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Three Years of the Real Plan
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Three Years of the Real Plan
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VIII- Social Expenditures
The federal government's expenditures in the social area during 1996 were, in real terms, 26.7% larger than in 1994. This growth was significantly greater than the rate of population expansion (2.7%) during this period. As a result, the per capita outlay of the Brazilian federal government rose from R$491 in 1994 to R$605.80 in 1996.
Federal expenditures on programs for the aged, the handicapped and the unemployed (social security, unemployment compensation, professional training and agrarian organization) grew the most during the years 1994-1996: 43.7% in real terms. Social outlays designed to improve the living conditions of the lowest income sectors of the population (health programs, basic sanitation, social support) increased 14.6% during the same period.
The rise in the federal government's social expenditures between 1994 and 1996 occurred at the same time that responsibility for managing these social activities was being decentralized to the states and municipalities. In a number of sectors (education and culture, nutrition, health, basic sanitation, environment, social assistance, housing and municipal planning, and employment and labor protection), the financial transfers to the states and municipalities accounted for an increasing share of federal social outlays. For example, direct federal expenditures in education and culture as a percentage of total expenditures in these areas declined from 82.3% in 1994 to 76.5% in 1996. At the same time, however, federal transfers as a percentage of total expenditures in these areas rose from 4.9% to 6.5% in the case of transfers to the cities.
Federal government social expenditures per capita increased from R$491 in 1994 to R$605.80 in 1996.
The monetary stability resulting from the Real Plan strengthened the effectiveness of the federal government's expenditures. Resources are no longer severely depreciated by inflation during the sometimes extended period from the time an expenditure is approved and resources allocated to the time the expenditure is actually made. Ending this corrosive effect on resources strengthened the effectiveness of outlays tremendously. This effect was especially true for those outlays implemented at the local level and/or in partnership with the states and municipalities because the gestation period for such programs is normally longer.
