Social Welfare in India
Abstract and Keywords
India’s rapid economic growth is accompanied by economic inequality, poverty, and a range of social issues, thus, raising important questions concerning the breadth and depth of social protection and promotion policies prevalent in the country. The social welfare system in India is different for the formal and informal sectors of the economy. It consists of two largely parallel systems. With respect to the formal economy or the organized sector, it operates directly through the government, state-owned enterprises, and/ or private corporations that provide reasonably strong social protection to their employees through mandatory legislations spanning aspects such as payment of gratuity, employees’ provident fund, and the employees’ state insurance fund. In contrast, the informal or the unorganized sector is covered through a fragmented system of welfare schemes and benefits provided by the central government and the respective state governments.
Along with tracing the historical evolution of India’s welfare system, this article outlines the constitutional place of welfare in the country. With respect to the informal sector of the economy, it provides an overview of some of the key promotion and protection-orientated welfare policies and schemes, including those that address poverty, unemployment, education, health and food insecurity. Further, it discusses the barriers experienced by people in accessing welfare benefits, such as corruption and bureaucratic hurdles, and challenges faced by the government in welfare provision, such as scale of operation and identification of the target population groups. Finally, it assesses the country’s welfare system in light of the Global Social Protection Floor Initiative of the ILO-UN.
India is broadly characterized as a lower-middle-income country and is experiencing steady growth in its Gross Domestic Product (GDP). India has consistently witnessed a high annual percent growth rate of GDP per capita based on local currency, from 5.2% between 2006 and 2010 to 6% between 2011 and 2015 (World Bank, 2015). Twenty-six percent of the world’s poorest people reside in India, implying that India’s efforts to end extreme poverty are central to the global poverty reduction efforts and the sustainable development goal of ending extreme poverty by 2030. While GDP growth is central to poverty reduction, India lags behind on social development indicators, such as primary education, food security, maternal health, and child nutrition, compared to other countries with similar economies such as China, Turkey, Vietnam, and Brazil. On the one hand, India is a major emerging economy and, on the other hand, it continues to suffer from immense human deprivation and lack of its population’s mental, physical, emotional, and capability development.
Social security is a basic human right recognized in various international legal instruments, in particular in the Declaration of Philadelphia (1944), an integral part of the Constitution of the International Labor Organization (ILO), and the Universal Declaration of Human Rights (1948) adopted by the General Assembly of the United Nations (UN). The International Labour Conference adopted the ILO Declaration on Social Justice for a Fair Globalization at its 97th Session (2008). The ILO–World Health Organization (WHO) initiative of the Social Protection Floor (2009) promotes rights-based social security and aims to provide a basic minimum package of social security to all citizens. This initiative comprises the most important global policy agenda in the arena of social protection (Cichon, Behrendt, & Wodsak, 2011).
India does not have a universal social security system and has still not ratified ILO’s Social Security (Minimum Standards) Convention, 1952 (C102). However, with India acceding to the Social Protection Floor initiative in 2010, provision of social security to India’s unorganized workers, an overlooked issue for many years, has now taken front stage in national policy debate.
Despite these efforts, there is a large social protection deficit at the global and national levels in income security, health, education, and old age protection. For instance, 50% of the world population does not benefit from any social security, such as health insurance, pensions, and unemployment insurance. The problem is exaggerated in developing countries like India where a huge section of the workforce is informally employed and has no or very limited access to social security (Pratap & Quintin, 2006).
Social Welfare in the Indian Constitution
In the Federal Polity of India, provision of social protection is enshrined in Articles 38 (securing a social order for the promotion of welfare of the people), 39 (certain principles of policy), 41 (right to work, education, and public assistance in certain cases), 42 (just and human conditions of work and maternity relief), and 43 (living wage) of the Indian Constitution as a part of the Directive Principles of State Policy. This implies that the Indian state will strive, within the limits of its economic capacity, to make provision for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness, disablement, and in other cases of undeserved want (Tayal & Jacob, 2005).
