The recent state elections were marred by political parties making excessive, often unrealistic promises, especially in the lead-up to the polls, leading to undesirable outcomes.
About Welfare Politics
- In politics, welfare refers to a range of government programs that help people and families with basic needs or maintain a standard of living.
- Welfare programs are funded by taxpayers and provide benefits such as food stamps, vouchers, or direct payments to recipients.
- Welfare programs are often based on the principles of:
- Equality of opportunity
- Equitable distribution of wealth
- Public responsibility for those who are unable to meet their basic needs.
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Social Welfare Delivery in the Digital Age
- The digital age has transformed the way social welfare is delivered, enabling efficiency, transparency, and inclusivity.
- Governments worldwide are leveraging digital technologies to ensure that welfare schemes reach the intended beneficiaries effectively.
- Advantages:
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- Transparency: Digital platforms like India’s Direct Benefit Transfer (DBT) ensure funds reach beneficiaries directly, reducing corruption.
- Inclusivity: Digital systems, such as Aadhaar, enable access to services for marginalized groups, overcoming geographical barriers.
- Efficiency: Automation, like in MGNREGA, ensures timely and accurate delivery of benefits.
- Data-Driven Policy: Real-time data collection aids in assessing and improving welfare impacts.
- Ease of Access: Apps and online portals simplify the application process, as seen in schemes like PM-Kisan.
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Welfare Politics vis-à-vis Identity Politics
| Aspect |
Welfare Politics |
Identity Politics |
| Focus |
Socio-economic needs and reducing poverty |
Political mobilization based on shared cultural/identity markers (e.g., caste, religion, gender) |
| Approach |
Inclusive, targeting economic disadvantage |
Group-specific, prioritizing the recognition of distinct identities |
| Resource Allocation |
Based on economic status (poverty, unemployment, etc.) |
Based on identity categories (caste, religion, ethnicity) |
| Electoral Strategy |
Promises of economic relief (e.g., cash transfers, subsidies) |
Mobilizing support based on group identity and protection of rights |
| Impact on Social Unity |
Can unify diverse groups by focusing on universal needs |
Can deepen social divisions by emphasizing group differences |
| Long-Term vs. Short-Term |
Focuses on long-term structural development |
Often aims at short-term political gains within identity groups |
| Policy Challenges |
Efficient targeting, funding, and avoiding corruption |
Balancing competing group interests and avoiding exclusion or alienation of other groups |
About Welfare State
- A welfare state is a government concept where the state is responsible for the social and economic well-being of its citizens.
- Features of welfare state in India:
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- Fundamental Rights: These guarantee civil liberties and basic rights to all Indian citizens, such as freedom of speech, freedom of religion, and equality before the law.
- Directive Principles of State Policy: These are included in Part IV of the Constitution to ensure that the people of India can access social and economic rights.
- Article 38: This article states that the state should strive to promote the welfare of the people by ensuring a social order that is informed by social, economic, and political justice.
- Socialism: The Supreme Court has said that “socialism” in India means “social welfare state”
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Social Protection and Welfare Politics in India
- Social Security as a Human Right:
- Recognized by the United Nations Declaration of Human Rights and emphasized by the ILO’s 2012 Recommendation for all nations to establish a “social protection floor.”
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Role of Central and State Governments in Welfare Schemes
The central and state governments in India both play crucial roles in welfare schemes, with their responsibilities categorized into different types:
- Central Sector Schemes (CSS)
- These are fully funded and implemented by the central government without any state intervention.
- The central government bears the entire cost and manages the execution.
- Example: The National Food Security Act (NFSA), Ujjwala Scheme, and PM-KISAN are central sector schemes.
- Central Sponsored Schemes (CSS)
- These schemes are jointly funded by both the central and state governments.
- The central government provides a certain percentage of funding, and the states contribute the rest.
- Usually, the central government pays 60% and the state covers 40%.
- In some regions like Northeastern states, Jammu & Kashmir, and special category states, the central government may cover 90%, with the state paying 10%.
- The state governments have a significant role in implementation.
- Examples: MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), Rashtriya Swasthya Bima Yojana (RSBY), and Mid-Day Meal Scheme.
- State-Specific Schemes
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- These are designed and funded entirely by state governments, targeting the specific needs of the population within the state.
- The central government may or may not provide financial assistance.
