“Are The Government Grants and Transfers Impacting the State Specific SDGs of India? A Mirrored Analysis”

                                                Dr. Anandajit Goswami[1], Dr. Preeti Singh[2]

Disclaimer: All Views Expressed Are Personal

The United Nations Sustainable Development Goals (SDGs) serve as a global framework aimed at addressing significant social, economic, and environmental challenges while promoting sustainable development. These goals were established in 2015 with a target of achieving them by 2030. India, as a signatory to the SDGs, has acknowledged the importance of aligning its policies and programs with these objectives to ensure the well-being and prosperity of its citizens. A UN General Assembly meeting in September 2023 emphasized that only 19% of the SDG targets have been met to date.

Existing literature suggests that government initiatives, such as social safety nets, financial inclusion, and social security programs, can play a pivotal role in advancing the SDGs. A 2018 World Bank Study revealed that financial inclusion can alleviate poverty by providing access to credit, savings, and insurance, while also contributing to the achievement of related SDGs in areas like education, health, and gender equality. In this context, microfinance can make a significant contribution to SDG attainment by providing financial services, promoting entrepreneurship, job creation, and empowering women.

In the context of developing and least-developed countries in Sub-Saharan Africa, a study from 2021 underscored that financial inclusion can be instrumental in achieving multiple SDGs, including poverty reduction, gender equality, and sustainable economic growth, despite facing substantial challenges. Furthermore, World Bank reports emphasize that financial transfers enable individuals and households to be more resilient to macroeconomic shocks, enabling investments in education and health, thus playing a crucial role in achieving SDGs 1, 2, and 3, which are related to economic growth and development. Public-private partnerships can play a key role in building this resilience through social safety nets, particularly through microfinance initiatives. Sustained access to innovative financing and its effective, equitable distribution are fundamental factors in achieving the SDGs for households and individuals in various developing countries worldwide.

In this context, the role of fiscal resource allocation, its equitable access, sustained distribution, and effective utilization by households, becomes imperative. A 2018 IMF report clearly highlights the interconnectedness between vertical and horizontal allocation of fiscal resources and their subsequent impact on SDGs 1, 3, 8, and 10. Similarly, the World Bank’s findings in 2020 emphasized that the pattern of public expenditure and fiscal resource allocation can influence SDGs 1, 2, 3, 5, 8, and 10. The effectiveness of revenue mobilization through taxation depends on factors such as the tax base, tax administration, and on factors addressing horizontal and vertical imbalances in tax revenue mobilization across states. Additionally, in a federal and developing country like India, this effectiveness also relies on the relationship between the central government and state governments within the broader political economy context and the cycle of state and central governments.

Given this backdrop, it is essential to recognize that the Indian Government has already initiated a range of schemes and programs addressing various SDGs.

Government transfers and grants in India are instrumental in addressing various Sustainable Development Goals (SDGs). One of the primary SDGs targeted is – Goal 1: No Poverty, which is of paramount importance due to India’s population living below the poverty line. Government initiatives, such as the National Rural Employment Guarantee Scheme (NREGS), guarantee rural households a minimum number of days of employment, thereby reducing their vulnerability to poverty and providing a source of income. Programs like the Pradhan Mantri Jan Dhan Yojana (PMJDY) aim to promote financial inclusion among the poor by facilitating the opening of bank accounts, enabling direct access to government transfers and subsidies. These endeavors contribute not only to the alleviation of poverty (Goal 1) but also resonate with other goals like Goal 2: Zero Hunger and Goal 3: Good Health and Well-being.

Education is another critical sphere addressed by government transfers and grants in India, aligning with Goal 4: Quality Education. Initiatives such as the Sarva Shiksha Abhiyan (SSA) and the Mid-Day Meal Scheme (MDM) exemplify the government’s commitment to providing financial assistance to ensure access to education and enhance the quality of learning outcomes. The SSA focuses on universalizing elementary education, while the MDM scheme provides free meals to children in government schools, addressing both educational and nutritional needs. These programs have positively impacted education by increasing school enrollment rates, reducing drop-out rates, and enhancing overall educational outcomes, thereby aligning with Goal 4.

Furthermore, the government’s transfers and grants target healthcare, aligning with Goal 3: Good Health and Well-being. Notable initiatives like the National Health Mission (NHM) and Ayushman Bharat aim to improve healthcare access and outcomes. The NHM focuses on strengthening healthcare infrastructure, supplying essential drugs, and promoting maternal and child health services. Ayushman Bharat, a health insurance scheme, provides financial protection to vulnerable populations, especially those below the poverty line. These programs are being envisaged to lead to improved healthcare access, decreased out-of-pocket expenses, and enhanced health outcomes, contributing to the achievement of Goal 3.

Environmental sustainability is another key focus area of government transfers and grants in India, aligned with Goal 13: Climate Action and Goal 14: Life Below Water. Initiatives like the National Clean Energy Fund (NCEF) and various renewable energy subsidy programs aim to encourage clean and sustainable energy sources, reduce carbon emissions, and combat climate change. The National Mission for Sustainable Agriculture (NMSA) supports climate-resilient agricultural practices, water conservation, and soil health management. These efforts contribute significantly to sustainable development, environmental conservation, and mitigating the adverse effects of climate change. Moreover, government transfers and grants in India play a substantial role in advancing Goal 5: Gender Equality. Various programs, including the Beti Bachao Beti Padhao (BBBP) scheme and the Mahila Shakti Kendra (MSK) initiative, aim to empower women, promote their rights, and ensure their active participation in social and economic development. These programs offer financial assistance for education, skill development, and entrepreneurship, fostering gender equality and women’s empowerment.