The subject of social security appears on the concurrent list of the Indian constitution implying that both the central and state governments can initiate legislations on social security for the unorganized workforce of the country. This has led to the proliferation of social security schemes for unorganized workers at both central and state levels. At the central level, there are central government schemes like employment guarantee programs, food subsidy programs, and public assistance programs that are supplemented over and above by state level schemes that vary in number and benefits provided across Indian states.
Protective and Promotional Aspects of Social Security
There are numerous welfare schemes operating at both the central government and state levels that address a wide range of concerns including food, health, housing, pension, disability, employment generation, skills development, and education. Taken together, these schemes cover the basic features of the two different, yet interrelated aspects of social security viz., protection and promotion. Protection-orientated welfare is directed at the primarily conservative objective of “preventing a decline in living standards” of the vulnerable sections of the population, especially during times of crisis such as economic recession and production failures; whereas, promotion entails a more comprehensive effort at addressing the endemic deprivation in the society through a multipronged strategy spanning the core developmental concerns in areas such as employment generation, health care, sanitation, and education that would contribute toward the long-term goals of “enhancement of general living standards and to the expansion of basic capabilities of the population” (Drèze & Sen, 1989, p. 16). An examination of the budgetary expenditure of the government of India on the social sector over the last two decades shows a disproportionate increase of spending on protection schemes like public distribution and employment generation as compared to that on basic commodities like primary education, public health, and sanitation (Kapur & Nangia, 2015).
The Indian context, characterized by the deeply entrenched hierarchies of the caste system, underscores the need to go beyond mere economic considerations to also address the underlying social, cultural, and political aspects of deprivation of the vulnerable sections of the population (Srivastava, 2013). Thus, along with the welfare schemes that are exclusively orientated toward specific disadvantaged sections of the population, such as the scheduled castes (SC), scheduled tribes (ST), women and children, most of the general welfare schemes too have special affirmative action provisions like quotas and reservations for the relevant social groups.
The following section provides an illustrative overview of six of the most prominent welfare schemes launched by the central government. It is helpful to categorize the schemes under the threefold typology of the instruments of social protection as proposed by Barrientos and Hulme (2008), namely labor market protection, social assistance, and social insurance. Most of the schemes consist of elements characteristic of more than one of these instruments. Therefore, depending on the predominant feature of each scheme, it can be loosely assigned to one of the three heads.
Labor Market Protection (LMP)
LMP primarily consists of two central components, viz. cash or food for work programs, and skills development and training programs.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
MGNREGS, covering more than 50 million households, is one of the largest public employment guarantee schemes in the world. It is a rights-based social protection program, anchored in national legislation. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, guarantees a minimum of 100 days of public employment in every financial year to all the adult members of rural households at a legally determined minimum wage. The scheme provides for unskilled manual work at public works sites for creation of durable assets for purposes like water conservation, draught proofing, flood control, rural connectivity, sanitation, fisheries development, and land development. It combines the features of a typical employment guarantee scheme (EGS) with those of a social insurance by providing for unemployment allowance to those who do not get employed within 15 days of applying for employment under the scheme medical expenses for the workers injured in the course of their employment, and ex gratia payment for work-related death of workers or their children.
A perusal of the studies on the implementation of the scheme shows an overall improvement in welfare indicators like women’s empowerment, poverty alleviation, consumption and savings, although there are considerable variations across different states (Narayanan & Das, 2014). In 2015–16, women accounted for nearly half of the total workforce and over 58% of the total “person days” generated under the program, far exceeding the 33% minimum quota provided under the act. A number of studies highlight significant positive impact of the scheme on women workers, such as increase in income, social participation, savings, and education (Kaushal & Singh, 2016). Yet women still face significant impediments in many states such as discriminatory rationing, gender-based violence, and limited facilities for child care at work sites, and information deficit on issues like wage rate, application process, and more (Bhattacharyya, 2016), thus underscoring the need for increasing the quality of women’s participation in the program. With respect to other vulnerable groups like the SC, the ST and other backward classes (OBC), MGNREGS has managed to reach an unprecedented number even without any reservation. This is particularly evident in the states of Tamil Nadu (Carswell & De Neve, 2014), Rajasthan, Bihar, Madhya Pradesh, and Uttar Pradesh (Drèze & Khera, 2009). The positive impact of the scheme is also visible in other welfare indicators like income, savings, consumption, food security, education, and health (Fernandes, 2015).