- Example: Karnataka’s Gruha Lakshmi Yojana, Telangana’s Rythu Bandhu (Farmer’s welfare scheme), and Delhi’s Mukhyamantri Tirth Yatra Yojana.
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- India spends relatively low on social protection, as highlighted in the ILO’s World Social Protection Report, 2022.Informal employment constitutes 90% of India’s workforce, making social security crucial to address vulnerabilities.
- Expansion of Social Protection:
- Despite initial reluctance, social protection measures have expanded steadily, influenced by political-economy considerations.
- Social welfare expenditures increased from 1.2-1.3% of GSDP in 2017-18 to about 1.6% in 2022-23 across 11 states (Crisil report, 2023).
- Women-Centric Welfare Schemes:
- Women-focused schemes are increasingly central to India’s welfare architecture. Examples include:
- Delhi and Himachal: Cash transfer schemes for women.
- Tamil Nadu: Kalaignar Magalir Urimai Scheme (Rs. 1,000/month for women above 21 with household income < Rs. 2.5 lakh).
- Madhya Pradesh: Ladli Behna Scheme (Rs. 1,250/month for poor women).
- Congress-ruled states: Mahalakshmi (Telangana) and Gruha Lakshmi (Karnataka) programs.
- Cash transfers to women have proven economic and social benefits, including improved household consumption and potential empowerment.
- Evolution of Political Welfare Schemes:
- The central government initially resisted welfare expansion (e.g., opposition to MGNREGA). However:
- 2019: PM-KISAN income transfer scheme for farmers launched.
- 2020: During COVID-19, MGNREGA and the National Food Security Scheme were expanded.
- Free cereal distribution continues for 800 million households under the National Food Security Act.
- Trends in Political Competition and Welfare Stability:
- States with higher political competition (e.g., Rajasthan, Chhattisgarh) continue or modify existing welfare schemes, ensuring stability.
- States with low political competition (e.g., Gujarat) are less proactive in introducing new programs.
- Challenges in Social Protection Framework:
- Most schemes lack legal backing and remain administrative in nature.
- Example: Women’s income transfer schemes often reflect paternalistic views, treating women as passive beneficiaries in male-headed families.
- Absence of legal guarantees raises concerns about the stability of such schemes.
- Groups with low political leverage (e.g., the very young and the elderly) are losing out on existing protections.
Key Issues with Welfare politics
- Temptation of Populism:
- Politicians often mobilize votes by making excessive promises, particularly to the poor.
- There has been a demographic shift in poverty:
- In 1990, 90% of the poor lived in low-income countries.
- Currently, 75% of the poor live in middle-income countries, which has fueled demands for higher living standards.
- Welfare State and Freebies:
- Pre-election promises by political parties in Indian states promotes Revdi culture which included free gas cylinders, smartphones, scooters for women, enhanced cash transfers, farm loan waivers, free food packets, and free electricity for farmers.
- Revdi culture is a term used to describe the distribution of freebies to voters during election campaigns.
- Challenges in Delivery:
- There are significant resource constraints that make fulfilling these promises unsustainable.
- For instance, Himachal Pradesh, Telangana, and Karnataka faced fiscal crises after elections due to over-promising welfare schemes.
- Targeting Problems:
- Exclusion errors result in the genuine poor being left out of welfare programs.
- Inclusion errors lead to non-poor individuals benefiting unnecessarily, which strains limited resources.
- Voluntary surrender of subsidies has proven ineffective; for example, only 10.3 million out of 247.2 million LPG customers surrendered subsidies in 2021 despite government appeals.
