Context

Housing, sanitation, gas connections (Ujjwala), direct benefit transfers (DBT), income support (PM-Kisan) — contrary to early indications, the Narendra Modi government’s first term proved to be far more welfarist than was expected of a government that campaigned on the slogan of minimum government.

Analysis of welfare projects

1.Technology and bureaucracy

•  Early in its tenure, the government embraced Aadhaar and DBT with gusto. And in its last few months, it began the transition to basic income support through PM-Kisan.

• Underlying this approach is the assumption that technology can substitute for an incompetent and corrupt welfare bureaucracy.

• Moving money directly to beneficiary accounts removes bureaucratic layers and tightens monitoring, thus improving efficiency and curbing corruption.

The flaw in design –

• But recent studies show that rather than reducing bureaucracy, getting the DBT architecture right requires significant bureaucratic intervention. From opening accounts to promoting financial literacy and facilitating bank transactions, local bureaucrats are critical to DBT.

• Getting the DBT architecture right requires bureaucrats to engage citizens and coordinate across departments — a skill that Indian bureaucrats simply do not posses.

Examples from other countries –

Countries like Brazil and Mexico have invested in large cadres of social workers at the local government level to do just this.

Way ahead

• Building a competent welfare bureaucracy,-The success of welfare programmes in Modi 2.0 will depend on willingness to recognise that building a competent welfare bureaucracy, even if its only task is to move money, will require empowering local governments with skills and resources.

• Challenges with Digitised welfare systems

• Digitised efficiency risks casting citizens as passive recipients of government largesse rather than active claimants of rights.

• Digitised welfare systems genuinely risk closing off spaces for citizens to complain, protest and demand accountability when rights are denied.

Case study –  Consider the many documented instances of using coercive threats (cutting ration and electricity) to meet Swachh Bharat goals. This is not to argue against administrative efficiency, rather to highlight risks that need resolution.

2. Analysis of Ayushman Bharat

Second, with Ayushman Bharat, Modi 1.0 took a significant step towards engineering an architectural shift in India’s welfare system, away from direct provisioning (government running hospitals and schools) towards financing citizens (through income support and health insurance) and regulating private providers.

Challenges

• But can a state that struggles with routine tasks regulate a sector as complex as healthcare?

• Consider this. In the United States, medicare employs 6,000 staff to cover 44 million beneficiaries who handle insurance audits, pricing, and anti-trust cases.

• The staffing requirement, at equivalent levels in Uttar Pradesh alone, would amount to 10,000 employees.

Strengthening health care infrastructure –

• Importantly, in a sector like health where predatory practices are rife, well-functioning government hospitals are a necessary check and balance. Regulation cannot be a substitute for investing in public systems.

• Ayushman Bharat must be complemented with a concerted focus on strengthening public hospitals.

3. Balance in Centre-state relations

This multiplicity of central schemes has served to entrench a silo-driven, one-size-fits-all approach that is inefficient as it fails to capture state-specific needs.

Way Ahead to balance centre state relation

• But, sensible rationalisation needs a coherent framework.

• The World Bank’s social protection analysis calls for developing a national social protection strategy with a core basket of schemes that states can adapt to their needs.

• Greater flexibility to states was also recommended by the Niti Aayog’s chief ministers sub committee report in 2016.

• Implementing these recommendations will require a radical shift in the role of thecentral government away from designing and controlling schemes to strategic thinking and supporting states.

• There are obvious trade-offs with administrative efficiency from centralised schemes that will need to be negotiated.

4. Education Policy

• Finally, no government can afford to ignore India’s learning crisis.

• Yet this was one of the most under-prioritised areas in Modi 1.0’s welfare agenda.

• The newly-released national education policy emphasises the urgent need to ensure all students achieve foundational literacy and numeracy.

• This needs to be adopted and implemented in mission mode.

Conclusion

The difficult task of building a high quality, 21stcentury welfare state awaits Modi 2.0. India doesn’t need new schemes, rather it needs consolidation and balancing between competing welfare strategies. Getting this right will require significant investments in state capacity. This is the welfare challenge for Modi 2.0.

