Priorities of Uttar Pradesh Budget: As Infrastructure Expenditure Rises, Health and Education Face Neglect

Successive state governments in Uttar Pradesh have tended to neglect the social sector and this is reflected in the budgetary allocation to the sector. In the 2018–2019 budget, the increase in budgetary allocation for sectors like power, transport, and irrigation has been much higher than that for health or education.

The Uttar Pradesh (UP) government presented its second budget on 16 February 2018 in the UP legislative assembly. With a proposed expenditure of Rs 4,28,384.52 crore, it is equal to almost 30% of the projected gross state domestic product (GSDP) of the state. The proposed expenditure is 11.37% higher than 2017–18 budgeted estimate (BE) and 16.28% higher than 2018–19 revised estimate (RE) (Table 1). In fact, the RE for 2017–18 is expected to be lower than the BE by as much as Rs 16,258.67 crore. The shortfall was mainly on account of revenue expenditure, notably in the case of education, and agriculture and allied sectors. A significant part of the outlay for debt relief to farmers remained unused.

Table 1: Budget Outlays by Major Heads 
Major Heads Amount (Rs Crore)  % Change 2018–19 BE Over
2017–18 BE 2017–18 RE 2018–19 BE 2017–18 BE 2017–18 RE
Education 52,212.40 46,449.84 57,234.17 9.62 23.22
Medical and health 12,519.67 12,237.20 14,945.75 19.38 22.13
Family welfare 6,129.96 6,056.88 6,699.02 9.28 10.6
Scheduled Caste, Scheduled Tribe, and Other Backward Classes Welfare 5,600.24 6,163.03 6,517.49 16.38 5.75
Agriculture and allied 44,417.78 33,195.95 13,868.06 -68.78 -58.22
Rural development 20,657.53 21,150.07 22,263.61 7.77 5.26
Irrigation 11,992.01 11,904.67 15,974.21 33.21 34.18
Power 14,444.30 15,221.97 25,889.94 79.24 70.08
Industry 1,881.61 2,067.26 3,236.50 72.01 56.56
Transport 19,456.43 20,250.87 24,973.55 28.36 23.32
Total expenditure 384,659.71 368,401.04 428,384.52 11.37 16.28
Source: Government of Uttar Pradesh (2018a)


Development Priorities of the Government

A critical examination of the budgetary allocations reveals the developmental priorities of the state government. Infrastructure gets the largest share of the budget. The respective shares of irrigation, power, and transport sectors are 3.7%, 6.0% and 5.8% (Table 2). Education accounts for 13.4% of the proposed outlay, while medical, health, and family welfare account for only 5%. Agriculture and allied sectors get 3.24% of the budget and rural development gets 5.20%. Scheduled Caste (SC), Scheduled Tribe (ST), and Other Backward Classes (OBC) welfare gets a paltry 1.52% of the total funds. In fact, the share of education and rural development in the 2018–19 BE as compared to the share in 2017–18 BE is lower, while the shares of irrigation, power, industry, and transport have gone up. There is a clear shift towards infrastructure expenditure with the combined share of irrigation, power, and transport going up from 11.94% in 2017–18 BE to 15.6% in 2018–19 BE.

Table 2: Share of Major Sectors in Total Expenditure (%)
Major Heads 2017–18 BE 2017–18 RE 2018–19 BE
Education 13.57 12.61 13.36
Medical and health 3.25 3.32 3.49
Family welfare 1.59 1.64 1.56
SC, ST and OBC Welfare 1.46 1.67 1.52
Agriculture and allied 11.55 9.01 3.24
Rural development 5.37 5.74 5.2
Irrigation 3.12 3.23 3.73
Power 3.76 4.13 6.04
Industry 0.49 0.56 0.76
Transport 5.06 5.5 5.83
Total expenditure 100 100 100
Source: Government of Uttar Pradesh (2018a).


Social Sector Expenditure

The neglect of the social sector is surprising given the fact that UP is among the most laggard states in terms of social development indicators (Government of Uttar Pradesh 2008). The National Human Development Report 2011 ranked UP at the 14th position among major states in terms of the Human Development Index (GoI 2012). The state slipped to the 16th position according to the United Nations Development Programme Human Development Report 2015 (Kundu 2015). The National Council of Educational Research and Training Education Development Index puts UP among the bottom group (NCERT 2014). The recent Health Development Index prepared by the NITI Aayog ranks UP the lowest among the major states, even below Bihar and Jharkhand (NITI Aayog 2018). 

Despite the poor status of social indicators in UP, successive state governments have tended to neglect the social sector and this is reflected in the budgetary allocation to the sector. The share of the social sector remained at around 33% of the total expenditure between 2000–01 and 2006–07. The share improved to around 38% after that, but throughout this period the share of social sector expenditure in UP was several percentage points below the average share in all states (Table 3).

