The welfare story

In more tranquil times, one might have trilled “Que Sera Sera, whatever will be, will be.” But in frenzied, election-mode India, the words have changed. The impatient are demanding: What will be?

If you go strictly by the ill-tempered spats between various ideologues in public over the past few months, India’s future is teetering precariously between two trajectories — the growth economy and the welfare state. But is it?

As the parliamentary elections draw to a close, and one awaits a new government, this nagging question does not lend itself to easy answers. Fiscal hawks have been setting off alarm bells about the United Progressive Alliance’s social welfare policies for long. They argue that India, with its economic slowdown and crumbling business confidence, can ill-afford freebies, and that when a business-friendly government takes over, such “sops” should get short shrift.

But development experts point to the likelihood of a more complex picture.
If there is a Bharatiya Janata Party-led coalition government at the Centre, as is widely expected, economic growth and infrastructure development will be the top-line items of the administration. And flagship welfare schemes are unlikely to face the axe. In other words, Modinomics, post-elections, could turn out to be somewhat different from what many Modi supporters have been clamouring for.

“No government in Delhi will abandon welfare schemes in the near future,” says Prof. Alakh N. Sharma, director, Institute for Human Development, a Delhi-based think tank. Mr Sharma says existing welfare schemes will be reviewed and fine-tuned, not junked. There may be greater emphasis on direct cash transfer, possibly new approaches and initiatives. A review of welfare schemes has become necessary in light of changing circumstances no matter who forms the government. Mr Sharma says that even if the Congress-led UPA were to return to power, it would be compelled to revisit some of its landmark schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the massive public works programme launched in 2005. In many states, more people are now educated, the labour market has changed and MGNREGA is not that relevant. But for backward districts in the country mired in pools of poverty, such a scheme still provides a life support system, Mr Sharma argues.

Some development analysts assert that the BJP has run with the economic growth narrative, pushing its welfare legacy in the background because of poll politics. Economic growth is where Gujarat and BJP’s prime ministerial nominee Modi scores. However, once elections are over, hard-headed pragmatism will settle in and a more calibrated policy atmosphere is likely to take root.

Another noted development expert, Dr Vinoj Abraham of the Thiruvananthapuram-based Centre for Development Studies, agrees that there is little chance of welfare schemes being tossed out by the new dispensation, especially in poor, backward regions of the country. There are just too many extremely poor people.

“Buyers, not sellers, drive growth. Welfare schemes offer minimum social protection. If people don’t have money, what will they buy? In the long haul, economic growth can lead to huge expansion of jobs and generate disposable incomes. But this will take many years. The crucial question is ‘what kind of economic growth will we get?’” asks Dr Abraham.

Dr Abraham and Mr Sharma both stress that there is no evidence to suggest that the people in this country are turning against welfare schemes. Voters, they say, are rejecting corruption, poor execution and the slowdown in governance, particularly during the last few years of UPA-2.

While travelling across southern India researching MGNREGA, Dr Abraham found that people wanted more, not less government initiatives in areas like education and food security. They also demanded that the loopholes be plugged so that the public benefits from public funds.
In an interview this week, Mr Modi himself gave an inkling of the nuanced shape of public policy if he and his party succeed in forming the government. On MGNREGA, viewed by many as the ultimate Budget-busting handout,  Mr Modi had this to say: “We are committed to the effective implementation of MGNREGA. However, there is a need to analyse the costs and benefits in a professional manner. Experts should be asked to find out the loopholes and plug them...”

Mr Modi pointed out two key gaps in the scheme, as he saw it: it did not create much durable community assets; it needed to be seen if part of the public funds allocated for MGNREGA could be used for rural housing, sanitation, skill generation to unemployed etc. That is hardly a toss-out into the dungeon.

Indeed, though the UPA’s “handouts” and welfarist vision have been savaged by many economists sympathetic to Mr Modi, the examples of BJP-ruled states show that the party itself has no illusions about the political and economic realities which underpin welfare measures in India. BJP leaders have picked up bits and pieces of the Congress package and run with them.

During last year’s Assembly elections in BJP-ruled Madhya Pradesh, media reports noted that local health officials admitted that the National Rural Health Mission (NRHM), a UPA flagship programme focusing on maternal and child health, was the main source feeding many health schemes in the state. But the Shivraj Singh Chouhan government was able to communicate its ownership of the idea of promotion of institutional delivery.

In Chhattisgarh, another BJP-ruled state, the state government has been openly welfarist. The state government started the Saraswati Bicycle Supply Scheme back in 2004 to slash the dropout rate among high school-going girls. Though the state government can be faulted on many scores, doling out free bicycles did help push female attendance. Chhattisgarh was also smart enough to derive political mileage from its own version of the public distribution scheme when the UPA was under attack for its ambitious food security legislation. Even noted development economist Jean Dreze, no lover of the BJP, has publicly lauded Chhattisgarh’s political decision to prioritise food security.

So what is the future of welfare policies? It is not as good as many diehard welfarists may want. But neither is welfare likely to become a cuss word any time soon in India.

The Congress, now on the backfoot, had a welfare story to tell. It did not. What muddied the narrative? Corruption and implementation glitches. Not the principle underlying the social protection policies.