Context

Housing, sanitation, gas connections (Ujjwala), direct benefit transfers (DBT), income support (PM-Kisan) — contrary to early indications, the Narendra Modi government’s first term proved to be far more welfarist than was expected of a government that campaigned on the slogan of minimum government.

Analysis of welfare projects

1.Technology and bureaucracy

•  Early in its tenure, the government embraced Aadhaar and DBT with gusto. And in its last few months, it began the transition to basic income support through PM-Kisan.

• Underlying this approach is the assumption that technology can substitute for an incompetent and corrupt welfare bureaucracy.

• Moving money directly to beneficiary accounts removes bureaucratic layers and tightens monitoring, thus improving efficiency and curbing corruption.

The flaw in design –

• But recent studies show that rather than reducing bureaucracy, getting the DBT architecture right requires significant bureaucratic intervention. From opening accounts to promoting financial literacy and facilitating bank transactions, local bureaucrats are critical to DBT.

• Getting the DBT architecture right requires bureaucrats to engage citizens and coordinate across departments — a skill that Indian bureaucrats simply do not posses.

Examples from other countries –

Countries like Brazil and Mexico have invested in large cadres of social workers at the local government level to do just this.

Way ahead

• Building a competent welfare bureaucracy,-The success of welfare programmes in Modi 2.0 will depend on willingness to recognise that building a competent welfare bureaucracy, even if its only task is to move money, will require empowering local governments with skills and resources.

• Challenges with Digitised welfare systems

• Digitised efficiency risks casting citizens as passive recipients of government largesse rather than active claimants of rights.

• Digitised welfare systems genuinely risk closing off spaces for citizens to complain, protest and demand accountability when rights are denied.

Case study –  Consider the many documented instances of using coercive threats (cutting ration and electricity) to meet Swachh Bharat goals. This is not to argue against administrative efficiency, rather to highlight risks that need resolution.

2. Analysis of Ayushman Bharat

Second, with Ayushman Bharat, Modi 1.0 took a significant step towards engineering an architectural shift in India’s welfare system, away from direct provisioning (government running hospitals and schools) towards financing citizens (through income support and health insurance) and regulating private providers.

Challenges

• But can a state that struggles with routine tasks regulate a sector as complex as healthcare?

• Consider this. In the United States, medicare employs 6,000 staff to cover 44 million beneficiaries who handle insurance audits, pricing, and anti-trust cases.

• The staffing requirement, at equivalent levels in Uttar Pradesh alone, would amount to 10,000 employees.

Strengthening health care infrastructure –

• Importantly, in a sector like health where predatory practices are rife, well-functioning government hospitals are a necessary check and balance. Regulation cannot be a substitute for investing in public systems.

• Ayushman Bharat must be complemented with a concerted focus on strengthening public hospitals.

3. Balance in Centre-state relations

This multiplicity of central schemes has served to entrench a silo-driven, one-size-fits-all approach that is inefficient as it fails to capture state-specific needs.

Way Ahead to balance centre state relation

• But, sensible rationalisation needs a coherent framework.

• The World Bank’s social protection analysis calls for developing a national social protection strategy with a core basket of schemes that states can adapt to their needs.

• Greater flexibility to states was also recommended by the Niti Aayog’s chief ministers sub committee report in 2016.

• Implementing these recommendations will require a radical shift in the role of thecentral government away from designing and controlling schemes to strategic thinking and supporting states.

• There are obvious trade-offs with administrative efficiency from centralised schemes that will need to be negotiated.

4. Education Policy

• Finally, no government can afford to ignore India’s learning crisis.

• Yet this was one of the most under-prioritised areas in Modi 1.0’s welfare agenda.

• The newly-released national education policy emphasises the urgent need to ensure all students achieve foundational literacy and numeracy.

• This needs to be adopted and implemented in mission mode.

Conclusion

The difficult task of building a high quality, 21stcentury welfare state awaits Modi 2.0. India doesn’t need new schemes, rather it needs consolidation and balancing between competing welfare strategies. Getting this right will require significant investments in state capacity. This is the welfare challenge for Modi 2.0.