Per capita expenditure on social services is also much lower in UP as compared to other states except Bihar. In 2015–16, per capita social sector expenditure in UP was only Rs 6,163, about 30% lower than the all-states average expenditure of Rs 8,693 (Table 4). In a majority of states, per capita expenditure on social sector was more than 50% higher as compared to the expenditure in UP. States like Chhattisgarh and Telangana spent more than double the amount on the social sector as compared to UP. 

Table 3: Social Sector Expenditure in UP and All States
Year Total SSE (Billion Rs) Uttar Pradesh SSE as % of Total Expenditure
Uttar Pradesh All States
2000–01 121.3 33.1 36.8
2001–02 122.8 32.2 35.1
2002–03 131 31.1 32.6
2003–04 130 18.7 28.4
2004–05 169.3 28.6 29.6
2005–06 201.4 33.7 33.7
2006–07 240.3 32.1 33.9
2007–08 300.1 34.4 35.3
2008–09 395.1 37.8 37.6
2009–10 472.5 39 38.7
2010–11 506.7 37.7 39
2011–12 597.2 38.8 38.7
2012–13 674.4 38.8 39.3
2013–14 765.6 38.1 39.8
2014–15 863.2 36.6 41
2015–16 (RE) 1,231.50 38 42.1
2016–17 (BE) 1,412.90 41.2 42.8
Source: RBI (2017)


The lower priority given to the social sector in the 2018–19 budget is reflected in the fact that allocation for power has gone up by as much as 79% from the previous budget, and that of irrigation and transport has gone up by 33.2% and 28.36% respectively (Table 1). Compared to this, allocation for medical and health has gone up by 19.4% and that for education by only 9.62%. Meanwhile, the condition of services in government hospitals in the state remains pathetic. Evidently, the Yogi Adityanath government has not learnt any lesson from the recent tragedy in Gorakhpur where infants died in large numbers. 

Even the priorities within the medical and health sector are quite distorted and favour the urban rich over the rural poor masses. The new initiatives in the medical field aim at strengthening hospital infrastructure in the larger urban centres. The emphasis is on creation of super specialties in six selected medical colleges. There is also a proposal to upgrade five district hospitals as state medical colleges. No measure is proposed to improve the functioning of the primary health centres with provision of better facilities and staff. While super specialties are to be created in selected medical colleges in the urban areas, traditional medicine is considered to be good enough for the poor rural masses. Setting up of 100 ayurvedic dispensaries in rural areas has been proposed.

Table 4: State-wise Per Capita Social Sector Expenditure in 2015–16 RE
State Per Capita Social Sector Expenditure (Rs) As % of Average of all states
Andhra Pradesh 10,955 126.03
Bihar 6,257 71.97
Chhattisgarh 14,915 171.57
Goa 29,130 335.09
Gujarat 9,487 109.13
Haryana 11,672 134.27
Jharkhand 8,258 94.99
Karnataka 9,706 111.66
Kerala 9,774 112.43
Madhya Pradesh 8,526 98.08
Maharashtra 9,531 109.64
Odisha 9,098 104.66
Punjab 6,780 77.99
Rajasthan 9,843 113.23
Tamil Nadu 10,262 118.05
Telangana 12,251 140.93
Uttar Pradesh 6,163 70.9
West Bengal 7,465 85.88
All States 8,693 100
Source: RBI (2017).


One does not find any significant initiative in the field of education as well. The new proposals include a provision of Rs 26 crore for Pandit Deen Dayal Upadhyaya Rajkiya Model Schools. The allocation for establishing new government colleges and to complete work on colleges and universities under construction is Rs 106 crore. Two engineering colleges are proposed to be established at Gonda and Basti, with the aim for promoting technical education. The budget speech did not say anything about filling the large number of vacant positions in universities and colleges (Government of Uttar Pradesh 2018b).

Budget Speech

The budget speech started with obeisance to Lord Ram and Lord Krishna. It also pushed the Hindutva agenda of the ruling Bharatiya Janta Party government in the name of promoting tourism. Under the new tourism policy, special thrust is being given to the development of religious centres in the state. A Braj Teerth Vikas Parishad has been set up to promote religious tourism with a provision of Rs 100 crore. It is also proposed that several tourist circuits like Ramayan Paripath, Brij Krishna Paripath, Boudh Paripath, Aadhyatmic Paripath, Sufi Paripath, Bundelkhand Paripath and Jain Paripath would be developed with an allocation of Rs 70 crore. The allocation of a sum of Rs 94.26 core has been proposed for the construction of Kailash Mansarovar Bhawan in Ghaziabad. 


The low allocations to the social sector do not stem from any dearth of resources, but from the lack of realisation of the importance of these expenditure for improving the quality of life of the people and promoting economic growth. This would be clear from the fact that the increase in allocation for most other sectors has been higher as compared to the social sector. Unless the realisation dawns on the policymakers that the development of human resources is critical for the economic growth of the state, things on the social sector front and UP’s ranking on development parameters are not likely to change. 

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