However, studies also depict major problems and limitations plaguing the scheme in different parts of the country such as demand–supply imbalance (Chopra, 2016), entitlement gaps (Haque, 2011), corruption (Fraser, 2015), late or non-payment of wages, inferior quality of durable assets created under the scheme, failure to integrate skills development, political favoritism (Das, 2015), class politics (Roy, 2013), and discrepancies in social audits (Dutta, 2015). Given the vast scale of the scheme and the highly differentiated nature of social, political, institutional, and administrative factors across the country, such problems are not unexpected. In fact, there is a widespread consensus on the enormous potential of the scheme for the livelihood security for the vast “bottom of the pyramid” or poorest segments of the Indian population. A recommended way forward is to introduce a comprehensive set of state-wise reforms by drawing from a combination of the comparative views provided by the macro level, all India quantitative studies (Singh, 2016) and the in-depth contextual knowledge furnished by region and issue-specific case studies.
Social Assistance (SA)
Social assistance includes tax-financed programs providing for social transfers in cash or in kind with respect to essential commodities like food, housing, education, and health, that are especially directed at vulnerable sections of the society, such as the poor, SC and ST, children, elderly, women, and the differently abled.
Public Distribution System (PDS)
India has the largest public distribution networks in the world for disbursement of subsidized food items. It is a coordinative effort between the central and state governments, with the former performing the tasks of procurement, storage, and transportation of food grains, and the latter identifying the beneficiaries, issuing ration cards, and distributing the food items through a network of Fair Price Shops (FPS). Since its introduction in the early 1940s, the PDS in India has undergone some major changes, especially with respect to the underlying objective, coverage, and delivery mechanisms. In the wake of liberalization reforms in India, the year 1997 marked a major shift in the country’s public distribution policy, when the prior universal model of PDS was streamlined into a Targeted Public Distribution System (TPDS). Under the TPDS, the country’s population was divided into two groups—Above Poverty Line (APL) and Below Poverty Line (BPL)—and the access of subsidized food items (mostly rice and wheat) under the scheme was confined to the latter only. For the poorest of the poor—that is, those constituting the bottom rung of the BPL population—Antyodaya Anna Yojana (AAY) was launched in 2000, making food items available to this group at even higher rates of subsidy. Whether India should have universal or TPDS is one of the most debated issues concerning the PDS.
The key positive aspects of the former as observed in various impact assessment studies include lower leakage rates, increase in access, improved nutritional intake, and the substantive fulfillment of the Right to Food (Rahman, 2016), whereas that of the latter include higher efficiency, greater effectiveness in addressing extreme poverty and financial.
The enactment of the National Food Security Act (NFSA) in 2013 marked an important milestone in the food security policy of the country, by elevating the issue from a welfare-based one to a rights-based one (Sandhu, 2014). The Supreme Court of India has undeniably played an important role in this outcome, particularly through a series of interim orders in the ongoing litigation in the case of PUCL vs. Union of India (2001), such as the ones pronouncing eight of the central government schemes as legal entitlements (2001), increasing the monthly subsidized food quota for BPL households to 35 kilograms (2008), and directing the government to take immediate action concerning the rotting food grains in the government warehouses (2010). The NFSA seeks to extend TPDS to nearly 75% of the rural population and 50% of the urban population of the country, and makes special provisions for children and pregnant women. Even though there is evidence of positive effects of TPDS in many states, such as a greater diversification of food basket of the poor and an increase in use of the FPS (Khera, 2011a), a range of problems continue to plague the current PDS, such as an astronomical margin of inclusion–exclusion errors (Saxena, 2009; Akerkar et al., 2016), ration card fraud, leakage into black or open market (Khera, 2011b), food wastage due to inadequate storage facilities, and substantial transaction costs resulting from rampant underweighting at FPS and limited number of FPS. The NFSA envisages a range of key reforms in the functioning of TPDS to address these concerns. But, the Comptroller and Auditor General audit report (2015) showed that the implementation of the NFSA in most of the states has been unsatisfactory. Nevertheless, the NFSA holds a great promise and the linkage of the PDS with the unique identity Adhar cards is likely to have a positive impact.
