Kerala 2005 - of Planning Commission

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However, let us look at another measure. Guhan (1994)
has stated that it is possible to have resources for
social security at the national level by cutting military
expenditure and subsidies for non-poor, and argued that
doubling the proportion of social security expenditure
from 1.5 per cent of the GDP to 3 per cent is feasible.
In the regional context, if the State can tap more tax
revenue by checking the alarming proportions of sales
tax evasion and mobilise more non-tax revenue from
education, 19 health and for several economic services
from sections of population who can afford to pay, it is
quite feasible that vulnerable sections can be extended
benefits that will provide the critical minimum to rise
above the poverty level.
There are also multiple Centrally-sponsored schemes,
whose structure is inflexible with regard to specific
problems of the State and at the same time impose a fiscal
burden on the State by way of requirement of matching
contributions. There have already been suggestions at
the official level to transfer these existing schemes along
with the funds to the State Governments. If these are
translated into reality, a modest target of pension schemes
at 1 or even 1.5 per cent of the State domestic product
will not hinder the officially laid down targets of fiscal
consolidation.
In an inter-State comparison of per capita social security
and welfare expenditure (SSW) 20 for the population below
poverty line, Kerala ranks third below Haryana and Punjab,
and only marginally ahead of Tamil Nadu (Table 3.12).
When the per capita SSW is computed for the whole
population, it shows that Kerala ranks third below Haryana
and Tamil Nadu. Bihar is at the bottom of per capita SSW
expenditure. 21
As a measure of sustainability of this component of
expenditure, ratio of non-Plan to Plan expenditure is taken.
It is very high for Maharashtra, Rajasthan and Tamil Nadu.
It is 2.02 for Kerala. The deficit targeting approach to fiscal
Table 3.11: Expenditure on Various Pension Schemes by the State Government, 2003
Name of the Scheme (Col. 1)
Amount of Pension per
person (Rs.) (Col. 2)
Number of
Beneficiaries (Col. 3)
Total Expenditure in Rs. crore
(Col. 4 = Col. 2 x Col. 3)
Agricultural Workers Welfare Scheme* 120 5,27,647 75.98
Kerala Widow/Destitute Pension Scheme* 110 2,08,445 27.51
Special Pension for the Disabled and Mentally
110 1,48,553 19.61
Retarded Persons*
World War II Veterans* 300 5,690 2.05
Freedom Fighters Pension scheme* 3,000 8,880 31.97
Pension to Journalists* 1,400 398 0.67
Pension to Toddy Workers 100 14,929 1.79
Fishermen 120 28,130 4.05
Ration Dealers Welfare Fund Scheme 150 252 0.05
Coir Workers 100 67,000 8.04
Abkari Workers 200 97 0.02
Unemployment Assistance* 120 3,41,049 49.11
National Old Age Pension* 35 # 1,34,600 5.65
Unmarried Women above 50 years* 110 24,209 3.20
Total Amount 15,09,879 229.70
Note: * indicates pension schemes paid through direct budget provisions and others are through welfare funds.
# indicates the State’s share in the national old age pension. Pension paid per person is Rs. 110, out of which Rs. 75 is the contribution of the Central Government.
Source: Computed from data given in Economic Review 2004, Appendix tables 14.9 and 14.10 in Pp.S-266 and S-267. Non-pension benefits are not included for computing
expenditure.
19 In the field of education, parents who can afford higher costs of education are putting their children in private unaided schools.
This will make the effort to levy user charges on education difficult as only children of parents who cannot afford higher cost of education
are enrolled in Government schools. A thrust on improving the quality of education in Government schools attains importance here,
as it is the prerequisite for attracting well-to-do parents to send their children, if the user charges are reasonable and less than the cost of
education in private unaided schools. An elaborate discussion of the quality of education has been made elsewhere in this report.
20 This is a component of the social sector expenditure, which includes certain protective and promotional measures.
21 We use both the indicators, as the BPL category is not the means test for many social security schemes as they have other
methods of means testing. Nevertheless, per capita SSW for BPL population can also be looked at, as social security schemes
are intended predominantly for the poorer sections of the population.