ensure timely justice.  

## 

 
Source: Crime in India Report (2014-2020); National Crime Records Bureau; PRS. 

## Nirbhaya Fund

The Nirbhaya Fund was set up as a dedicated fund for the implementation of initiatives aimed at enhancing the security and safety of women.3  It is a non-lapsable fund that lies with the Ministry of Finance.  The Ministry of Women and Child Development is the nodal ministry to appraise schemes under the fund and review the progress of sanctioned schemes.  The allocation for 2023-24 is Rs 20 crore under the Mission for Protection and Empowerment of Women.    

## Underutilisation Of The Nirbhaya Fund

The projects/schemes under the Nirbhaya Fund are demand driven.29  According to the Ministry, projects appraised under the framework of the Nirbhaya Fund have a staggered implementation schedule.  While most of the projects are implemented through state/UTs; some projects are implemented by central ministries/departments.  For instance, states/UTs, such as Bihar, Andhra Pradesh, Lakshadweep, and Madhya Pradesh underutilised more than 50% of funds allocated/released between 2016-17 and 2020-21.30 The Standing Committee on Education, Women, Children, Youth and Sports (2019) noted that the pace of projects funded under the Nirbhaya Projects are lethargic and need to be fast-paced.29  In addition, the Standing Committee on Education, Women, Children, Youth and Sports (2022) highlighted the need for effective utilisation of the Nirbhaya Fund.3  It noted that violence against women has not reduced and the outbreak of the COVID-19 pandemic had worsened the situation of women.  The Committee observed that Rs 9,177 crore has been appraised under the fund for 35 projects.3  Out of which, only 33% (Rs 2,989 crore) had been utilised.  The Committee has recommended identifying reasons for underutilisation of the fund

## 

 
https://wcd.nic.in/sites/default/files/Final%20Saksham%20Guidelines %20with%20covering%20letter%20%281%29.pdf. 6 Unstarred Question No. 135, Lok Sabha, Ministry of Women and Child Development, February 10, 2023, https://loksabha.nic.in/Questions/QResult15.aspx?qref=47137&lsno= 17.  
7 Audit Report on General, Social, and Economic Sectors and PSUs for the year ended 31 March 2019, Comptroller and Auditor General of India, 2019, https://cag.gov.in/uploads/download_audit_report/2019/5_Chapter-1- Overview-06103f185910f48.91538073.pdf. 8 Unstarred Question No. 942, Rajya Sabha, Ministry of Women and Child Development, December 14, 2022, https://pqars.nic.in/annex/258/AU942.pdf. 9 Report No. 346: Action Taken by the Government on the Recommendations/Observations contained in the 346th Report on the Demands for Grants 2022-23 of the Ministry of Women and Child Development, Standing Committee on Education, Women, Children, Youth and Sports, March 16, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Repo rtFile/16/167/346_2022_12_15.pdf. 10 Unstarred Question No. 3992, Rajya Sabha, Ministry of Women and Child Development, April 06, 2022, https://pqars.nic.in/annex/256/AU3992.pdf. 11 Revised Rates of Anganwadi Workers (AWWs)/ Anganwadi Helper (AWHs), Ministry of Women and Child Development, September 20, 2018, https://wcd.nic.in/sites/default/files/Revised%20rates%20of%20Hono rarium_0.pdf. 12 Unstarred Question No. 53, Lok Sabha, Ministry of Women and Child Development, December 09, 2022, https://pqals.nic.in/annex/1710/AS53.pdf. 13 Unstarred Question No. 3184, Rajya Sabha, Ministry of Women and Child Development, March 30, 2022, https://pqars.nic.in/annex/256/AU3184.pdf. 14 Report No. 326: Demands for Grants 2021-22 of the Ministry of Women and Child Development, Standing Committee on Education, Women, Children, Youth and Sports, March 16, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Repo rtFile/16/144/326_2021_7_15.pdf. 15 Report No. 304: Demands for Grants 2018-19 (Demand No. 98) of the Ministry of Women and Child Development, Standing Committee on Human Resource Development, March 9, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Repo rtFile/16/98/304_2018_9_15.pdf. 16 "Umbrella Schemes of Ministry of Women & Child Development: Mission POSHAN 2.0, Mission Shakti and Mission Vatsalya", Press Information Bureau, Ministry of Women and Child Development, February 2, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1794595. 17 Unstarred Question No. 1749, Rajya Sabha, Ministry of Women and Child Development, March 16, 2022, 
 
 
https://pqars.nic.in/annex/256/AU1749.pdf. 18 "Preserving Progress on Nutrition in India: POSHAN Abhiyaan in Pandemic Times", NITI Aayog, July 2021, https://www.niti.gov.in/sites/default/files/2022-09/Poshan-Abhiyaan- Monitoring.pdf. 19 Unstarred Question No. 1462, Lok Sabha, Ministry of Women and Child Development, February 10, 2023, https://pqals.nic.in/annex/1711/AU1462.pdf. 20 Key Indicators: 22 States/UT Phase-I, National Family Health Survey (NFHS-5), 2019-20, India Report, Ministry of Health and Family Welfare, March 2022, https://main.mohfw.gov.in/sites/default/files/NFHS-5_Phase-I.pdf. 21 National Family Health Survey (NFHS-5), 2019-21, India Report, Ministry of Health and Family Welfare, http://rchiips.org/nfhs/NFHS- 5Reports/NFHS-5_INDIA_REPORT.pdf. 22 Guidelines for Mission Vatsalya, Ministry of Women and Child Development, July 05, 2022, https://wcd.nic.in/sites/default/files/GUIDELINES%20OF%20MISSI ON%20VATSALYA%20DATED%2005%20JULY%202022.pdf. 23 Unstarred Question No. 117, Rajya Sabha, Ministry of Women and Child Development, July 27, 2022, https://pqars.nic.in/annex/257/AS117.pdf. 24 Section 106, The Juvenile Justice (Care and Protection of Children) Act, 2015, https://pqars.nic.in/annex/257/AS117.pdf. 25 Unstarred Question No. 1488, Lok Sabha, Ministry of Women and Child Development, February 10, 2023, https://pqals.nic.in/annex/1711/AU1488.pdf. 26 Report No. 5: Empowerment of Women through Education with Special Reference to Beti Bachao-Beti Padhao Scheme, Standing Committee on Empowerment of Women, December 09, 2021, https://loksabhadocs.nic.in/lsscommittee/Empowerment%20of%20W omen/17_Empowerment_of_Women_5.pdf. 27  Crime in India 2021 Statistics Volume I, National Crime Records Bureau, Ministry of Home Affairs, 2022, https://ncrb.gov.in/sites/default/files/CII- 2021/CII_2021Volume%201.pdf. 28 Crime in India 2020  Statistics Volume I, National Crime Records Bureau, Ministry of Home Affairs, 2021, https://ncrb.gov.in/sites/default/files/CII%202020%20Volume%201.p df. 29 Report No. 334, 'Actions Taken by the Government on Recommendations Contained in its Three Hundred and Sixteenth Report on Issues Related to Safety of Women", Standing Committee on Education, Women, Children, Youth and Sports, February 04, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Repo rtFile/16/162/334_2022_2_17.pdf. 30 Unstarred Question No. 3233, Lok Sabha, Ministry of Women and Child Development, August 08, 2022, https://pqals.nic.in/annex/179/AU3233.pdf. 

## Annexure: Women And Child Development

| Schemes as on April 1, 2021                    | Schemes after Revamping/Rationalisation    |
|------------------------------------------------|--------------------------------------------|
|                                                |                                            |
| Umbrella Scheme                                | Schemes                                    |
| Umbrella ICDS                                  | Pradhan Mantri Matru Vandana Yojana        |
| Mission for Protection and                     |                                            |
| Empowerment for Women                          |                                            |
| One Stop Center                                |                                            |
| Beti Bachao Beti Padhao                        |                                            |
| Working Women Hostel                           |                                            |
| Information and Mass Communication             |                                            |
| Mahila Shakti Kendra                           |                                            |
| Other Schemes Funded from Nirbhaya Fund        |                                            |
| Swadhar Greh                                   |                                            |
| Ujjawala                                       |                                            |
| Women Helpline                                 |                                            |
| Gender Budgeting and Research, Publication and |                                            |
| Monitoring                                     |                                            |
| Home for Widows                                |                                            |
| Mahila Police Volunteers                       |                                            |
| Support to Training and Employment Program     |                                            |
| (STEP)                                         |                                            |
| Umbrella ICDS                                  | Child Protection Services                  |
| Umbrella ICDS                                  | Anganwadi Services (Erstwhile Core ICDS)   |
| Anganwadi and                                  |                                            |
| POSHAN 2.0                                     |                                            |
| National Nutrition Mission (including ISSNIP)  |                                            |
| Scheme for Adolescent Girls                    |                                            |
| National Creche Scheme                         |                                            |

Note: ICDS- Integrated Child Development Services. 

