by Author Paresh Kumar [Researcher, Author, Social Entrepreneur, Co-founder, and CEO of DevInsights]
As Budget 2025 approaches, the social development sector anticipates a fiscal blueprint that not only addresses prevailing disparities but also lays the foundation for sustainable and inclusive growth. Drawing from recent allocation trends and global best practices, it is imperative that the forthcoming budget embodies a commitment to equitable development across all regions of India.
1. Augmenting Social Sector Investments
As per the Accountability Initiative report, recent fiscal patterns indicate a concerning decline in social sector spending, decreasing from 30% of total expenditures in FY 2020-21 to 19% in FY 2023-24. This downward trajectory necessitates a recalibration of priorities. Budget 2025 should aim to reverse this trend by significantly increasing allocations to health, education, and social protection programs, ensuring that marginalized communities receive the support they urgently need.
2. Leveraging Global Best Practices
International experiences offer valuable insights into effective social development strategies. For instance, South Africa’s Broad-Based Black Economic Empowerment (BBBEE) program incentivizes companies through a scorecard system, promoting corporate investments in underserved communities. Similarly, Singapore provides substantial tax deductions of up to 250% for corporate social responsibility (CSR) expenditures in priority areas. India can draw lessons from these models to enhance corporate engagement in social initiatives.
3. Incentivizing CSR in Aspirational Districts
According to a recent report by DevInsights titled “BEYOND PROFITS: Trends and the Untapped Potential of CSR in India,” corporate social responsibility (CSR) spending in India has grown by 53% between 2017 and 2022. However, the report highlights a significant geographical imbalance in the distribution of CSR funds, with the majority being concentrated in states such as Maharashtra, Karnataka, Gujarat, and Tamil Nadu. In contrast, the eastern region of the country continues to receive inadequate CSR investments, limiting the implementation of development initiatives. Furthermore, despite existing policy frameworks, India’s aspirational districts have consistently received an insufficient share of CSR funding, accounting for only about 2.5% of the total spending.
To address this imbalance, Budget 2025 should introduce enhanced tax incentives for companies that channel CSR investments into these regions, particularly in the North-East and other underserved areas. Such measures would not only promote regional equity but also stimulate local economies.
4. Strengthening Public-Private Partnerships
Encouraging collaborations between the government and private sector can amplify the impact of social development programs. By offering additional tax exemptions and streamlined regulatory processes for CSR initiatives that align with national priorities, the government can harness corporate resources and expertise to address complex social challenges.
5. Implementing Data-Driven Policy Frameworks
Budget 2025 must prioritize robust, data-driven policy frameworks by strengthening national research, monitoring, and evaluation (RM&E) firms over international organizations. Indian firms possess deep contextual insights crucial for designing impactful, scalable solutions. Investing in local expertise will enhance data sovereignty, foster transparency, and ensure long-term sustainability. Key measures should include dedicated funding, incentives for government collaboration, and AI-driven tools for real-time tracking. Empowering indigenous M&E firms will drive evidence-based decision-making and maximize social impact.
Budget 2025 presents a pivotal opportunity to realign fiscal policies with the principles of inclusive growth and social equity. By increasing social sector investments, adopting international best practices, incentivizing targeted CSR activities, fostering public-private partnerships, and embracing data-driven approaches, India can make significant strides toward a more equitable and prosperous society.