Given this context, it is imperative to evaluate the impact of these government transfers across Indian states on various SDGs. To measure this impact, an indicator based matrix is devised, aligning SDG based indicators with specific transfers through schemes related to the respective SDGs. The indicators are shown in the Table 1 below :

Table 1: Indicators related to SDGs measured in specific states within zones, aligned with corresponding government transfers through targeted schemes addressing the respective SDGs.

Moreover, zone-specific metrics have been established to assess the progress of SDGs, and the indicator scores for states within each zone have been calculated for each indicators spanning across SDG 1,2,3,5,8 and 10. These SDG specific indicators are clearly linked and mapped to the government transfers and schemes which are aimed to target them and help in the attainment of SDGs in States of India. Three distinct zones of India have been examined: North, South, and West, and the corresponding scores for each state in these zones, aligned with government transfers aimed at influencing the respective SDGs, are presented in Table 2 below:

Table 2: State Scores for SDGs (linked to government transfers designed to drive progress in the respective SDGs)

Each SDG score reflects the effectiveness, preparedness of a state in influencing the specific SDG, as assessed by specific indicators outlined in Table 1 emanating from the government transfers and schemes. A lower score in any SDG signifies that a state is falling behind and is less prepared in terms of attaining the particular SDG, whereas a higher score indicates that a state is prepared and might be succeeding in driving progress in the particular SDG indicator through the implementation of government transfers, schemes, and programs.

Some of the state and SDG specific findings which contribute to the scoring are explained below –

SDG 1: No Poverty

• States with the highest poverty rates (percentage of population living below the poverty line) are Bihar (33.7%), Jharkhand (30.4%), and Uttar Pradesh (29.4%).
• States with the lowest poverty rates are Kerala (1.5%), Goa (5.1%), and Sikkim (8.2%).
• Domestic resource mobilization (as a percentage of GDP) ranges from 11.3% in Bihar to 29.4% in Maharashtra.

SDG 2: Zero Hunger

• States with the highest percentage of population experiencing hunger are in Jharkhand (23.3%), Madhya Pradesh (22.6%), and Bihar (21.7%).
• States with the highest agricultural investment (as a percentage of GDP) are Punjab (21.7%), Haryana (16.5%), and Maharashtra (14.5%).

SDG 3: Good Health and Well-being

• States with the highest healthcare spending (per capita) are Mizoram (Rs 8,585), Goa (Rs 7,995), and Sikkim (Rs 7,889).
• States with the highest mortality rate of children under five (per 1,000 live births) are Madhya Pradesh (56), Uttar Pradesh (52), and Odisha (51).

SDG 4: Quality Education

• States with the highest education budget allocation (as a percentage of total budget) are Tamil Nadu (17.6%), Bihar (15.3%), and Kerala (14.6%).
• States with the highest literacy rate (percentage of population aged 7 and above who can read and write) are Kerala (96.2%), Delhi (89.0%), and Uttarakhand (87.6%).

SDG 5: Gender Equality

• States with the highest gender budgeting (as a percentage of total budget) are Karnataka (4.4%), Punjab (4.1%), and Meghalaya (3.9%).
• States with the highest women’s representation in government (percentage of women in state legislature) are West Bengal (41.6%), Tamil Nadu (30.5%), and Telangana (29.2%).

SDG 6: Clean Water and Sanitation

• States with the highest investment in water and sanitation infrastructure (as a percentage of GDP) are Goa (1.1%), Gujarat (0.9%), and Maharashtra (0.8%).
• States with the highest percentage of population with access to clean water and sanitation are Kerala (97.5%), Mizoram (95.2%), and Sikkim (94.9%).

SDG 7: Affordable and Clean Energy

• States with the highest renewable energy subsidies (as a percentage of total energy subsidies) are Karnataka (26.3%), Tamil Nadu (18.3%), and Maharashtra (11.8%).
• States with the highest percentage of population with access to electricity are Punjab (99.5%), Delhi (99.4%), and Goa (98.7%).

SDG 8: Decent Work and Economic Growth

• States with the highest investment in job creation (as a percentage of GDP) are Maharashtra (4.4%), Gujarat (4.1%), and Tamil Nadu (3.9%).
• States with the highest unemployment rates (percentage of labour force) are Tripura (19.7%), Haryana (17.2%), and Jammu and Kashmir (15.9%).

SDG 9: Industry, Innovation, and Infrastructure

• State with the highest infrastructure investment (as a percentage of GDP) is Gujarat (9.9)

Way Forward:

The analysis clearly illustrates significant variations in the impact of government transfers and schemes on various SDG indicators across different zones and states. This underscores the critical importance of robust policy implementation at a larger scale, facilitated by effective institutions and actions at the subnational level, where stronger, effective decentralized institutions are necessary to reduce the zone specific SDG attainment disparities from Government transfers and Schemes.

To enhance the effectiveness of government transfers and schemes, evidence-based policy-making based on action research with public-spiritedness are essential. These approaches can help decipher the dynamics at the grassroots level in different Indian states, thereby enabling a more informed and targeted approach to achieving positive outcomes.

Therefore, it is now imperative to conduct a comprehensive assessment at a national and subnational level to understand the factors contributing to the divergent impacts on SDGs across India’s states and zones due to various government schemes and transfers. A transparent evaluation will bolster governance, aligning it with India’s commitment to the 2030 Agenda, and further reinforcing its international pledge to become a net-zero economy by 2070 without compromising the current and future developmental goals.