Source: Revamping/Rationalisation of Centrally Sponsored Scheme, Expenditure Profile, 2022-2023, Statement 4AA, Union Budget 2022-
23; PRS. 

 
2020-21) 

State/UT 
% Utilisation funds as on March 31, 2021 
State/UT 
% Utilisation funds as 
on March 31, 2021 
Andaman and Nicobar Islands 
45% 
Lakshadweep 
67% 
Andhra Pradesh 
65% 
Madhya Pradesh 
47% 
Arunachal Pradesh 
25% 
Maharashtra 
69% 
Assam 
55% 
Manipur 
49% 
Bihar 
56% 
Meghalaya 
98% 
Chandigarh 
47% 
Mizoram 
94% 
Chhattisgarh 
54% 
Nagaland 
98% 
Dadra and Nagar Haveli and Daman and Diu 
47% 
Odisha 
46% 
Delhi 
73% 
Puducherry 
28% 
Goa 
49% 
Punjab 
34% 
Gujarat 
73% 
Rajasthan 
43% 
Haryana 
64% 
Sikkim 
93% 
Himachal Pradesh 
64% 
Tamil Nadu 
75% 
Jammu and Kashmir 
86% 
Telangana 
83% 
Jharkhand 
64% 
Tripura 
76% 
Karnataka 
78% 
Uttarakhand 
58% 
Kerala 
61% 
Uttar Pradesh 
34% 
Ladakh 
31% 
West Bengal 
0% 

Source: Unstarred Question No. 3102, Lok Sabha, Ministry of Women and Child Development, August 8, 2021; PRS.  

## (In Rs Crore)

| Financial Year           |   Total Expenditure   |   Funds for media advocacy  |
|--------------------------|-----------------------|-----------------------------|
| Funds for multi-sectoral |                       |                             |
| intervention**           |                       |                             |
| 2014-15                  |                   35  |                         21  |
| 2015-16                  |                   59  |                         21  |
| 2016-17                  |                   29  |                         26  |
| 2017-18                  |                  169  |                        136  |
| 2018-19                  |                  245  |                        164  |
| 2019-20                  |                   86  |                         26  |
| 2020-21                  |                   61  |                          7  |
| Total                    |                  683  |                        401  |

Note: * Expenditure made under the scheme by the Ministry of Women and Child Department. ** During 2014-15 and 2015-16, funds released for multi-sectoral intervention were released to states for state-level activity and districtlevel activity.  Since the revision of guidelines, in 2017-18, funds have been released directly to districts for district-level activities.  The provisions for state-level activity were removed. Source: Starred Question No. 1, Rajya Sabha, Ministry of Women and Child Development, February 02, 2022; PRS.  
 

AWCs without a 
State/UT 
Operational AWCs 
AWCs without a 
pucca building 
toilet (in %) 
(in %) 
AWCs without a 
drinking water 
facility (in %) 
Andaman and Nicobar Islands 
719 
9% 
0% 
6% 
Andhra Pradesh 
55,607 
0% 
0% 
26% 
Arunachal Pradesh* 
6,225 
100% 
0% 
93% 
Assam 
61,715 
0% 
32% 
37% 
Bihar 
1,12,094 
25% 
0% 
0% 
Chandigarh 
450 
0% 
0% 
0% 
Chhattisgarh 
51,586 
12% 
7% 
8% 
Dadra and Nagar Haveli and Daman and Diu 
405 
13% 
0% 
0% 
Delhi 
10,755 
0% 
0% 
0% 
Goa 
1,262 
0% 
0% 
0% 
Gujarat 
53,029 
0% 
4% 
3% 
Haryana 
25,962 
0% 
1% 
10% 
Himachal Pradesh 
18,925 
9% 
0% 
1% 
Jammu and Kashmir 
28,078 
21% 
10% 
16% 
Jharkhand 
38,432 
18% 
29% 
34% 
Karnataka 
65,911 
14% 
18% 
21% 
Kerala 
33,115 
0% 
12% 
1% 
Ladakh* 
1,140 
58% 
34% 
4% 
Lakshadweep* 
71 
0% 
0% 
0% 
Madhya Pradesh 
97,135 
5% 
5% 
3% 
Maharashtra* 
1,09,832 
9% 
25% 
49% 
Manipur 
11,510 
87% 
46% 
56% 
Meghalaya 
5,896 
3% 
37% 
5% 
Mizoram 
2,244 
0% 
8% 
8% 
Nagaland* 
3,980 
93% 
13% 
58% 
Odisha 
73,172 
0% 
0% 
55% 
Puducherry 
855 
0% 
8% 
9% 
Punjab 
27,304 
0% 
0% 
9% 
Rajasthan* 
61,625 
0% 
21% 
47% 
Sikkim 
1,308 
0% 
0% 
0% 
Tamil Nadu 
54,439 
20% 
22% 
15% 
Telangana 
35,580 
17% 
5% 
51% 
Tripura 
9,911 
0% 
8% 
17% 
Uttar Pradesh* 
1,89,309 
0% 
3% 
7% 
Uttarakhand* 
20,048 
0% 
17% 
18% 
West Bengal 
1,19,481 
18% 
26% 
17% 
Total 
13,89,110 
10% 
12% 
21% 

Note: *Data has been taken for Monthly Progress Report, June 2021 as Annual State Programme Implementation Plan data is not available. Source: Starred Question No: 298, Rajya Saba, Ministry of Women and Child Development, March 30, 2022; PRS.  
 

Children under 5 
Children under 5 
Children under 5 years who are 
  
years who are 
years who are wasted 
underweight 
stunted 
States/UTs 
NFHS-5 
NFHS-4 
NFHS-5 
NFHS-4 
NFHS-5 
NFHS-4 
Andaman & Nicobar Island 
22.5 
23.3 
16.0 
18.9 
23.7 
21.6 
Andhra Pradesh 
31.2 
31.4 
16.1 
17.2 
29.6 
31.9 
Arunachal Pradesh 
28.0 
29.4 
13.1 
17.3 
15.4 
19.5 
Assam 
35.3 
36.4 
21.7 
17 
32.8 
29.8 
Bihar 
42.9 
48.3 
22.9 
20.8 
41.0 
43.9 
Chandigarh 
25.3 
28.7 
8.4 
10.9 
20.6 
24.5 
Chhattisgarh 
34.6 
37.6 
18.9 
23.1 
31.3 
37.7 
Dadra & Nagar Haveli and Daman and Diu** 
39.4 
41.7 
21.6 
26.7 
38.7 
38.9 
Delhi 
30.9 
32.3 
11.2 
24.1 
21.8 
27.0 
Goa 
25.8 
20.1 
19.1 
21.9 
24.0 
23.8 
Gujarat 
39.0 
38.5 
25.1 
26.4 
39.7 
39.3 
Haryana 
27.5 
34.0 
11.5 
21.2 
21.5 
29.4 
Himachal Pradesh 
30.8 
26.3 
17.4 
13.7 
25.5 
21.2 
Jammu & Kashmir* 
26.9 
27.4 
19.0 
12.2 
21.0 
16.6 
Jharkhand 
39.6 
45.3 
22.4 
29.0 
39.4 
47.8 
Karnataka 
35.4 
36.2 
19.5 
26.1 
32.9 
35.2 
Kerala 
23.4 
19.7 
15.8 
15.7 
19.7 
16.1 
Ladakh* 
30.5 
30.9 
17.5 
9.3 
20.4 
18.7 
Lakshadweep 
32.0 
27.0 
17.4 
13.7 
25.8 
23.4 
Madhya Pradesh 
35.7 
42.0 
18.9 
25.8 
33.0 
42.8 
Maharashtra 
35.2 
34.4 
25.6 
25.6 
36.1 
36.0 
Manipur 
23.4 
28.9 
9.9 
6.8 
13.3 
13.8 
Meghalaya 
46.5 
43.8 
12.1 
15.3 
26.6 
29.0 
Mizoram 
28.9 
28.1 
9.8 
6.1 
12.7 
12.0 
Nagaland 
32.7 
28.6 
19.1 
11.3 
26.9 
16.7 
Odisha 
31.0 
34.1 
18.1 
20.4 
29.7 
34.4 
Puducherry 
20.0 
23.7 
12.4 
23.6 
15.3 
22.0 
Punjab 
24.5 
25.7 
10.6 
15.6 
16.9 
21.6 
Rajasthan 
31.8 
39.1 
16.8 
23 
27.6 
36.7 
Sikkim 
22.3 
29.6 
13.7 
14.2 
13.1 
14.2 
Tamil Nadu 
25.0 
27.1 
14.6 
19.7 
22.0 
23.8 
Telangana 
33.1 
28.0 
21.7 
18.1 
31.8 
28.4 
Tripura 
32.3 
24.3 
18.2 
16.8 
25.6 
24.1 
Uttar Pradesh 
39.7 
46.3 
17.3 
17.9 
32.1 
39.5 
Uttarakhand 
27.0 
33.5 
13.2 
19.5 
21.0 
26.6 
West Bengal 
33.8 
32.5 
20.3 
20.3 
32.2 
31.5 

Note: * Numbers for NFHS-4 for Dadra and Nagar Haveli and Daman & Diu, Jammu and Kashmir, and Ladakh have been taken from their respected NFHS-5 (2019-21) Union Territory Fact Sheet.  Facts sheets for all three UTs are available at a district-level. Source: National Family Health Survey-4 (2015-16), National Family Health Survey-5 (2019-21); PRS.   