Constant experimentation and adaptation are central to the success of any welfare scheme of such a large scale. Some of the promising proposals that can serve toward this end are increased digitization and use of technology like mobile phones, cash transfer, and food coupons instead of transfer in kind (Maitra & Rao, 2015), enhancing informal monitoring and enforcement (Nagavarapu & Sekhri, 2016), and most importantly, adopting an integrated approach toward food security by expanding the notion of food security to include health care, sanitation, and nutritional education, and going beyond mere provision of subsidized food to include aspects like employment generation and price stabilization (Maitra & Rao, 2015).
Sarva Shiksha Abhiyan (SSA)
SSA (meaning primary education for all), along with the Rashtriya Madhyamik Shiksha Abhiyan (for secondary education), Rashtriya Uchch Shiksha Abhiyan (for higher education), and Teacher’s Training and Adult Education Program, forms an integral component of the National Education Mission (NEM). Subsequent to the 86th constitutional amendment that made education a fundamental right (Article 21A), the government of India launched the Sarva Shiksha Abhiyan in 2002. SSA is a World Bank and UNICEF-supported countrywide scheme aimed at fulfilling the objective of Universalization of Elementary Education (UEE). It guarantees free and compulsory education to all children of 6–14 years’ age group. With the enactment of the Right of Children to Free and Compulsory Education Act in 2009, the government-backed primary education drive in the country received a further boost. The Indian government with its massive involvement in school infrastructure building, financial support, curriculum design, and technical support has become one of the largest providers of primary education in the world. These efforts, accompanied by the expansion of Mid-Day Meal Scheme, providing cooked meals in state-run and state-assisted schools, and an intensified involvement of education-focused civil society organizations with SSA (Shah, 2016), the elementary level (standards I–VIII, age group 6–14) gross enrollment rate in the country jumped to 95% in 2014, a 13% increase over the rate of enrollment at the inception of Sarva Shiksha Abhiyan in 2002.
Notwithstanding the positive developments, SSA continues to face a number of challenges, mostly at the level of implementation. Of particular concern are the problems of poor quality of education (Annual Status of Education Report, 2014), inefficiency in fund utilization, accountability-related issues (Khastagir, 2016), lack of adequate funds, reinforcement of interstate disparity in funding and quality of education, continued exclusion of marginalized groups, particularly SC, ST, and dalit girls, low retention rate of students, and teacher absenteeism (UNESCO, 2015).
National Health Mission (NHM)
The overarching NHM consists of two sub-missions: the National Rural Health Mission (NRHM) launched in 2005, and the National Urban Health Mission launched in 2013 to cover the entire country. The NHM is an ambitious effort at a comprehensive free of cost public provision of essential health services, especially to the poor and vulnerable sections of the population, such as pregnant women, children, and adolescents. Though, its main focus is on Primary Health Care (PHC), it also covers many aspects of secondary and tertiary care. Its specific targets include the prevention and reduction of Maternal Mortality Rate (MMR), Infant Mortality Rate (IMR), anemia in women, morbidity from communicable and non-communicable diseases, and out-of-pocket expenditure on health.