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Freebies vs. Welfare Programs
| Aspect |
Freebies |
Welfare Programs |
| Definition |
Non-essential, often unplanned or excessive handouts, aimed at attracting votes or short-term benefits. |
Planned, targeted social programs aimed at improving long-term socio-economic outcomes. |
| Purpose |
Primarily political, to gain support or win elections. |
Social justice and poverty alleviation, aimed at providing basic needs and services. |
| Targeting |
Often universal or broad-based without proper targeting of the truly needy. |
Designed to target specific vulnerable groups (e.g., the poor, women, children, elderly). |
| Sustainability |
Usually not sustainable in the long run due to limited fiscal resources. |
Generally designed to be sustainable through long-term government planning and budgeting. |
| Fiscal Impact |
Can strain government finances, leading to fiscal deficits. |
Financed through taxes, government revenue, and careful budget allocation. |
| Implementation |
Can be quickly implemented and withdrawn, often without institutional support or legal backing. |
Requires infrastructure, planning, and legal backing for consistent delivery. |
| Social Impact |
Can lead to dependency and undermine social values or work ethics. |
Encourages self-sufficiency, improves access to services, and promotes social mobility. |
| Political Motivations |
Motivated by electoral considerations and vote bank politics. |
Motivated by the desire to address structural inequalities and improve societal well-being. |
| Examples |
Free electricity, free smartphones, free gas cylinders in election periods. |
MGNREGA, NFSA (National Food Security Act), Pradhan Mantri Awas Yojana. |
| Accountability and Transparency |
Often lacks transparency or accountability in implementation. |
Has systems of accountability, monitoring, and performance evaluation, though challenges remain. |
Unintended Consequences of Welfare politics
- Corruption and Black Marketing:
- Scarcity of subsidized goods and services creates an environment where bribes, commission payments, and black-market practices thrive.
- A 2016 study by the National Institute of Public Finance and Policy (NIPFP) found that nearly 40% of food grains distributed under PDS were diverted and sold on the black market.
- Perverse Incentives:
- Politicians may be incentivized to make even more excessive promises, driven by vested interests and the demand for black-market premiums.
- In Himachal Pradesh, the ruling government promised free electricity to farmers and cash transfers to women before the 2022 state elections. It led to financial crises, with the state failing to meet its obligations in timely payments.
- Impact on Productive Investments:
- Excessive spending on unsustainable welfare programs diverts resources from critical sectors such as education, healthcare, and infrastructure.
- In Telangana, the government introduced Rythu Bandhu, a scheme providing direct income support to farmers which led to a backlog in critical services.
- Erosion of Trust in Politics:
- Persistent gaps between promises and delivery erode public trust in political parties.
- This lack of trust undermines the credibility of sincere governance efforts.
- In Himachal Pradesh (2024), after the ruling party made ambitious promises like free electricity and cash transfers to women, the state faced fiscal difficulties, and many of these promises remained unfulfilled.
Case Studies
- Himachal Pradesh:
- The state faced a fiscal crisis after making excessive welfare promises during elections.
- Ministers had to forgo their salaries for two months, and the government considered rolling back some welfare schemes.
- The Himachal Pradesh High Court ordered the attachment of Himachal Bhawan in New Delhi for potential auction over unpaid dues to Seli Hydro Electric Power Company.
- Karnataka and Telangana:
- In these states, promises included free bus travel, free electricity, subsidized gas cylinders, and pensions for senior citizens.
- Post-election, fiscal stress has made it difficult to deliver on these promises.
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Economic and Governance Concerns
- Fiscal Stress:
- Programs like the Pradhan Mantri Garib Kalyan Anna Yojana, which provides free food grains to 810 million people at an annual cost of Rs. 2 trillion, resemble universal basic income schemes.
- Such programs strain fiscal resources, leaving little for capital expenditure essential for long-term inclusive growth.
- Difficulty in Identifying the Poor:
- The dominance of the informal sector makes income assessment challenging.
- With only about 100 million taxpayers, income tax data is insufficient for identifying the poor accurately.
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Way Forward
- Targeted Welfare Mechanisms:
- Welfare programs should be designed to accurately identify and deliver benefits to those who genuinely need them.
- There needs to be a balance between avoiding exclusion errors and preventing inclusion errors.
- Fiscal Discipline:
- Political parties should refrain from making unrealistic and unsustainable promises, particularly during elections.
- Focus should be on resource-efficient and impactful welfare initiatives.
- Public Awareness:
- Campaigns should encourage voluntary surrender of subsidies by non-poor beneficiaries.
- For instance, public appeals like the one by Prime Minister Modi for surrendering LPG subsidies need to be strengthened.
- Accountable Governance:
- Corruption and inefficiencies in service delivery must be addressed to build public confidence.
- Investments in critical sectors such as education, healthcare, and infrastructure should be prioritized.
Conclusion
While welfare schemes have increased social protection, their administrative nature and lack of legal guarantees pose challenges to sustainability. A balanced, legally-backed framework is essential to ensure inclusivity, stability, and long-term empowerment of vulnerable groups.
November 30, 2024
