State spending on education, health outgrows GDP growth rate

State spending on education, health outgrows GDP growth rateThe state spending on health, education, family welfare and scientific services grew faster than nominal gross domestic product (GDP) growth during the period between financial years of 2003-04 and 2010-11, a fresh research by Crisil revealed.

Crisil analysed the trends in government spending of Centre as well as states from 2003-04 to 2010-11, and spending on education and health grew at a rate of 19 per cent and 17.5 per cent, faster than GDP growth rate of 15.3 per cent.

Government spending on family welfare grew 22.3 per cent, while spending on scientific services grew 16.8 per cent.

The ratings agency said that the figures showed some positive features in the expenditure trends of government.

Commenting on the findings, Crisil Research said, "There are some positive features in the expenditure patterns of government."

In physical infrastructure, government spending grew faster especially in urban development, with a compound annual growth rate of 28.9 per cent, rural development (19.4 per cent) and roads & bridges (22.1 per cent).

Roopa Kudva, managing director & chief executive officer of Crisil, suggest that the government could maintain the momentum of the increased spending in heath, education, and physical infrastructure, by re-allocating savings that will accrue from cutting fuel subsidies to these areas.