Addressing Financial Needs

What is the best investment we can make for India ’ s future? “ The development of children is the first priority on the country ’ s development agenda, not because they are the most vulnerable, but because they are our supreme assets and also the future human resources of the country ” -Tenth Five year Plan

Are we spending enough? On all sectors? Are the spending patterns support/ facilitate the lateral synergistic relationship that exist/ evident across the different sectors/ sub-sectors of Human / Child development? At All stages of Development? Are the spending patterns show any evidence of support/ facilitating to the vertical (continuous & cumulative nature of the process of child development, with every preceding sub-stage tends to set the readiness level for the next stage, thus reduce the investment costs of subsequent stage ’ s corrective measures? In all States?

Budgeting for children- 3 Imbalances Intra-sectoral spending Intra- stage spending Intra- regional spending Difficult to disaggregate data for children separately – Most programs are for mother and child

Sectoral spending on Children in Union Budget

Underutilization of central government funds for child development (in Rupees at constant prices)

ICDS expenditure per Beneficiary Child

Per Child Expenditure Under ICDS ( )

Resource Gap in SNP allocation of funds Source: Annual Report , Planning Commission, Government of India

Gap in Resource Utilization – % of ICDS funds utilized 2001

Percentage share of elementary education in education expenditure

Trends In The Expenditure On Elementary Education In The 1990s (In Rupees, Millions, Constant Prices)

Comparative Per Child Expenditure On Children Below 6 Years And 6-14 Years

Per Child and Per beneficiary Child expenditure – How it is camouflaged by actual reach

Critical Period In Brain Development – Financing Gap

Spending on Children - Only <2% of Central government ’ s budget State government spends – on an average 10% of their total budget on children But this camouflages a wide range Substantial component of this spending is on salaries Little scope for investment in areas that would improve targeting and service delivery Together, centre and state spends around 2.26% of the GDP on children

Concern Spending mostly on Primary education - Health, nutrition – not getting enough compared to education Wide imbalances with regard to relative spending on children below 6 years and that for the 6+ years Not all money allocated is spend Some of the states with the poorest CD indicators may need more, but actually they spend less and in the process, get less in the next cycle of allocation, suggesting a perpetuation of a vicious cycle of low resources and slow development. 20 million children in the country below 11 years; US$ 1.8 per child per month!

Concerns all the more relevant because it takes place in the context of A fragmented, sectoral approach in implementing the schemes, which does not capture the synergies across sectors Over-centralised and standardised program designs which do not address contextual diversities Low accountability Poor service delivery Inefficient program implementations Inadequate monitoring capacity

Financing issues in the context of service delivery (Services fail the poor in 4 ways (WDR 2004)): Spending on health and education of the govt increase, but spending on actual quality and in real terms is probably not enough; Even when public spending is reallocated towards the poor, it often does not reach the frontline provider Service delivery is not regulated by “carrots and sticks” Lack of ownership among the community

Government needs to continue as the dominant provider for children ’ s development and education Considerations of equity and efficiency coupled with the constraints of limited resources and the need for maximizing welfare impact call for rational targeting of public resources fort he poorest of poor.

What should be done w.r.t financing Adequate spending in all sectors at all stages of child development Investing in the very young child – priority Targeting Public financing for Poor children All these being taken care of by states, which are laggards in outcomes. Approach for planning outcome-focused child-centered multi-sectoral demand driven community decentralized Improved targeting and monitoring Improved service delivery Making private sector more accountable Forging new partnerships When will it work?

Along with enhanced funding, there is the need for governance and administrative reforms and greater focus in strengthening institutional capacity, greater accountability, focus on outcomes and most importantly, breaking perpetuating inequalities