 
NFHS-5 (2019-21) 
NFHS-4 (2015-16) 
States/UTs 
Urban 
Rural 
Total 
Total 
Andaman and Nicobar Islands 
57.2 
57.6 
57.5 
65.8 
Andhra Pradesh 
57.8 
59.3 
58.8 
60.0 
Arunachal Pradesh 
36.5 
41.0 
40.3 
43.2 
Assam 
65.2 
66.0 
65.9 
46.0 
Bihar 
65.6 
63.1 
63.5 
60.3 
Chandigarh 
60.3 
64.0* 
60.3 
75.9 
Chhattisgarh 
56.5 
62.2 
60.8 
47.0 
Dadra and Nagar Haveli and Daman and Diu 
60.5 
64.4 
62.5 
72.9 
Delhi 
49.7 
58.6 
49.9 
54.3 
Goa 
40.0 
37.4 
39.0 
31.3 
Gujarat 
61.3 
67.6 
65.0 
54.9 
Haryana 
57.4 
61.9 
60.4 
62.7 
Himachal Pradesh 
51.0 
53.3 
53.0 
53.5 
Jammu and Kashmir 
61.4 
67.5 
65.9 
48.9 
Jharkhand 
61.1 
66.7 
65.3 
65.2 
Karnataka 
43.9 
50.3 
47.8 
44.8 
Kerala 
37.0 
35.8 
36.3 
34.3 
Ladakh 
89.5 
93.5 
92.8 
78.4 
Lakshadweep 
26.4 
23.7 
25.8 
46.0 
Madhya Pradesh 
51.5 
55.8 
54.7 
52.5 
Maharashtra 
52.0 
56.1 
54.2 
48.0 
Manipur 
30.5 
28.8 
29.4 
26.4 
Meghalaya 
51.8 
54.3 
53.8 
56.2 
Mizoram 
30.8 
39.9 
34.8 
24.8 
Nagaland 
27.3 
29.8 
28.9 
27.9 
Odisha 
61.5 
64.9 
64.3 
51.0 
Puducherry 
52.3 
61.4 
55.1 
52.4 
Punjab 
59.0 
58.5 
58.7 
53.5 
Rajasthan 
49.9 
55.7 
54.4 
46.8 
Sikkim 
42.4 
41.9 
42.1 
34.9 
Tamil Nadu 
51.3 
55.3 
53.4 
55.0 
Telangana 
55.2 
58.9 
57.6 
56.6 
Tripura 
66.1 
67.6 
67.2 
54.5 
Uttar Pradesh 
50.1 
50.5 
50.4 
52.4 
Uttarakhand 
45.8 
41.1 
42.6 
45.2 
West Bengal 
65.1 
74.4 
71.4 
62.5 

Source: National Family Health Survey-5 (2019-21); PRS.   
 

|                                          |       |       | NFHS-5 (2019-21)    | NFHS-4 (2015-16)    |
|------------------------------------------|-------|-------|---------------------|---------------------|
| States                                   | Urban | Rural | Total               | Total               |
| Andaman and Nicobar Islands              | 47.8  | 33.3  | 40.0                | 49.0                |
| Andhra Pradesh                           | 58.7  | 65.0  | 63.2                | 58.6                |
| Arunachal Pradesh                        | 52.8  | 57.1  | 56.6                | 54.2                |
| Assam                                    | 66.4  | 68.6  | 68.4                | 35.7                |
| Bihar                                    | 67.9  | 69.7  | 69.4                | 63.5                |
| Chandigarh                               | 55.0  | *     | 54.6                | 73.1                |
| Chhattisgarh                             | 71.1  | 66.2  | 67.2                | 41.6                |
| Dadra and Nagar Haveli and Daman and Diu | 75.0  | 76.8  | 75.8                | 82.0                |
| Delhi                                    | 68.7  | 81.7  | 69.2                | 59.7                |
| Goa                                      | 53.3  | 53.1  | 53.2                | 48.3                |
| Gujarat                                  | 77.6  | 81.2  | 79.7                | 62.6                |
| Haryana                                  | 68.1  | 71.5  | 70.4                | 71.7                |
| Himachal Pradesh                         | 58.2  | 55.0  | 55.4                | 53.7                |
| Jammu and Kashmir                        | 70.1  | 73.5  | 72.7                | 53.8                |
| Jharkhand                                | 65.5  | 67.9  | 67.5                | 69.9                |
| Karnataka                                | 62.8  | 67.1  | 65.5                | 60.9                |
| Kerala                                   | 38.9  | 39.8  | 39.4                | 35.7                |
| Ladakh                                   | 84.1  | 95.1  | 92.5                | 91.4                |
| Lakshadweep                              | 45.5  | 36.1  | 43.1                | 53.6                |
| Madhya Pradesh                           | 72.5  | 72.7  | 72.7                | 68.9                |
| Maharashtra                              | 66.3  | 70.7  | 68.9                | 53.8                |
| Manipur                                  | 44.0  | 42.2  | 42.8                | 23.9                |
| Meghalaya                                | 38.8  | 46.0  | 45.1                | 48.0                |
| Mizoram                                  | 42.8  | 49.6  | 46.4                | 19.3                |
| Nagaland                                 | 46.4  | 41.4  | 42.7                | 26.4                |
| Odisha                                   | 56.2  | 65.6  | 64.2                | 44.6                |
| Puducherry                               | 65.3  | 60.8  | 64.0                | 44.9                |
| Punjab                                   | 71.0  | 71.1  | 71.1                | 56.6                |
| Rajasthan                                | 68.3  | 72.4  | 71.5                | 60.3                |
| Sikkim                                   | 54.8  | 57.1  | 56.4                | 55.1                |
| Tamil Nadu                               | 53.7  | 60.4  | 57.4                | 50.7                |
| Telangana                                | 64.7  | 72.8  | 70.0                | 60.7                |
| Tripura                                  | 57.3  | 66.5  | 64.3                | 48.3                |
| Uttar Pradesh                            | 65.3  | 66.7  | 66.4                | 63.2                |
| Uttarakhand                              | 63.8  | 56.6  | 58.8                | 59.8                |
| West Bengal                              | 63.0  | 71.3  | 69.0                | 54.2                |

Note: * Percentage not shown; based on fewer than 25 unweighted cases. Source: National Family Health Survey-5 (2019-21); PRS.

## Demand For Grants 2023-24 Analysis Environment, Forests And Climate Change

The Ministry of Environment, Forests and Climate Change is responsible for the planning, promotion, co-ordination of, and overseeing the implementation of India's environmental and forestry policies and programs. One of the key environmental issues faced by countries including India is climate change.  In its effort to combat climate change, India has updated its Nationally Determined Contribution (NDC) in line with the targets set at COP26 to transition to renewable energy sources.  While India sets such targets, one of the issues is availability of adequate finance.  Domestic sources of finance may not be enough to meet such targets and there is need to explore other sources of finance.  Further, since climate change is a cross cutting issue across sectors, there may be a need to formulate mechanisms that enable coordination among various entities.  Other issues that the Ministry faces include pollution in cities, decline in forest cover in some states, and density of forest cover. In this backdrop, this note looks at the 2023-24 budgetary allocation of the Ministry, its finances over the years, and key policy issues.       

## Budget Speech 2023-24 Highlights1

- 
A Green Credit Programme will be notified under the Environment (Protection) Act, 1986 to incentivise environmentally sustainable and responsive actions by companies, individuals, and local bodies.  Further, it will also mobilise additional resources for such actions.   
- 
Mangrove Initiative for Shoreline Habitats and Tangible Incomes (MISHTI) will be launched for mangrove plantation along the coastline and on salt 
pan lands.    

## Overview Of Finances

In 2023-24, the Ministry of Environment, Forests and Climate Change has been allocated Rs 3,079 crore, a 24% increase over the revised estimates of 2022-23.  This comprises of Rs 2,934 crore for revenue expenditure (95%) and Rs 145 crore for capital expenditure (5%).  At the 2022-23 revised stage, capital expenditure was estimated at Rs 73 crore, a 37% decrease over the budget estimates. In 2023-24, allocation towards capital expenditure has doubled as compared to 2022-23 revised estimates.  This is mainly due to an increase of Rs 45 crore for capital expenditure for Botanical Survey of India.     

