In the recent past, there has been a renewed discussion around nutrition in India.  A few months ago, the Ministry of Health and Family Welfare had released the National Health Policy, 2017.[1]  It highlighted the negative impact of malnutrition on the population’s productivity, and its contribution to mortality rates in the country.  In light of the long term effects of malnutrition, across generations, the NITI Aayog released the National Nutrition Strategy this week.  This post presents the current status of malnutrition in India and measures proposed by this Strategy.

What is malnutrition?

Malnutrition indicates that children are either too short for their age or too thin.[2]  Children whose height is below the average for their age are considered to be stunted.  Similarly, children whose weight is below the average for their age are considered thin for their height or wasted.  Together, the stunted and wasted children are considered to be underweight – indicating a lack of proper nutritional intake and inadequate care post childbirth.

What is the extent of malnutrition in India?

India’s performance on key malnutrition indicators is poor according to national and international studies.  According to UNICEF, India was at the 10th spot among countries with the highest number of underweight children, and at the 17th spot for the highest number of stunted children in the world.[3]

Malnutrition affects chances of survival for children, increases their susceptibility to illness, reduces their ability to learn, and makes them less productive in later life.[4]   It is estimated that malnutrition is a contributing factor in about one-third of all deaths of children under the age of 5.[5]  Figure 1 looks at the key statistics on malnutrition for children in India.

Figure 1: Malnutrition in children under 5 years (2005-06 and 2015-16)

NFHS Survey

Sources: National Family Health Survey 3 & 4; PRS.

Over the decade between 2005 and 2015, there has been an overall reduction in the proportion of underweight children in India, mainly on account of an improvement in stunting.  While the percentage of stunted children under 5 reduced from 48% in 2005-06 to 38.4% in 2015-16, there has been a rise in the percentage of children who are wasted from 19.8% to 21% during this period.[6],[7]  A high increase in the incidence of wasting was noted in Punjab, Goa, Maharashtra, Karnataka, and Sikkim.[8]

The prevalence of underweight children was found to be higher in rural areas (38%) than urban areas (29%). According to WHO, infants weighing less than 2.5 Kg are 20 times more likely to die than heavier babies.2  In India, the national average weight at birth is less than 2.5 Kg for 19% of the children.  The incidence of low birth-weight babies varied across different states, with Madhya Pradesh, Rajasthan and Uttar Pradesh witnessing the highest number of underweight childbirths at 23%.[9]

Further, more than half of India’s children are anaemic (58%), indicating an inadequate amount of haemoglobin in the blood.  This is caused by a nutritional deficiency of iron and other essential minerals, and vitamins in the body.2

Is malnutrition witnessed only among children?

No.  Among adults, 23% of women and 20% of men are considered undernourished in India.  On the other hand, 21% of women and 19% of men are overweight or obese.  The simultaneous occurrence of over nutrition and under-nutrition indicates that adults in India are suffering from a dual burden of malnutrition (abnormal thinness and obesity).  This implies that about 56% of women and 61% of men are at normal weight for their height.

What does the National Nutrition Strategy propose?

Various government initiatives have been launched over the years which seek to improve the nutrition status in the country.  These include the Integrated Child Development Services (ICDS), the National Health Mission, the Janani Suraksha Yojana, the Matritva Sahyog Yojana, the Mid-Day Meal Scheme, and the National Food Security Mission, among others.  However, concerns regarding malnutrition have persisted despite improvements over the years.  It is in this context that the National Nutrition Strategy has been released.  Key features of the Strategy include:8