Along with a substantial spread of medical facilities and infrastructure throughout the country (MHFW, 2015), significant health outcomes, such as increased life expectancy, reduction in MMR and IMR, greater immunization coverage, and eradication of diseases like polio, can be largely attributable to the NHM (Central Statistical Office, 2015). Studies conducted in different parts of the country also show positive impact of a number of specific schemes and interventions under the NHM such as the Family-Centered Approach (FCA) in the PHCs (Shivalli et al., 2015), and the Trials of Improved Practices (TIPs) approach (Srivastava & Singh, 2015).
However, studies also reveal major bottlenecks and shortfalls constraining the overall performance of a number of NHM initiatives, for instance, low availability of essential medicines to the frontline health workers, flawed inventory management system, substandard quality of infrastructure and equipment, inadequate training of the ground-level staff (Malviya et al., 2013), skewed concentration of medical centers in urban areas as compared to the rural areas and inequitable distribution of facilities in different states (PCI, 2011), governmental red tape and delays in releasing funds, and the alarmingly frequent episodes of medical negligence and administration of substandard drugs (Bagcchi, 2015).
In 2008, the government launched the National Health Insurance Scheme—Rashtriya Swasthya Bima Yojana (RSBY)—that provides cashless insurance cover of up to INR 30,000 for hospitalization expenses to the BPL population and many of the unorganized sector workers and their families. Though RSBY has successfully enrolled over 41 million BPL families by the middle of 2016 and it is regarded as one of the most successful welfare schemes (World Bank, 2015), studies show major limitations, such as ineffective financial risk protection because of high out-of-pocket expenditure, and focus on secondary and tertiary care rather than primary care (Jain, 2012), indicating that standard health insurance have limited role in providing essential health care and cannot “compensate for a functional and well developed public health system” (Patel et al., 2015). In light of the severe limitations plaguing the current public health care system in India, there is a growing consensus in favor of offering universal health coverage.
Pradhan Mantri Awas Yojana (PMAY) and Indira Awas Yojana (IAY)
Launched in June 2015, PMAY subsumes the earlier “Housing for All” scheme and aims at constructing around 20 million houses in the urban areas of the entire country. The scheme provides for an interest rate subsidy of 6.5% for 15 years, and specifies its primary beneficiaries to be women, economically weaker sections, SC and ST. Given the rising housing shortage in urban India, particularly with respect to the economically weaker sections (Kumar, 2015), such a large-scale targeted scheme is a timely intervention. But, given the poor implementation of previous housing schemes before, better efficiency enhancing mechanisms need to be incorporated at the policy design level. An important case in the point would be Indira Awas Yojana, a large-scale rural housing scheme launched in 1985 to provide grants-in-aid for construction or upgradation of dwellings for BPL households. Though the scheme has had measurable positive social welfare impact, studies also highlight widespread problems of corruption (Roy, 2013), political interference (Planning Commission of India, 2009), inadequacy of the grant amount given the high construction costs, and thus, essentially limiting the benefits of the scheme to the relatively affluent sections of the dalit population (Still, 2011).
Social Insurance (SI)
It covers programs designed to provide protection against work-related risks such as accidents or life cycle-related contingencies such as old age and death. Usually SI programs have an element of contribution from the insured.
Three-Tier Contributory Social Security Schemes
Approximately 88% of India’s working population works in the informal sector (NSSO, 2014), leading a precarious existence due to a constant exposure to a range of work and life cycle-related risks and uncertainties, and mostly lacking the ability and access to viable means of coping with such contingencies. Widening the access to various forms of SI is an imperative for a meaningful realization of a countrywide safety net. Taking a step forward in this direction, the central government launched three low-cost contributory insurance schemes in May 2015. The schemes are Atal Pension Yojana (APY)—an old age pension scheme—, Pradhan Mantri Suraksha Bima Yojna (PMSBY)—an accident insurance scheme—, and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)—a life insurance scheme. These schemes are primarily aimed at the poor and underprivileged members of society that predominantly belong to the informal sector of the economy and are lacking any sort of formal insurance cover. These schemes can be seen to be integral to the National Mission of Financial Inclusion, as all the three schemes require all the policyholders to have a savings bank account.