% 
 
21-22 
Actuals 
22-23 
BE 
22-23 
RE 
23-24 
BE 
change 
from 22-
23 RE to 
23-24 
BE 
Revenue 
2,402 
2,915 
2,405 
2,934 
22% 
Capital 
30 
115 
73 
145 
100% 
Total 
2,433 
3,030 
2,478 
3,079 
24% 

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand for Grants 2023-24, Demand No. 28, Ministry of Environment, Forests and Climate Change; PRS.   

21-22 Actuals 
22-23 RE 
23-24 BE 
% change (RE to BE) 
524 
641 
903 
41% 
Establishment Expenditure of the Centre 
657 
549 
759 
38% 
Environment, Forestry and Wildlife Pollution Control  
407 
600 
756 
26% 
315 
308 
309 
0% 
Autonomous Bodies 
172 
151 
159 
6% 
Statutory and Regulatory Bodies 
115 
87 
93 
7% 
Environmental Knowledge and Capacity Building 
28 
4 
13 
213% 
National Coastal Mission 
 
Others 
215 
139 
87 
Total 
2,433 
2,478 
3,079 
24% 

Note: BE- Budget Estimates; RE- Revised Estimates; Environment, Forestry and Wildlife includes National Mission for a Green India; Autonomous Bodies include Indian Council of Forestry Research and Education and Wildlife Institute of India; Statutory and Regulatory Bodies include Central Pollution Control Board, Commission for Air Quality Management; Others include Environment Education, Awareness, Research and Skill Development. Sources: Demand for Grants 2023-24, Demand No. 28, Ministry of Environment, Forests and Climate Change; PRS. 

Key budgetary allocation of the Ministry in 2023- 24 include: (i) Establishment Expenditure of the Centre (29%) which includes expenditure towards National Green Tribunal, Botanical Survey of India, and Forest Survey of India, (ii) Environment, Forestry and Wildlife (25%) that includes Green India Mission, and Project Tiger, and (iii) 25% towards Pollution Control. Over the last 10 years, allocation to the Ministry has seen a compounded annual growth rate of 5%. In 2020-21, the Ministry saw a decline of 22% in allocation over the last year.  This may be due to reprioritisation of other sectors due to COVID-19.  
Note: Figures for 2022-23 and 2023-24 are Revised Estimates and Budget Estimates respectively. Sources: Demand for Grants (2012-13 to 2023-24), Ministry of Environment, Forests and Climate Change; PRS. 

## Underutilisation Of Funds

Over the years (barring a few), the Ministry has not been able to utilise the funds allocated to it (See Figure 2).  In the past, reasons cited by the Ministry (2016) for underutilisation of funds are administrative and procedural delays.2  The Standing Committee on Science and Technology, Environment and Forests (2016) noted that this shows lack of planning and foresightedness on part of the Ministry.2  Such underutilisation of funds may also affect progress of schemes and programs. 

## Issues To Consider Financing Climate Change Efforts

Climate change presents multiple challenges to countries across the globe including India.  It refers to a change of climate which is attributed directly or indirectly to human activities that alter the composition of the global atmosphere.3  In August 2021, the Intergovernmental Panel on Climate Change (IPCC) estimated that a 1.5°C increase in temperature as compared to pre-industrial levels (1850-1900) may happen by 2040.4  This could lead to a reduction of the snow cover, increase in heat waves, extreme precipitation, intensification of tropical cyclones, and increase in sea levels. India has set certain targets relating to energy transition and achieving net zero emissions.  For instance, at COP26 in November 2021, India set a target for achieving net zero emissions by 2070, and increasing the share of renewable energy in India's energy mix to 50% by 2030.5 As per Central Electricity Authority, India will target to add a total of 472 GW of installed capacity during 2022-32.6  Almost 80% of this would be from two sources - solar (279 GW) and wind (94 
GW).  These targets are aligned with India's pledge at COP26 to have 500 GW of non-fossil generation capacity by 2030.  These will require investments of about Rs 32 lakh crore.  
Authority Sources: Central Electricity Authority; PRS. 

Electricity Authority. Sources: Central Electricity Authority; PRS. 

Exploring various sources of finances According to the Ministry of Finance (2020), the overall cost required for India to adapt to climate change by 2030 is expected to be around Rs 86 lakh crore (at 2012 base price).7  Currently, there is a huge gap between the required and actual investment for renewable energy capacity addition.8  Against the required annual investment of Rs 1.5-2 lakh crore, the actual annual investment in the last few years was Rs 75,000 crore. Currently India is relying on domestic sources to implement adaptation and mitigation action for climate change.9  Investments in the sector have been affected as the banking sector has a reluctant attitude towards financing renewable energy projects.8  This may happen in projects like solar rooftop schemes which is for small consumers and also banks do not have adequate information about such schemes.  Further, lending capacity of public sector institutions in the sector has been low due to low capital base.  Some suggestions to increase financing has been exploring the possibility of prescribing banks and financial institutions to invest a certain percentage of their investments in renewable energy through a Renewable Finance Obligation (similar to a Renewable Purchase Obligation).8  Renewable Purchase Obligation requires electricity distribution companies to purchase a minimum proportion of electricity from renewable sources. Need of financing from developed nations has also been emphasised by several expert bodies and international forums.10  The Glasgow Conference Pact at COP26 (2021) noted that developed countries failed to meet their commitment of providing USD 100 billion (over Rs 7.5 lakh crore) per year by 2020 to developing nations to tackle climate change.  At COP27, India submitted its Long-Term Low Emission Development Strategy to the United Nations Framework Convention on Climate Change (UNFCCC).11,12  Under the Strategy, India noted that provision of climate finance by developed countries will play a significant role in helping developing nations tackle climate change.  Such funds need to come in the form of grants and concessional loans.  Expert bodies have also suggested exploring other sources 
 
of finance such as green bonds.13  Several countries such as UK, France, Germany, USA, and China have resorted to green bonds to raise funds.     
In November 2022, the Ministry of Finance issued the framework for sovereign green bonds.14  Green bonds are used to raise funds for investment in environmentally sustainable and climate-suitable projects.15  The proceeds raised from issuing green bonds will be used to finance/refinance expenditure for eligible green projects.  Eligible category of projects includes renewable energy (solar/wind/biomass/hydropower), clean transportation, climate change adaptation, and pollution prevention and control. According to the Ministry of Finance (2023) sovereign green bonds worth Rs 8,000 crore have been raised in the first tranche under the framework.16  Further, bonds worth Rs 16,000 crore have been proposed to be issued in 2023-24 for green infrastructure projects.  RBI (2021) had noted some concerns with green bonds in India.17 Despite being relatively secured; green bonds have high cost which may be due to factors like higher risk perception and lack of data and information related to green bonds in India.  These concerns may be addressed with the framework for sovereign green issued by the Ministry of Finance.   

## The Energy Conservation (Amendment) Bill, 2022

The Energy Conservation (Amendment) Bill, 2022 was 
passed by Parliament on December 12, 2022.18  The Bill 
amends the Energy Conservation Act, 2001 to introduce 
concepts such as mandated use of non-fossil sources 
and carbon credit trading to ensure faster 
decarbonisation of the Indian economy.19  The Bill 
empowers the central government to specify a carbon 
credit trading scheme.  Carbon credit implies a tradeable 
permit to produce a specified amount of carbon dioxide 
or other greenhouse emissions.  The central government 
or any authorised agency may issue carbon credit 
certificates to entities registered and compliant with the 
scheme.  The entities will be entitled to trade the 
certificates.  Any other person may also purchase a 
carbon credit certificate on a voluntary basis. 

## Ensuring A Just Transition

India's climate change commitments require it to transition from fossil fuels to renewable energy sources.  In light of such commitments, the principle of 'just transition' has been emphasised upon by various international commitments.  At COP27, countries noted that climate action should be implemented in a manner that is just and inclusive and minimises social and economic impacts.10  The International Labour Organisation defines a just transition as a transition that involves maximising social and economic opportunities of climate action, while minimising and managing challenges that arise.20   
India's Nationally Determined Contribution includes increase cumulative electric power installed capacity from non-fossil sources to 50% by 2030.21  However, India has a large fleet of coal power plants that provide cheap electricity as compared to renewable sources.22  As India transitions towards renewable energy sources of energy, coal will be phased out.  Phasing out existing coal capacity may have some challenges. Decommissioning coal plants may have some consequences such as job losses and environmental harms such as emissions from demolition, discharge of waste (metal scrap, oil sludge etc).23 In July 2021, Central Pollution Control Board released draft Guidelines for decommissioning coal plants.24  These Guidelines seek to address such issues by requiring coal companies to undertake an Environmental Impact Assessment before decommissioning and clean up the site after decommissioning.  Further, companies should dismantle the plant to the extent that it can be repurposed for some other use.                     

