EDITORIAL 2: A unified welfare state
Context
The trend of populist welfare is global, and India is no exception. Though these political philanthropies provide short-term income support, they also raise a fundamental question: Should India remain trapped in fragmented, populist welfare politics, or is it time to build a unified, rights-based, and economically sustainable social security system that fuels the economy?
The International reports
- The answer is important for the future of over half of India’s population, who are under the age of 28 and aspire to live a developed-nation dream and the elderly who will need support by 2047.
- The International Labour Organisation’s Director-General recently lauded India’s “cash and non-cash” social protection schemes.
- The ongoing ILO-Phase II survey for India reveals that its schemes reach over 100 crore beneficiaries.
- This milestone is the cumulative result of numerous schemes launched by both the central and state governments.
- According to one estimate, there are over 34 major social protection schemes, 24 pension schemes and several independent welfare initiatives by states.
- The ILO’s World Social Protection Report (2021) initially estimated India’s coverage at 24.4 per cent, only later adjusting it to 48.8 per cent after the government highlighted the extent of state-level programmes.
- If even the ILO gets messed up with data, imagine what citizens face when looking for their scattered entitlements.
The pressing challenge
- The pressing challenge is optimising scattered schemes. This includes eliminating duplications, identifying the right beneficiaries, and investing in capacity building and market-ready skill sets for our working population to grow the pie, rather than compete over its pieces.
- A related challenge is the need to reimagine direct transfers not as isolated, consumptive payouts, but as self-multiplying instruments, where one entitlement has the potential to unlock access to others.
India’s way and more
- The G20 New Delhi Declaration calls for sustainably financed universal social protection coverage.
- “One Nation, One Social Security governance” presents a promising path forward. It can address current inefficiencies to make the best of the scarce fiscal resources, while sparing citizens the pain of running between various units of the government.
- For instance, E-Shram registrations are meant for unorganised workers, and EPFO registrations largely cover formal employment.
- They compete with each other and create problematic boundaries when there is an overlap.
- Specified eligibility conditions and lack of interoperability often deny simple benefits envisaged by the legislators.
- A closer look at many state government schemes shows they often repackage existing benefits under new names, offering little differentiated value.
- In its report, the ILO found several examples to illustrate how an integrated national strategy and framework were useful to provide universal social assistance and develop basic capabilities of citizens.
- Brazil’s ‘The Fome Zero’ programme brought in a Unified System of Social Assistance (SUAS) that regulates and organises the social assistance service network in all 26 states, the federal district and 5,564 municipalities.
- South Korea faced similar challenges in the 1990s and responded by consolidating welfare programmes under institutions like the National Pension Service and the National Health Insurance Service. A similar transition in India is needed.
- A “one government” approach moves away from silos, shifting the focus to collective outcomes.
- It is time to put the Digital India Stack, Aspirational Districts Programme to best use and build on the experiences from programmes like PM-Gati Shakti.
- Our Constitution empowers states to frame similar schemes in their own spheres.
Conclusion
As a caution, any move towards a unified social security governance model must be federated, flexible, and incentive-driven, with the autonomy to factor in unique social realities. Through bold political consensus, this transition can become one of India’s most transformative governance reforms since Independence.