It must be noted that these schemes are in addition to a number of other pre-existing social security laws and schemes, notably the National Minimum Wages Act (1948), and the National Social Assistance Program (NSAP) that consists of five non-contributory BPL-targeted pension schemes, namely Indira Gandhi National Old Age Pension Scheme (IGNOAPS), Indira Gandhi National Widow Pension Scheme (IGNWPS), Indira Gandhi National Disability Pension Scheme (IGNDPS), National Family Benefit Scheme (NFBS), and Annapurna Scheme that provides food grains to those entitled to IGNOAPS but have remained uncovered under it. There are also various sector-specific labor welfare funds, such as those for cinema industry workers, beedi (unprocessed tobacco wrapped in leaves) and mine workers.
Given that the percentage of the population above 60 years of age is projected to increase from 8.9% in 2015 to 19.4% in 2050, making India home to the second-largest number of old people in the world (UN, 2015), the pension policy needs to be more broad-based. Though APY provides for guaranteed pension and aims to overcome the shortcomings of previous pension schemes, Singh, Bharati, and Sanyal (2015) highlight limitations such as the contributory nature of the scheme and absence of inflation-indexing, and propose a non-contributory Universal Pension Scheme as a more effective alternative, especially in light of the persistence of high levels of poverty and the disproportionately high governmental spending on formal sector pensions in the country.
Social Welfare in the Formal Sector
The formal sector in India includes a small proportion, approximately 10–12% of the population. The formal sector primarily comprises those establishments, which are covered by the Factories Act (1948), the Shops and Commercial Establishments Acts of state governments, and the Industrial Employment Standing Orders Act (1946) among others. This sector has a formal structure in place through which social security benefits are extended to workers covered under these legislations (Karunarathne & Goswami, 2002). Although there are several acts that govern the welfare benefits of employees in the formal sector, a few important ones are described below:
• The Maternity Benefit Act (1961): the act regulates the employment of women in factories or other governmental establishments but not the employees covered under the Employees State Insurance Act (1948). Until recent times, this act made it possible for maternity leave to last up to 12 weeks. This law has recently undergone an amendment in an effort to protect women’s employment. From August 2016, the maternity leave has been extended, from 12 to 26 weeks, while women are fully paid for the time during or after pregnancy.
• Employees State Insurance Act (1948): the act applies to factories employing 10 or more persons. State governments have extended the provisions of the act to other establishments such as hotels, restaurants, cinemas, road motor transport undertakings, newspaper establishments, and educational and medical institutions. This act incorporates benefits toward sickness, disablement benefits, having dependents or vocational and physical rehabilitation.
• The Employees Provident Funds and Miscellaneous Provisions Act (1952): presently, the act is applicable to 187 specified industries and classes of establishments in which 20 or more people are employed. There are three schemes under this act: the Employees’ Provident Fund Scheme, the Employees Deposit Linked Insurance Scheme (1976), and the Employees’ Pension Scheme.
• The Payment of Gratuity Act (1972): gratuity is a form of bonus paid by the employer to the employee after a certain number of years spent in service. Under this act after completion of a minimum of five years of service, for every completed year of service or part thereof in excess of six months, the employer pays gratuity to an employee at the rate of 15 days of wages based on the rate of wages last drawn.
Barriers to access
There are various barriers to the provision and access of welfare services from both the government’s end and the citizen’s end such as corruption, illiteracy and lack of information about existing welfare schemes, poor coordination among national and state welfare schemes, lack of available funds for schemes to be operational and limited outreach. For the purposes of this article, the two most common problems of corruption and wide-scale operation are discussed.