## Fragmented Environment Regulation

Apart from availability of adequate financing another issue is the presence of a regulatory framework that enables a smooth transition. Currently, environment regulation in India is fragmented and there is lack of a unified authority for coordination among different sectors.25 Environment regulation in India is broadly covered by six key laws which includes Environment 
(Protection) Act, 1986, Indian Forest Act, 1927, and Water (Prevention and Control of Pollution) Act, 1974.26,27,28  The Environment (Protection) Act, 1986 broadly regulates all issues related to environment conservation.  In 2014, a High-Level Committee (Chair: Mr. TSR Subramanian) recommended introducing the Environment Law (Management) Act providing for National and State Environmental Management Authority to evaluate project clearance, using technology and expertise, in a time bound manner.29  The Central and State Pollution Control Boards would be subsumed under these Authorities. NITI Aayog (2015) noted that one of the key problems in the development of renewable energy in India is the lack of a comprehensive national framework for renewable energy in either legislation or policy.30  It recommended creating a national framework.  The framework should include a mechanism to measure progress on targets.  Further, it recommended that the framework should have a sunset provision that would allow regular opportunity to update the framework due to evolving issues related to renewable energy. 

## Uk'S Climate Change Committee

UK's Climate Change Committee is an independent, statutory 
body established under the Climate Change Act, 2008.31  Key 
functions of the Committee include: (i) reporting to the 
Parliament on progress made under reducing greenhouse 
gas emissions, (ii) conducting independent research into 
climate change, and (iii) providing advice for setting budgets 
to mitigate impacts of climate change.  The government and 
national authorities may request for specific advice from the 
Committee on ad-hoc basis.     

Apart from the current framework being 
fragmented, there have been issues related to weak 
implementation of various existing Acts and Rules.  
For instance, the Comptroller and Auditor General 
of India (CAG) (2016) noted some issues with 
carrying out the Environment Impact Assessment 
(EIA).  EIA is a planning tool to integrate 
environmental concerns into development related 
projects from the initial stage of planning.32  The 
CAG (2016) observed that there are delays in the 
process of Environment Clerance (including 
holding public consultations and granting of 
Environment Clearance by the Ministry).33     

## National Action Plan On Climate Change

The National Action Plan on Climate Change (NAPCP) was 
launched in June 2008 to deal with issues related to climate 
change.  The NAPCP has eight missions: (i) the National 
Solar Mission, (ii) National Mission on Enhanced Energy 
Efficiency, (iii) National Water Mission, (iv) the National 
Mission for Green India, (v) National Mission on Sustainable 
Habitat, (vi) National Mission for Sustainable Agriculture, 
(vii) National Mission for Sustaining the Himalayan 
Ecosystem, and (viii) National Mission on Strategic 
Knowledge for Climate Change. 
NITI Aayog in its report on Strategy for New India (2018) 
recommended that all eight national missions under the 
NAPCP should be revised in light of new scientific 
information and technological advances.34  Further, new 
national missions on wind energy, waste-to-energy, and 
coastal areas should be developed. 

## Forest Cover

National Mission for a Green India is one of the eight Missions under the NAPCP.35  It seeks to protect, restore, and enhance India's forest cover.  
In 2023-24, the Mission has been allocated Rs 220 crore, an increase of 3% over 2022-23 revised estimates.  The Mission has seen a 41% reduction in allocation at the 2022-23 revised stage (Rs 214 crore) as compared to the budget estimates (Rs 362 crore).  Under the Mission, funds are released to states and these funds have not been utilised by states (See Figure 5).  See Table 10 in the Annexure for state wise details on fund utilisation.   
Sources: Unstarred Question No. 5206, Lok Sabha, Ministry of Environment, Forest and Climate Change, April 4, 2022; PRS. 

Allocation for Green India Mission: The Standing Committee on Science and Technology, Environment and Forests (2022) noted a vast difference between the budgetary allocation demanded by the Ministry and the amount allocated in 2022-23.36  The Ministry had proposed Rs 646 crore but it was allocated Rs 317 crore, a shortfall of 51%.  The Committee noted that the reduction in allocation may have an impact on the outcomes of the Mission.  Further, the Ministry highlighted that around 60% of the allocation of the Mission goes for rural wage employment.  The Mission converges with the Mahatma Gandhi National Rural Employment Guarantee Scheme.37 The Committee expressed concerns about the impact that the reduced allocation might have on such wages.  It recommended that the Ministry must be provided the requisite allocation for Green India Mission at the 2022-23 revised stage.  At the 2022-23 revised stage, the Mission has been allocated Rs 188 crore, which is a 41% decline over 2022-23 budget estimates (See Table 3).    

21-22 Actuals 
2022-23 BE 
2022-23 RE 
2023-24 BE 
% change from 22-23 RE to 23-24 BE 
219 
318 
188 
169 
-10% 

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand for Grants 2023-24, Demand No. 28, Ministry of Environment, Forests and Climate Change; PRS.     
Declining forest cover in North Eastern states: 
According to the India State of Forest Report 2021, India's total forest cover is 7,13,789 sq. km.38  The forest cover in India has seen a net increase of 1,540 sq. km from 2019 to 2021.  States that have seen an increase in forest cover from 2019 to 2021 include Andhra Pradesh, Telangana, Odisha, and Karnataka.  North Eastern states that saw major loss of forest cover include Arunachal Pradesh, Manipur, Nagaland, and Mizoram.38  Such loss may be attributed to shifting cultivation, felling of trees, and developmental activities.38   
Composition of forest cover: When measuring the forest cover, three types of forest are covered __ 


very dense, moderately dense, and open forest. These forests are classified based upon the tree canopy density.    

| Type of Forest    | Lands with tree canopy density    |
|-------------------|-----------------------------------|
| Very Dense        | 70% and above                     |
| Moderately Dense  | 40% and above                     |
| Open Forest       | 10% and above but less than 40%   |

Sources: India State of Forest Report 2021, Ministry of Environment, Forest, and Climate Change; PRS. 

The net increase in forest cover from 2019 to 2021 is primarily on account of an increase of 2,621 sq. km in open forest cover.  During the same period, very dense forest cover has increased by 501 sq. km and moderately dense forest cover has decreased by 1,582 sq. km.     

Share 
in 
 
2019 
2021 
Change 
Total 
Forest 
Cover 
(2021) 
Very Dense 
99,278 
99,779 
501 
14% 
Moderately Dense 
3,08,472 
3,06,890 
-1,582 
43% 
Open 
3,04,499 
3,07,120 
2,621 
43% 
Total 
7,12,249 
7,13,789 
1,540 
 

Sources: India State of Forest Report 2021, Ministry of Environment, Forest, and Climate Change; PRS. 

## Cop15, Convention On Biological Diversity

The 15th meeting of the Conference of Parties (COP15) to 
the Convention on Biological Diversity (CBD) was held from 
7-19 December 2022 in Montreal, Canada.39  CBD 
recognises sovereign rights over biological resources and 
permits countries to regulate access to these resources as 
per their national legislation.40  India became a signatory to 
CBD in 1994.41  The Union Minister for Environment, Forest 
and Climate Change while addressing the meeting 
emphasised the need of adequate funding to meet targets 
for conserving biodiversity.39   

In light of India's commitments under CBD, it had passed 
the Biological Diversity Act, 2002.  The Act regulates access 
to biological resources and associated traditional 
knowledge.  The Biological Diversity (Amendment) Bill, 
2021 was introduced in Lok Sabha in December 2021 and 
subsequently referred to a Joint Parliamentary Committee.42  
The Bill amends the Act to: (i) encourage the Indian system 
of medicine and cultivation of wild medicinal plants, (ii) 
facilitate fast-tracking of processes for research, patent 
application, and transfer of research results, and (iii) 
decriminalise offences.  Key observations and 
recommendations of the Committee include: (i) making the 
penalty structure proportionate to gains obtained by entities, 
and the size of the company, and (ii) defining the term 
'codified traditional knowledge' under the Bill.43   

## Air And Water Pollution

Central Pollution Control Board (CPCB) and State Pollution Control Boards (SPCB) are responsible to regulate matters related to air and water pollution. In 2023-24, CPCB has been allocated Rs 105 crore, an increase of 5% over 2022-23 revised estimates (Rs 100 crore).  There has been a reduction of 9% 
in 2023-24 allocation when compared to 2021-22 actuals (Rs 116 crore). In 2023-24, Control of Pollution has been allocated Rs 756 crore, an increase of 26% over revised estimates of 2022-23 (Rs 600 crore).  Under Control of Pollution, the Ministry provides financial assistance to pollution control boards/committees, and funding to the National Clean Air Programme (NCAP) launched in 2019. NCAP outlines the strategy for reducing air pollution levels at the city and regional level. The Economic Survey (2021-22) noted that NCAP is implemented in 132 cities, of which 124 cities were non-attainment cities.44  Under the Programme, cities that exceed the National Ambient Air Quality Standards (NAAQS) for pollution for five consecutive years are identified as non-attainment cities.  These standards prescribe the permissible limits for pollutants.  CPCB notifies the NAAQs for PM10 and PM2.5.  PM2.5 is particulate matter with a size of less than 2.5 micrometres, and is produced primarily by combustion from fuel and coal.  PM10 is particulate matter with a size less than 10 micrometres, and is released through mechanical processes such as construction activities, road dust, and wind.  Cities should keep their PM levels within these thresholds to ensure air quality.  The WHO also prescribes such standards for PM levels.  India has a higher limit for acceptable levels of air pollutants than WHO standards. 

| WHO         | NAAQS    |   Time  |
|-------------|----------|---------|
| Weighted    |          |         |
| Average     |          |         |
| PM10 µg/m3  | Annual   |     15  |
| 24 Hours    | 45       |    100  |
| PM2.5 µg/m3 | Annual   |      5  |
| 24 Hours    | 15       |     60  |

Note: μg-microgram; NAAQS- National Ambient Air Quality Standards; WHO- World Health Organisation. Sources: Central Pollution Control Board, World Health Organisation; PRS. 