Context

Housing, sanitation, gas connections (Ujjwala), direct benefit transfers (DBT), income support (PM-Kisan) — contrary to early indications, the Narendra Modi government’s first term proved to be far more welfarist than was expected of a government that campaigned on the slogan of minimum government.

Analysis of welfare projects

1.Technology and bureaucracy

•  Early in its tenure, the government embraced Aadhaar and DBT with gusto. And in its last few months, it began the transition to basic income support through PM-Kisan.

• Underlying this approach is the assumption that technology can substitute for an incompetent and corrupt welfare bureaucracy.

• Moving money directly to beneficiary accounts removes bureaucratic layers and tightens monitoring, thus improving efficiency and curbing corruption.

The flaw in design –

• But recent studies show that rather than reducing bureaucracy, getting the DBT architecture right requires significant bureaucratic intervention. From opening accounts to promoting financial literacy and facilitating bank transactions, local bureaucrats are critical to DBT.

• Getting the DBT architecture right requires bureaucrats to engage citizens and coordinate across departments — a skill that Indian bureaucrats simply do not posses.

Examples from other countries –

Countries like Brazil and Mexico have invested in large cadres of social workers at the local government level to do just this.

Way ahead

• Building a competent welfare bureaucracy,-The success of welfare programmes in Modi 2.0 will depend on willingness to recognise that building a competent welfare bureaucracy, even if its only task is to move money, will require empowering local governments with skills and resources.

• Challenges with Digitised welfare systems

• Digitised efficiency risks casting citizens as passive recipients of government largesse rather than active claimants of rights.

• Digitised welfare systems genuinely risk closing off spaces for citizens to complain, protest and demand accountability when rights are denied.

Case study –  Consider the many documented instances of using coercive threats (cutting ration and electricity) to meet Swachh Bharat goals. This is not to argue against administrative efficiency, rather to highlight risks that need resolution.

2. Analysis of Ayushman Bharat

Second, with Ayushman Bharat, Modi 1.0 took a significant step towards engineering an architectural shift in India’s welfare system, away from direct provisioning (government running hospitals and schools) towards financing citizens (through income support and health insurance) and regulating private providers.

Challenges

• But can a state that struggles with routine tasks regulate a sector as complex as healthcare?

• Consider this. In the United States, medicare employs 6,000 staff to cover 44 million beneficiaries who handle insurance audits, pricing, and anti-trust cases.

• The staffing requirement, at equivalent levels in Uttar Pradesh alone, would amount to 10,000 employees.

Strengthening health care infrastructure –

• Importantly, in a sector like health where predatory practices are rife, well-functioning government hospitals are a necessary check and balance. Regulation cannot be a substitute for investing in public systems.

• Ayushman Bharat must be complemented with a concerted focus on strengthening public hospitals.

3. Balance in Centre-state relations

This multiplicity of central schemes has served to entrench a silo-driven, one-size-fits-all approach that is inefficient as it fails to capture state-specific needs.

Way Ahead to balance centre state relation

• But, sensible rationalisation needs a coherent framework.

• The World Bank’s social protection analysis calls for developing a national social protection strategy with a core basket of schemes that states can adapt to their needs.

• Greater flexibility to states was also recommended by the Niti Aayog’s chief ministers sub committee report in 2016.

• Implementing these recommendations will require a radical shift in the role of thecentral government away from designing and controlling schemes to strategic thinking and supporting states.

• There are obvious trade-offs with administrative efficiency from centralised schemes that will need to be negotiated.

4. Education Policy

• Finally, no government can afford to ignore India’s learning crisis.

• Yet this was one of the most under-prioritised areas in Modi 1.0’s welfare agenda.

• The newly-released national education policy emphasises the urgent need to ensure all students achieve foundational literacy and numeracy.

• This needs to be adopted and implemented in mission mode.

Conclusion

The difficult task of building a high quality, 21stcentury welfare state awaits Modi 2.0. India doesn’t need new schemes, rather it needs consolidation and balancing between competing welfare strategies. Getting this right will require significant investments in state capacity. This is the welfare challenge for Modi 2.0.