Corruption as the misuse of power in an official office for private gains (Nye, 2001) is a common phenomenon in the political economy of developing nations. Common forms of corruption in India include financial corruption, the use of intermediaries or red-tapism at various levels of bureaucratic and official functioning, often forming a major barrier to the access of adequate welfare services for the recipients. One example of a common corrupt practice in India is the use of intermediaries who assist people in accessing government services when they should ideally be able to access directly from a government office. Although intermediaries charge people a fee, Fredriksson (2014) demonstrates that one of the most important reasons why people pay intermediaries for accessing government services is that it saves time, reduces the number of visits to the public office and of documents required for accessing the service, or time spent standing in queues at a public office. A culture of petty corruption is captured in the euphemism of jugaad, which is a Hindi term used commonly in northern India to refer to personalized innovation for the purposes of getting one’s work done and reaching one’s goal, especially in a setting of a complex public office. Jugaad also carries the implicit understanding of a corrupt practice such as a bribe or using or building a special network of people who are positioned to be of assistance in the completion of the goal (Jauregui, 2014). In studying public corruption in eastern India within the Employment Assurance Scheme, a large employment generation and poverty alleviation program, Veron, Williams, Corbridge, and Srivastava (2006) found that the government’s strategy to include local communities in scheme implementation and monitoring was ambiguous in fulfilling its purpose of combatting corruption. Researchers found that the strategies of democratic decentralization, such as the inclusion of local community members, in fact led to some community members becoming a part of the corrupt nexus between politicians and bureaucrats. In another major study, Shankar and Gaiha (2013) examine the effectiveness of a major national employment guarantee scheme and government strategies to curb corruption. This study reveals that rural illiteracy and lack of proper information about government schemes added a layer of intransparency that facilitated corrupt practices. To combat corruption as a barrier to access, increased transparency in the government systems (Peisakhin & Pinto, 2010), the use of verbal threats, decentralization of services to include the participation of people and the inclusion of women political leaders (Afridi, Iversen, & Sharan, 2013) have been recommended.
Scale of Operation and Citizen Identification
One of the biggest challenges faced by the government in the implementation of national welfare schemes includes the large scale of operation and the appropriate identification of eligible beneficiaries. Given India’s population of more than 1.2 billion people, the identification and documentation of the country’s citizens have been challenging in the past several decades. Birth certificates, driver’s licenses, or other forms of identity documents are inaccessible to the large numbers of poor and uneducated people, especially those living in rural India, creating a problem in which the poor cannot identity themselves to access basic services such as obtaining a bank account or getting a telephone connection. Often the costs of getting the documents processed are unaffordable by those who are illiterate and living in poverty (Yadav, 2014). In 2009, the Indian government established for the first time the Unique Identification Authority of India (UIDAI) meant to allot a Unique Identification Number to all Indian citizens. The UIDAI issues an Adhar card (Adhar means “basis” in Hindi), unique to every individual (Yadav, 2014). Although the Adhar card is widespread now and a large majority of the population has one, it is still in the process of being allotted to every individual. Due to the current limitation on its reach to the full population, the card is not mandatory for availing public services. Overtime, the issuance of the Adhar card to each and every citizen of the country is expected to create a database that will assist in a more convenient flow of welfare and other services to the citizens.
India and the Global Social Protection Floors
Global Social Protection Floors Initiative (GSPF-I) is one of the nine core strategies proposed by the UN Chief Executive Board in 2009 in response to the 2008 global financial crisis. It is a combined initiative of the ILO and the UN, with the former’s active involvement in developing and promoting the concept of Social Protection Floors (SPF) even before the crisis unfolded (Deacon, 2013). Firmly grounded in a human rights-based approach to social security, the GSPF-I seeks to address the global problems of poverty and social exclusion by getting the countries to determine and guarantee a nationally acceptable minimum standard of social protection, and encompasses a horizontal dimension of providing basic levels of social protection to all as well as a vertical dimension of gradually intensifying the quality of protection (ILO, 2011). The ILO Recommendation No. 202 specifies the four minimum core guarantees of: (1) essential health care with special emphasis on maternity care; (2) basic income security for children, particularly in the areas of nutrition and education; (3) basic income security for persons in active age whose earning capacities are constricted due to reasons like unemployment, sickness, maternity, and disability; and (4) basic income security for the elderly. It also requires these social protection guarantees to be established by law, and made easily enforceable through rapid and accessible complaint and appeal mechanisms.