Exceeding these standards leads to undesirable levels of air pollution in the environment and can have adverse impacts on human health.  Emissions come from different sectors involving human activities such as transport, industries, and agriculture (See **Table 12** in the Annexure for sources of pollution in Delhi).45,46  Particulate matter released from such emissions can lodge 
 
deep inside lungs, leading to respiratory or pulmonary diseases. 

Cities exceeding air quality standards: In 2020, the India State-level Disease Burden Initiative, a collaborative initiative led by the Indian Council of Medical Research (ICMR) noted that 18% of total deaths in 2019 can be attributed to increasing air pollution.47  Between 2013 and 2017, 981 casualties were recorded in Delhi due to acute respiratory infection, caused by air pollution.48  In 2019, 251 cities (out of 321 cities where data was available) and 40 cities (out of 117) exceeded the NAAQS standards for PM10 and PM2.5 levels respectively.49  These cities include Delhi, Ahmedabad, Ahmedabad, and Jaipur.   
Note: For calculating the %, cities with inadequate and no data were excluded. Sources: National Ambient Air Quality Standards Status and Trends 2019, Central Pollution Control Board, Ministry of Environment, Forest & Climate Change; PRS.    
Polluted water bodies: River and other water bodies are polluted mainly due to discharge of untreated or partially treated sewage from cities/ towns and industries.50  CPCB along with pollution control boards/committees monitors the water quality of water bodies.  CPCB (2022) identified 
311 polluted stretches on 279 rivers in terms of biochemical oxygen demand, which is an indicator of organic pollution.  The CAG (2012) highlighted certain issues with water pollution regulation in India such as inadequate penalty provisions under the Water (Prevention and Control of Pollution) Act, 1974 and absence of legislation on restoration of water bodies.51  
Including provisions for air and water pollution in the Environment Protection Act: Currently air and water pollution are regulated by the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981.52,53  A High-Level Committee (2014) recommended inducting relevant provisions of the Water (Prevention and Control of Pollution) Act, 1974, and Air (Prevention and Control of Pollution) Act, 1981 in the Environmental (Protection) Act, 1986, and repealing these two Acts to avoid multiplicity of laws.29 

## Underutilisation Of Funds For National Coastal Mission

IPCC (2022) noted that coastal risks will increase due to rising sea levels impacting ecosystems, infrastructure, and livelihoods at the coast.54  In India, the National Coastal Mission seeks to address the impact of climate change on coastal and marine ecosystems through adaption and mitigation measures.  The Mission has been allocated Rs 13 crore, an increase of 213% over 2022-23 revised estimates (Rs 4 crore).  The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2022) observed that the budgetary allocation for the National Coastal Mission was drastically reduced from Rs 200 crore in 2021-22 budget estimates to Rs 101 crore at the revised stage.  Further, the Committee highlighted the underutilisation of funds in 2021-22 and the Ministry cited several reasons for it.  These include delay in implementing activities by states and COVID-19 disruptions. 

Coastal Mission (in Rs crore) 
| Year        |   BE  | RE    | Actuals    |
|-------------|-------|-------|------------|
| Utilisation |       |       |            |
| (in %)      |       |       |            |
| 2017-18     |    5  | 0     | 0          |
| 2018-19     |  165  | 130   | 130        |
| 2019-20     |   95  | 95    | 91         |
| 2020-21     |  103  | 68    | 68         |
| 2021-22     |  200  | 101   | 28         |
| 2022-23     |  195  | 4     | -          |
| 2023-24     |   13  | -     | -          |

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand for Grants (2017-18 and 2023-24), Ministry of Environment, Forest and Climate Change; PRS. 

 
1 Budget Speech 2023-24, February 1, 2023, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 2 Report No. 283: Demands for Grants (2016-17) (Demand No. 32), Ministry of Environment, Forest & Climate Change, Standing Committee on Science and Technology, Environment and Forests, May 9, 2016, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/19/24/283_2019_7_10.pdf. 3 Article 1, United Nations Framework Convention on Climate Change, 1992. 4 Summary for Policymakers on Climate Change 2021 - The Physical Science Basis, Intergovernmental Panel on Climate Change, August 7, 2021, https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR 6_WGI_SPM.pdf. 5 "National Statement by Prime Minister Shri Narendra Modi at November 1, 2021, 6 National Electricity Plan (Draft) Generation Vol- I, Central Electricity Authority, September 2022, https://cea.nic.in/wpcontent/uploads/irp/2022/09/DRAFT_NATIONAL_ELECTRIC ITY_PLAN_9_SEP_2022_2-1.pdf. 7 Report of the Sub-Committee for the Assessment of the 

## Investment In R&D On Environmental

The Draft Science and Tech Policy (2020) noted that science, technology and innovation can help in addressing challenges related to climate change, energy, and environment (such as energy transition, air pollution).55  The Policy recognised such sectors as critical and recommended encouraging research in these areas.  For instance, the National Green Hydrogen Mission, incentivises R&D to increase affordability, storage, transportation, and utilisation of green hydrogen.56  Current methods of largescale hydrogen production have high carbon emissions.  Green hydrogen addresses this issue by using solar or wind energy to produce hydrogen.  
Currently India's investment in research in environment and energy remains low when compared to other areas.      

## (2017-18)

| Sector                                | % Share                                |
|---------------------------------------|----------------------------------------|
| Health                                | 18.6                                   |
| Defence                               | 17.1                                   |
| Agriculture, Forestry and Fishing     | 12.6                                   |
| Industrial Production and Technology  | 9.8                                    |
| Exploration and Exploitation of Space | 8.8                                    |
| 8.7                                   | Transport, Telecommunication and other |
| Infrastructure                        |                                        |
| Energy                                | 7.3                                    |
| Environment                           | 0.5                                    |
| Others                                | 16.54                                  |

Sources: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS 

## .

Determined Contribution (NDC), Department of Economic Affairs, Ministry of Finance, June 2020, https://dea.gov.in/sites/default/files/Sub%20Committee%20Rep ort%20Final.pdf. 8 Report No. 21: Financial Constraints in Renewable Energy Sector, Standing Committee on Energy, February 3, 2022, http://164.100.47.193/lsscommittee/Energy/17_Energy_21.pdf. 9 Sustainable Development and 06 Climate Change, Chapter 6, Economic Survey (2020-21), https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapte r/echap06_vol2.pdf. 10 Sharm el-Sheikh Implementation Plan, Decision-/ cp.27, https://unfccc.int/sites/default/files/resource/cop27_auv_2_cover %20decision.pdf. 11 'India Submits its Long-Term Low Emission Development Strategy to UNFCCC', Press Information Bureau, Ministry of Environment, Forest and Climate Change, November 14, 2022, https://pib.gov.in/PressReleasePage.aspx?PRID=1875816. 12 India's Long-Term Low-Carbon Development Strategy, Submission to the United Nations Framework Convention on Climate Change, Ministry of Environment, Forest and Climate Change, https://moef.gov.in/wp-content/uploads/2022/11/Indias- LT-LEDS-2.pdf. 13 Chapter 7: Climate Change and Environment: Preparing to Face the Future, Economic Survey (2022-23), 
 