  • The Strategy aims to reduce all forms of malnutrition by 2030, with a focus on the most vulnerable and critical age groups. The Strategy also aims to assist in achieving the targets identified as part of the Sustainable Development Goals related to nutrition and health.
  • The Strategy aims to launch a National Nutrition Mission, similar to the National Health Mission. This is to enable integration of nutrition-related interventions cutting across sectors like women and child development, health, food and public distribution, sanitation, drinking water, and rural development.
  • A decentralised approach will be promoted with greater flexibility and decision making at the state, district and local levels. Further, the Strategy aims to strengthen the ownership of Panchayati Raj institutions and urban local bodies over nutrition initiatives.  This is to enable decentralised planning and local innovation along with accountability for nutrition outcomes.
  • The Strategy proposes to launch interventions with a focus on improving healthcare and nutrition among children. These interventions will include: (i) promotion of breastfeeding for the first six months after birth, (ii) universal access to infant and young child care (including ICDS and crèches), (iii) enhanced care, referrals and management of severely undernourished and sick children, (iv) bi-annual vitamin A supplements for children in the age group of 9 months to 5 years, and (v) micro-nutrient supplements and bi-annual de-worming for children.
  • Measures to improve maternal care and nutrition include: (i) supplementary nutritional support during pregnancy and lactation, (ii) health and nutrition counselling, (iii) adequate consumption of iodised salt and screening of severe anaemia, and (iv) institutional childbirth, lactation management and improved post-natal care.
  • Governance reforms envisaged in the Strategy include: (i) convergence of state and district implementation plans for ICDS, NHM and Swachh Bharat, (ii) focus on the most vulnerable communities in districts with the highest levels of child malnutrition, and (iii) service delivery models based on evidence of impact.

[1] National Health Policy, 2017, Ministry of Health and Family Welfare, March 16, 2017, http://mohfw.nic.in/showfile.php?lid=4275

[2] Nutrition in India, Ministry of Health and Family Welfare, 2005-06, http://rchiips.org/nfhs/nutrition_report_for_website_18sep09.pdf

[3] Unstarred Question No. 2759, Lok Sabha, Answered on March 17, 2017, http://164.100.47.190/loksabhaquestions/annex/11/AU2759.pdf

[4] Helping India Combat Persistently High Rates of Malnutrition, The World Bank, May 13, 2013, http://www.worldbank.org/en/news/feature/2013/05/13/helping-india-combat-persistently-high-rates-of-malnutrition

[5] Unstarred Question No. 4902, Lok Sabha, Answered on December 16, 2016, http://164.100.47.190/loksabhaquestions/annex/10/AU4902.pdf

[6] National Family Health Survey – 3, 2005-6, Ministry of Health and Family Welfare http://rchiips.org/nfhs/pdf/India.pdf

[7] National Family Health Survey – 4 , 2015-16, Ministry of Health and Family Welfare, http://rchiips.org/NFHS/pdf/NFHS4/India.pdf

[8] National Nutrition Strategy, 2017, NITI Aayog, September 2017, http://niti.gov.in/writereaddata/files/document_publication/Nutrition_Strategy_Booklet.pdf

[9] Rapid Survey On Children, Ministry of Women and Child Development, 2013-14, http://wcd.nic.in/sites/default/files/RSOC%20National%20Report%202013-14%20Final.pdf

Today, a general discussion on the Union Budget 2020-21 is being held in both Houses of Parliament.  In the budget, the government presented the estimates of the money it expects to spend on various ministries, and how much money will be raised from different sources such as levy of taxes and dividends from public enterprises in 2020-21.  In addition, the budget presented the revised estimates made by the government for the year 2019-20 in comparison to the estimates it had given to Parliament in the previous year’s budget.  The budget also gave an account of how much money the government actually raised and spent in 2018-19.  

What are revised estimates?

Some of the estimates made by the government might change during the course of the year.  For instance, once the year gets underway, some ministries may need more funds than what was actually allocated to them in the budget, or the receipts expected from certain sources might change.  Such deviations from the budget estimates get reflected in the figures released by the government at later stages as part of the subsequent budgets.  Once the year ends, the actual numbers are audited by the Comptroller and Auditor General of India (CAG), post which they are presented to Parliament with the upcoming budget, i.e. two years after the estimates are made.