Home to the largest number of poor in the world and with the vast majority of its workforce employed in the informal sector, India is exposed to constant shocks and systemic risks (Srivastava, 2013). SPF, in its role as a macroeconomic stabilizer in times of crises and its positive impact on human development and productivity in the long term (ILO, 2011), is particularly relevant for a lower-middle-income country like India. Although India does not yet have a comprehensive social protection policy framework, its move toward fulfilling the SPF mandate and the directive principles enshrined in its constitution is evident from the recent enactment of a number of social welfare-related legislations and the launching of a number of welfare schemes related to the four key GSPF-I guarantees (World Bank, 2015).
The schemes central to the first core guarantee of essential health care include the Janini Surakhsa Yojna, Rashtriya Bal Swasthya Karyakram, and RSBY. Income security for children is primarily covered by the Integrated Child Development Scheme (ICDS), SSA, and Mid-Day Meal Scheme, the largest school feeding program in the world (World Bank, 2015). Income security for persons in active age is addressed through measures like the MGNREGS, TPDS, Minimum Wages Act, IGNDPS, and PMSBY. For the social security of the elderly, there are pension programs like IGNOAPS and APY. Many of these schemes are rooted in national legislations, especially the ones pertaining to work, food, and education, and are therefore entitlement or rights-based, whereas others, such as the ones relating to health, housing, insurance, and pension, are not yet guaranteed by law.
Taken together, these schemes constitute a comprehensive framework of social protection, amply satisfying the four basic requirements under the GSPF-I. Even though these schemes have yielded a number of positive outcomes, including a marked reduction in poverty levels, impact assessment studies—as illustrated in Part 3 of this article—depict serious flaws in the working of these schemes. Though, each scheme encounters a specific set of challenges in different parts of the country, there are three challenges that plague the social welfare sector as a whole and pose the biggest hurdle in the substantive realization of a SPF in India. They are: (1) the fiscal challenge (discussed in detail below); (2) the design challenge involving issues like conditional versus unconditional transfer, public versus private provisioning, contributory versus non-contributory assistance, and so on; and (3) the implementation challenge arising from capacity and accountability issues (Srivastava, 2013).
Out of these three challenges, the fiscal challenge is the most important. It arises from the continual meager budgetary allocation to the social sector. In terms of public spending on health, education, pension and more, India lags behind most of the emerging economies by a considerable margin (International Labor Organization, 2014). The total budgetary expenditure on social services in 2015–16 was merely 6.7% of the GDP, with the shares of education and health sectors remaining stagnant at 3% and 1.3% respectively (Ministry of Finance, 2015). This limitation is the starkest in the health sector as India continues to bear a disproportionately high global burden of disease, IMR, and MMR, and is ranked 130 out of 188 countries on the Human Development Index (UNDP, 2015). Promising measures like the NHM are rendered acutely ineffective due to a very thin spreading of resources. Recognizing this impediment, the government of India in the 2015 National Health Policy stated the objectives of increasing the expenditure on health to 2.5% of the GDP and providing universal health coverage. Yet, the budget for 2016–17 shows only a nominal increase of 10% in the allocation to health sector.
Despite these challenges, it is widely agreed that, with the right combination of policies, a reliable social safety net is affordable even in low-income countries. Additionally, the UN General Assembly has proposed the creation of a joint Global Social Security Fund to support the GSPF-I. The emphasis placed by the ILO on South–South exchange and learning, and triangular cooperation in development of national SPFs is crucial in designing contextually sensitive SPF policy and avoiding the pitfalls of the traditional one-size-fits-all approaches. India can incrementally move toward establishing an effective rights-based SPF by integrating these external support mechanisms with the relevant changes to its macroeconomic, employment, and entrepreneurship-promotion policies (Srivastava, 2013).
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