https://www.indiabudget.gov.in/economicsurvey/doc/eschapter/ echap07.pdf. 14 Framework for Sovereign Green Bonds, https://dea.gov.in/sites/default/files/Framework%20for%20Sove reign%20Green%20Bonds.pdf. 15 "Union Finance Minister Smt. Nirmala Sitharaman approves India's First Sovereign Green Bonds Framework", Press Information Bureau, Ministry of Finance, November 9, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1874788 . 16 Unstarred Question No. 599, Lok Sabha, Ministry of Finance, February 6, 2023, https://pqals.nic.in/annex/1711/AU599.pdf. 17 Green Finance in India: Progress and Challenges, RBI Bulletin, January 2021, https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/04AR_210120218 5D9B6905ADD465CB7DD280B88266F77.PDF. 18 The Energy Conservation (Amendment) Bill, 2022, https://prsindia.org/files/bills_acts/bills_parliament/2022/Energy %20Conservation%20(Amendment)%20Bill,%202022%20as% 20passed%20by%20LS.pdf. 19 The Energy Conservation Act, 2001, https://legislative.gov.in/sites/default/files/A2001-52.pdf. 20 "Climate change and financing a just transition", International Labour Organization, as accessed on February 6, 2023, https://www.ilo.org/empent/areas/socialfinance/WCMS_825124/lang-- en/index.htm#:~:text=A%20just%20transition%20involves%20 maximizing,fundamental%20labour%20principles%20and%20ri ghts. 21 "Cabinet approves India's Updated Nationally Determined Contribution to be communicated to the United Nations Framework Convention on Climate Change", Press Information Bureau, Union Cabinet, August 3, 2022, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1847812. 22 Report on Optimal Generation Capacity Mix for 2029-30, Central Electricity Authority, January, 2020, https://cea.nic.in/old/reports/others/planning/irp/Optimal_mix_r eport_2029-30_FINAL.pdf. 23 Coal Plant Repurposing for Ageing Coal Fleets in Developing Countries, World Bank Group, June, 2021, https://documents1.worldbank.org/curated/en/144181629878602 689/pdf/Coal-Plant-Repurposing-for-Ageing-Coal-Fleets-in- Developing-Countries-Technical-Report.pdf. 24 Draft Environmental Guidelines for Decommissioning a Coal/Lignite-Fired Power Plant, July 2021, https://imgs.mongabay.com/wpcontent/uploads/sites/30/2021/11/10130032/draft-guidelines-fordecommissioning-of-coal-based-power-plants.pdf. 25 Report of the Working Group on Environment & Environmental Regulatory Mechanisms in Environment & Forests for the Eleventh Five Year Plan (2007-2012), Planning Commission, August 2007, https://niti.gov.in/planningcommission.gov.in/docs/aboutus/com mittee/wrkgrp11/wg_envtal.pdf. 26 The Environment (Protection) Act, 1986, https://www.indiacode.nic.in/bitstream/123456789/4316/1/ep_a ct_1986.pdf. 27 The Indian Forest Act, 1927, https://www.indiacode.nic.in/bitstream/123456789/15385/1/the_ indian_forest_act%2C_1927.pdf. 28 The Water (Prevention and Control of Pollution) Act, 1974, https://www.indiacode.nic.in/bitstream/123456789/15429/1/the_ water_%28prevention_and_control_of_pollution%29_act%2C_ 1974.pdf. 29 Report No. 263: "High Level Committee Report to Review Various Acts Administered by Ministry of Environment, Forest 
& Climate Change", Standing Committee on Science and Technology, Environment and Forests, Rajya Sabha, July 22, 2015, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20S%20and%20T,%20Env.%20and%20Fore sts/263.pdf. 30 Report on India's Renewable Electricity Roadmap 2030, NITI Aayog, https://www.niti.gov.in/sites/default/files/energy/IndiasRE- Roadmap-2030.pdf. 31 "The UK's independent adviser on tackling climate change", Climate Change Committee, as accessed on February 7, 2023, https://www.theccc.org.uk/. 32 S.O. 1533(E), Ministry of Environment and Forests, http://www.environmentwb.gov.in/pdf/EIA%20Notification,%2
02006.pdf.  
33 Report of the Comptroller and Auditor General of India on Environmental Clearance and Post Clearance Monitoring, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2016/Union_ Government_Report_39_of_2016_PA.pdf. 34 Strategy for New India @ 75, NITI Aayog, November, 2018, https://niti.gov.in/sites/default/files/2019- 01/Strategy_for_New_India_0.pdf. 35 Unstarred Question No. 5206, Lok Sabha, Ministry of Environment, Forest and Climate Change, April 4, 2022, https://pqals.nic.in/annex/178/AU5206.pdf. 36 Report No. 363: Demands For Grants (2022-2023) of the Ministry of Environment, Forest and Climate Change, Standing Committee on Science and Technology, Environment and Forests, March 15, 2022, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/19/165/363_2022_9_16.pdf. 37 Implementation Guidelines for National Mission for a Green India, https://mpforest.gov.in/img/files/GIM_Implementation_Guideli nes.pdf. 38 Chapter 2 Forest Cover, India State of Forest Report, 2021, https://fsi.nic.in/isfr-2021/chapter-2.pdf. 39 "Union Minister for Environment, Forest and Climate Change Shri Bhupender Yadav delivers the National Statement at COP15 of Convention on Biodiversity, Press Information Bureau, Ministry of Environment, Forest and Climate Change, December 17, 2022, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1884341 #:~:text=Union%20Minister%20for%20Environment%2C%20F orest,COP15%20of%20Convention%20on%20Biodiversity. 40 Text of the Convention on Biological Diversity, United Nations Organisation, 1992, https://www.cbd.int/doc/legal/cbden.pdf. 41 Country Profile-India, Website of the Convention on Biological Diversity as accessed on January 25, 2022, https://www.cbd.int/countries/profile/?country=in#facts. 42 The Biological Diversity (Amendment) Bill, 2021, as introduced in Lok Sabha,  
https://prsindia.org/files/bills_acts/bills_parliament/2021/Biologi cal%20Diversity%20(Amendment)%20Bill,%202021.pdf. 43 Report of the Joint Committee On the Biological Diversity (Amendment) Bill, 2021, Lok Sabha, August 2, 2022, https://prsindia.org/files/bills_acts/bills_parliament/2021/Joint_ Committee_Reoert%20on_the_Biological_Diversity_(Amendm ent)_Bill_2021.pdf. 44 Chapter 6- Sustainable Development and Climate Change, Economic Survey 2021-22, https://www.indiabudget.gov.in/budget2022- 23/economicsurvey/doc/eschapter/echap06.pdf. 45 Summary for Policymakers on Climate Change 2021 - The Physical Science Basis, Intergovernmental Panel on Climate Change, August 7, 2021, https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR 6_WGI_SPM.pdf. 46 National Clean Air Programme, Ministry of Environment, Forests and Climate Change, 2019, https://moef.gov.in/wpcontent/uploads/2019/05/NCAP_Report.pdf. 47 India State-Level Disease Burden Initiative Air Pollution Collaborators. Health and economic impact of air pollution in the states of India: The Global Burden of Disease Study 2019. Lancet Planetary Health. 22 December 2020, https://www.thelancet.com/journals/lanplh/article/PIIS2542- 5196(20)30298-9/fulltext. 48 Report No. 316: Air Pollution in Delhi and National Capital Region, Standing Committee on Science and Technology, 
 
Environment, Forests and Climate Change, August 7, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/19/108/316_2019_1_12.pdf. 49 National Ambient Air Quality Standards Status and Trends 2019, Central Pollution Control Board, Ministry of Environment, Forest & Climate Change, September 23, 2020, https://cpcb.nic.in/upload/NAAQS_2019.pdf.  
50 Starred Question No. 19, Lok Sabha, Ministry of Jal Shakti, February 2, 2023, https://pqals.nic.in/annex/1711/AS19.pdf. 51 Chapter 2: Legislative, policy and institutional framework, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2011/Union_ Performance_Civil_Water_Pollution_India_Ministry_of_Enviro nment_and_Forest_21_2011_Chapter_2.pdf. 52 The Water (Prevention and Control of Pollution) Act, 1974, 


53 The Air (Prevention and Control of Pollution) Act, 1981, https://legislative.gov.in/sites/default/files/A1981-14.pdf. 54 Climate Change 2022: Impacts, Adaptation and Vulnerability Working Group II Contribution to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, Intergovernmental Panel on Climate Change, https://report.ipcc.ch/ar6/wg2/IPCC_AR6_WGII_FullReport.pdf
.    
55 Draft 5th Science, Technology, and Innovation Policy, Department of Science & Technology, December 2020, https://dst.gov.in/sites/default/files/STIP_Doc_1.4_Dec2020.pdf . 56  National Green Hydrogen Mission, Ministry of New and Renewable Energy, https://mnre.gov.in/img/documents/uploads/file_f- 1673581748609.pdf. 