For instance, estimates for the year 2019-20 were presented as part of the 2019-20 budget in July 2019.  In the 2020-21 budget (February 2020), the government presented 2019-20’s revised estimates based on the actual receipts and expenditure accounted so far during the year and estimations made for the remaining 2-3 months.

Is there a way to find out the government’s actual receipts or expenditure mid-year?

The actual receipts and expenditure accounts of the central government are maintained by the Controller General of Accounts (CGA), Ministry of Finance on a monthly basis.  On January 31, 2020, the CGA updated the accounts figures for the period April to December 2019.  Thus, we have unaudited actuals for the first nine months of the financial year.

How do the actual figures for the year 2019-20 so far compare with the revised estimates?

Table 1 gives the revised estimates presented by the central government for the year 2019-20 and the monthly account figures maintained by the CGA for the nine-month period April to December 2019.  The difference between these two figures gives us the three-month target that the government will have to meet by March 2020 to reach its revised estimates.    

Till December 2019, the government has spent Rs 21.1 lakh crore, which is 78% of the revised estimates for 2019-20.  While the expenditure has reached 78% of the target, so far, the government has been able to generate only Rs 11.8 lakh crore or 61% of the receipts (excluding borrowings) for the year 2019-20.  This implies that the receipts will have to grow at a rate of 41% in the three-month period January-March 2020 to meet the revised estimates of Rs 19.3 lakh crore.   So far, receipts have grown at a rate of 4%.

Table 1:  Budget at a Glance – Comparison of 2019-20 revised estimates with Apr-Dec 2019 figures (Rs crore)

Budget

at a Glance

Actuals

Revised

Nine-month period

Three-month target

Growth rate so far

Growth target

2018-19

2019-20

Apr-Dec 2019

Jan-Mar 2020

% change
  (Apr-Dec 2018 to Apr-Dec 2019) 

% change
  (Jan-Mar 2019 to Jan-Mar 2020) 

Revenue Expenditure

20,07,399

23,49,645

18,54,125

4,95,520

14%

28%

Capital Expenditure

3,07,714

3,48,907

2,55,522

93,385

21%

-3%

Total Expenditure

23,15,113

26,98,552

21,09,647

5,88,905

15%

22%

Revenue Receipts

15,52,916

18,50,101

11,46,897

7,03,204

6%

50%

Capital Receipts

1,12,779

81,605

31,025

50,580

-33%

-24%

of which Disinvestment

94,727

65,000

18,100

46,900

-47%

-22%

Total Receipts (without borrowings)

16,65,695

19,31,706

11,77,922

7,53,784

4%

41%

Revenue Deficit

4,54,483

4,99,544

7,07,228

-2,07,684

   

Fiscal Deficit

6,49,418

7,66,846

9,31,725

-1,64,879

 

 

Primary Deficit

66,770

1,41,741

5,07,411

-3,65,670

   

Sources:  Union Budget 2020-21; Controller General of Accounts, Ministry of Finance; PRS.

How do the actual tax receipts fare in comparison to the revised estimates of 2019-20?

A lower than estimated growth in nominal GDP has also affected the tax receipts of the government during the year. The 2019-20 budget estimated the nominal GDP to grow at 12% over the previous year, whereas the latest estimates suggest this growth rate to be 7.5% in 2019-20.  The revised estimates for 2019-20 show gross tax receipts of Rs 21.6 lakh crore (includes states’ share).  Till December 2019, tax receipts of Rs 13.8 lakh crore has been collected, which is 64% of the target.  The tax receipts will have to grow at 19% in the three-month period January-March 2020 to meet the target.  Table 2 shows similar comparison for the various taxes and also for the tax receipts devolved to states.  While the budget estimated a growth in receipts from all major taxes, receipts from taxes such as corporation tax (-14%), union excise duties (-2%), and customs (-12%) have declined during the period Apr-Dec 2019.

