Budget 2023: Result-based financing in offing for select schemes

The government could incentivise parents, children and teachers to participate in government programmes to help them achieve desired results as it plans to move to result-based financing (RBF) across select schemes.

Under RBF, a participating individual or institution is rewarded after agreed-upon results are achieved and verified. Some of the schemes across education and health sectors could be tested for RBF on a pilot basis before it is scaled up to better allocate scarce resources for competing development needs, sources told ET.

This would mean cash transfers or other incentives will be given to the children or their parents to enrol them for school education, or to teachers for regular attendance, among others, they said.


RBF is different from the output-outcome monitoring framework (OOMF) and outcome budget introduced by the government in 2017-18 as the latter is aimed at monitoring output of implementing agencies and stakeholder ministries before making budgetary allocations. “While there has been an increased outlay on social sector schemes year after year, leakage in the system and inefficiencies at all levels have meant that desired results are not obtained, prompting the government to look at the incentivising beneficiaries,” a senior government official said.

According to the official, well-designed RBF programmes can help address issues of inefficiencies in spreading while making more effective use of resources.

Budget 2023-24 has raised the allocation to the school education and literacy department by 8.4% to Rs 68,804.85 crore from Rs 63,449.37 crore in FY23 while the budgeted allocation to the health and family welfare department is up by 3.8% to Rs 86,175 crore from `83,000 crore in FY23.

“To better allocate scarce resources for competing development needs, the financing of select schemes will be changed, on a pilot basis, from input-based to result-based,” finance minister Nirmala Sitharaman said in her budget speech on Wednesday.