## Annexure: Environment, Forests, And Climate Change Table 9: Key Climate Change Negotiations

| Negotiation                                                                                       | Highlights         |
|---------------------------------------------------------------------------------------------------|--------------------|
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Established that any multilateral agreement must be in accordance with the larger principle of    |                    |
| common but differentiated responsibilities and capabilities i.e., developed and developing        |                    |
| countries may be treated differently on the basis of their historic responsibilities and national |                    |
| circumstances.                                                                                    |                    |
| 1992:                                                                                             | UN Framework       |
| Convention on Climate Change                                                                      |                    |
| (UNFCCC)                                                                                          |                    |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Developed countries committed to stabilise emissions to 1990 levels by 2000.                      |                    |
| 1997:                                                                                             | Kyoto Protocol     |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| 37 developed countries committed to reduce emissions by an average of 5% from the 1990            |                    |
| levels by 2008-2012.                                                                              |                    |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| 141 countries including USA, China, and India agreed on a non-binding recognition of the          |                    |
| need to limit global temperature rise to no more than 2                                           |                    |
|                                                                                                  |                    |
| C above 1900s levels.                                                                             |                    |
| 2009:                                                                                             | Copenhagen Summit  |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Developed countries agreed to provide developing countries USD 100 billion a year, by 2020,       |                    |
| to help them cope with climate change.                                                            |                    |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| All parties decided that they can determine their contributions toward addressing climate         |                    |
| change, and will submit their contributions by 2015.                                              |                    |
| 2014:                                                                                             | Lima Conference    |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| These contributions, called Intended Nationally Determined Contributions will become the          |                    |
| foundation for the new agreement on climate change.                                               |                    |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Paris Agreement, 2015 was adopted which aims to limit the increase in the global average          |                    |
| temperature to a level between 1.5                                                                |                    |
|                                                                                                  |                    |
| C to 2                                                                                            |                    |
|                                                                                                  |                    |
| C above pre-industrial levels by 2030.                                                            |                    |
| 2015                                                                                              | : Paris Conference |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Creates two kinds of review mechanisms for tracking progress made with regard to climate          |                    |
| change commitments, and financial obligations.  These are: (i) transparency arrangements          |                    |
| (such as biennial reports), and (ii) global stocktake, every five years from 2023 onwards.        |                    |
| 2021:                                                                                             | Glasgow Conference |
| -                                                                                                 |                    |
|                                                                                                   |                    |
| Glasgow Climate Pact aims to: (i) urge developed nations to provide financial support to          |                    |
| developing nations for tackling climate change, (ii) reduce non-CO                                |                    |
| 2                                                                                                 |                    |
| greenhouse gas emissions                                                                          |                    |
| including methane by 2030, (iii) accelerate development of clean power generation including       |                    |
| phasing down of coal power, and (iv) phase out inefficient fossil fuel subsidies while providing  |                    |
| support to the poor (refers to gradual removal of subsidies which lead to overuse of such         |                    |
| fuels).                                                                                           |                    |

2022: Sharm el-Sheikh 

- 
Key features of the Sharm el-Sheikh Implementation Plan include: (i) recognising the importance science for effective climate action and policymaking, (ii) accelerating the development and deployment of technologies for energy transition, and (iii) creating a loss and damage fund for developing nations to tackle effects of climate change.    
  Sources: United Nations Framework Convention on Climate Change (UNFCCC); PRS. 

the states under Green India Mission (in Rs crore) 
| States       | 2018-19    | 2019-20    | 2020-21    |
|--------------|------------|------------|------------|
|              |            |            |            |
| Allocated    | Utilised   | %          | Allocated  |
| 3            | -          | -          | -          |
| Pradesh      |            |            |            |
| Chhattisgarh | 5          | 5          | 100%       |
| -            | -          | -          | -          |
| Pradesh      |            |            |            |
| -            | -          | -          | -          |
| Kashmir      |            |            |            |
| Karnataka    | 2          | 2          | 112%       |
| Kerala       | -          | -          | -          |
| Manipur      | 5          | 5          | 100%       |
| Mizoram      | 22         | 22         | 100%       |
| Odisha       | 5          | 5          | 100%       |
| Punjab       | 0          | -          | -          |
| Uttarakhand  | -          | 11         | -          |
| 24           | 10         | 40%        | 31         |
| Pradesh      |            |            |            |
| Maharashtra  | 10         | 8          | 74%        |
| Sikkim       | 3          | 3          | 100%       |
| West Bengal  | -          | -          | -          |
| Total        | 79         | 71         | 90%        |

Sources: Unstarred Question No. 5206, Lok Sabha, Ministry of Environment, Forest and Climate Change, April 4, 2022; PRS. 

| State/ UT                            |  Forest cover (2019)     |  Forest cover (2021)     | Change in forest cover     |
|--------------------------------------|--------------------------|--------------------------|----------------------------|
| Andhra Pradesh                       |                          |                          |                            |
| 29,137                               | 29,784                   | 647                      |                            |
| Arunachal Pradesh                    |                          |                          |                            |
| 66,688                               | 66,431                   | -257                     |                            |
| Assam                                |                          |                          |                            |
| 28,327                               | 28,312                   | -15                      |                            |
| Bihar                                |                          |                          |                            |
| 7,306                                | 7,381                    | 75                       |                            |
| Chhattisgarh                         |                          |                          |                            |
| 55,611                               | 55,717                   | 106                      |                            |
| Goa                                  |                          |                          |                            |
| 2,237                                | 2,244                    | 7                        |                            |
| Gujarat                              |                          |                          |                            |
| 14,857                               | 14,926                   | 69                       |                            |
| Haryana                              |                          |                          |                            |
| 1,602                                | 1,603                    | 1                        |                            |
| Himachal Pradesh                     |                          |                          |                            |
| 15,434                               | 15,443                   | 9                        |                            |
| Jharkhand                            |                          |                          |                            |
| 23,611                               | 23,721                   | 110                      |                            |
| Karnataka                            |                          |                          |                            |
| 38,575                               | 38,730                   | 155                      |                            |
| Kerala                               |                          |                          |                            |
| 21,144                               | 21,253                   | 109                      |                            |
| Madhya Pradesh                       |                          |                          |                            |
| 77,482                               | 77,493                   | 11                       |                            |
| Maharashtra                          |                          |                          |                            |
| 50,778                               | 50,798                   | 20                       |                            |
| Manipur                              |                          |                          |                            |
| 16,847                               | 16,598                   | -249                     |                            |
| Meghalaya                            |                          |                          |                            |
| 17,119                               | 17,046                   | -73                      |                            |
| Mizoram                              |                          |                          |                            |
| 18,006                               | 17,820                   | -186                     |                            |
| Nagaland                             |                          |                          |                            |
| 12,486                               | 12,251                   | -235                     |                            |
| Odisha                               |                          |                          |                            |
| 51,619                               | 52,156                   | 537                      |                            |
| Punjab                               |                          |                          |                            |
| 1,849                                | 1,847                    | -2                       |                            |
| Rajasthan                            |                          |                          |                            |
| 16,630                               | 16,655                   | 25                       |                            |
| Sikkim                               |                          |                          |                            |
| 3,342                                | 3,341                    | -1                       |                            |
| Tamil Nadu                           |                          |                          |                            |
| 26,364                               | 26,419                   | 55                       |                            |
| Telangana                            |                          |                          |                            |
| 20,582                               | 21,214                   | 632                      |                            |
| Tripura                              |                          |                          |                            |
| 7,726                                | 7,722                    | -4                       |                            |
| Uttar Pradesh                        |                          |                          |                            |
| 14,806                               | 14,818                   | 12                       |                            |
| Uttarakhand                          |                          |                          |                            |
| 24,303                               | 24,305                   | 2                        |                            |
| West Bengal                          |                          |                          |                            |
| 16,902                               | 16,832                   | -70                      |                            |
| Andaman and Nicobar Islands          |                          |                          |                            |
| 6,743                                | 6,744                    | 1                        |                            |
| Chandigarh                           |                          |                          |                            |
| 22                                   | 23                       | 1                        |                            |
| Dadra and Nagar Haveli and Daman and |                          |                          |                            |
| Diu                                  |                          |                          |                            |
| 228                                  | 228                      | 0                        |                            |
| Delhi                                |                          |                          |                            |
| 195                                  | 195                      | -0                       |                            |
| Jammu and Kashmir                    |                          |                          |                            |
| 21,358                               | 21,387                   | 29                       |                            |
| Ladakh                               |                          |                          |                            |
| 2,254                                | 2,272                    | 18                       |                            |
| Lakshadweep                          |                          |                          |                            |
| 27                                   | 27                       | -                        |                            |
| Puducherry                           |                          |                          |                            |
| 52                                   | 53                       | 1                        |                            |
| India                                | 7,12,249                 | 7,13,789                 | 1,540                      |

Sources: India State of Forest Report, 2021; PRS. 

 
Source  
PM10 
PM2.5 
Winter 
Summer 
Winter 
Summer 
Residential 
9% 
8% 
10% 
8% 
 
Agriculture Burning 
4% 
7% 
4% 
7% 
 
Industries 
27% 
22% 
30% 
22% 
 
Dust (soil, road and construction) 
25% 
42% 
17% 
38% 
 
Transport 
24% 
15% 
28% 
17% 
 
Others 
10% 
7% 
11% 
8% 

Note: Others include crematoria, airport, restaurants, incinerators, and landfills. Sources: Unstarred Question No. 5, Lok Sabha, Ministry of Environment, Forest and Climate Change, June 21, 2019; PRS. 

 