India stands at a critical juncture in its journey towards inclusive growth and equitable development, yet the specter of persistent inequalities looms large despite the nation’s economic strides. The latest findings from the India Philanthropy Report 2024, jointly authored by Dasra and Bain & Co., underscore the urgent need to bridge the widening chasm in social sector spending.
In fiscal year 2023, India’s social sector spending amounted to approximately ₹23 trillion ($280 billion), constituting 8.3% of the gross domestic product (GDP). However, this falls significantly short of the NITI Aayog’s recommended threshold of 13% of GDP, highlighting a glaring deficit in investment towards critical social welfare programs and initiatives.
The repercussions of this shortfall are manifold, exacerbating inequalities and hindering the nation’s progress towards achieving its ambitious economic targets, including the aspiration to become a $5-trillion economy by fiscal year 2025. Despite commendable economic growth and the emergence of a burgeoning middle class, India’s social sector remains underfunded, perpetuating disparities across various strata of society.
Comparisons with OECD member countries and Brics nations reveal a stark contrast, with significantly higher spending rates reported in these regions. India’s inability to keep pace with its counterparts stems from moderate growth in corporate social responsibility (CSR) initiatives and donations from high-net-worth individuals (HNIs), despite an expanding donor pool.
The implications of India’s social sector spending deficit are far-reaching, impacting essential services such as healthcare, education, and poverty alleviation programs. The report’s projection of a ₹15 trillion deficit by fiscal year 2028 underscores the urgency of mobilizing resources and galvanizing concerted efforts to address this pressing challenge.
NITI Aayog’s estimation of a 57% disparity between demand and supply in fiscal year 2023 underscores the magnitude of the crisis, necessitating immediate intervention and strategic investment in social welfare initiatives. While the projected decrease to a 35% disparity over the next five years offers a glimmer of hope, it also underscores the imperative for sustained and accelerated action.
As India navigates its path towards inclusive growth and sustainable development, addressing the social sector spending deficit must emerge as a top priority for policymakers, philanthropists, and stakeholders across the spectrum. Concerted efforts to mobilize resources, foster innovation, and promote collaborative partnerships will be indispensable in realizing the vision of a more equitable and prosperous India.
The findings of the India Philanthropy Report 2024 serve as a clarion call for action, compelling us to reaffirm our commitment to building a society where every individual has the opportunity to thrive and contribute to the nation’s collective prosperity. It is through collective resolve and unwavering dedication that we can chart a course towards a more inclusive and resilient future for generations to come.