Table 2:  Tax receipts – Comparison of 2019-20 revised estimates with Apr-Dec 2019 figures (Rs crore)

Revenue

Receipts

Actuals

Revised

Nine-month period

Three-month target

Growth rate so far

Growth target

2018-19

2019-20

Apr-Dec 2019

Jan-Mar 2020

% change
  (Apr-Dec 2018 to Apr-Dec 2019) 

% change
  (Jan-Mar 2019 to Jan-Mar 2020) 

Gross Tax Revenue

20,80,465

21,63,423

13,83,035

7,80,388

-3%

19%

Devolution to States

7,61,454

6,56,046

4,76,113

1,79,933

-2%

-34%

Net Tax Revenue

13,17,211

15,04,587

9,04,944

5,99,643

-3%

57%

Dividend and Profits

1,13,420

1,99,893

1,61,979

37,914

175%

-30%

Other Non-tax Revenue

1,22,284

1,45,620

79,974

65,646

-10%

96%

Revenue Receipts

15,52,916

18,50,101

11,46,897

7,03,204

6%

50%

Note:  Figures for income tax exclude receipts from the Securities Transaction Tax.

Sources:  Receipts Budget, Union Budget 2019-20; Controller General of Accounts, Ministry of Finance; PRS.

If we look at sources of receipts other than taxes, non-tax revenue during Apr-Dec 2019 is Rs 2.4 lakh crore, i.e. 69% of the estimated Rs 3.5 lakh crore.  Disinvestment receipts till date amounted to Rs 18,100 crore, i.e. 17% of the budget target of Rs 1.05 lakh crore.  Though the investment target has been revised down to Rs 65,000 crore, it implies that Rs 47,000 crore would need to be raised in the next two months.    

How does this impact the borrowings of the government?

When the expenditure planned by the government is more than its receipts, the government finances this gap through borrowings.  This gap is known as fiscal deficit and equals the borrowings required to be made for that year.  Given lower than expected receipts, the government has had to borrow more money than it had planned for.  Borrowings or fiscal deficit of the government, till December 2019, stands at Rs 9.3 lakh crore, which is 22% higher than the revised estimate of Rs 7.7 lakh crore.  Note that with three months still remaining in the financial year, fiscal deficit may further increase, in case receipts are less than expenditure.

When we look at fiscal deficit as a percentage of GDP, the 2019-20 budget estimated the fiscal deficit to be at 3.3% of GDP.  This has been revised upward to 3.8% of GDP.  However, till December 2019, fiscal deficit for the year 2019-20 stands at 4.6% of GDP (taking the latest available GDP figures into account, i.e. the First Advance Estimates for 2019-20 released in January 2020).  This increase in fiscal deficit as a percentage of GDP is because of two reasons: (i) an increase in borrowings as compared to the budget estimates, and (ii) a decrease in GDP as compared to the estimate made in the budget.  The latter is due to a lower than estimated growth in nominal GDP for the year 2019-20.   The 2019-20 budget estimated the nominal GDP to grow at 12% over the previous year, whereas the latest estimates suggest this growth rate to be 7.5% in 2019-20.

Note that, in addition to the expenditure shown in the budget, the government also spends through extra budgetary resources. These resources are raised by issuing bonds and through loans from the National Small Savings Fund (NSSF).  The revised estimates for 2019-20 show an expenditure of Rs 1,72,699 crore through such extra-budgetary resources. This includes an expenditure of Rs 1,10,000 crore by the Food Corporation of India financed through loans from NSSF. Since funds borrowed for such expenditure remain outside the budget, they do not get factored in the deficit and debt figures.  If borrowings made in the form of extra-budgetary resources are also taken into account, the fiscal deficit estimated for the year 2019-20 would increase from 3.8% of GDP to 4.6% of GDP due to extra-budgetary borrowings of Rs 1,72,699 crore.  This does not account for further slippage if the targeted revenue does not materialise.