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Four years of Modi government: Confused priorities hit welfare strategy

Jobs, skills and startups have given way to a medley of social sector schemes – housing, sanitation, gas connections, health insurance – that are being used to craft this government’s primary political message.

analysis Updated: May 26, 2018 09:48 IST
Yamini Aiyar
Yamini Aiyar
Modi government,Four years of Modi,Narendra Modi
File photo of Prime Minister Narendra Modi. (AFP photo)

The Narendra Modi government began its tenure by distinguishing its welfare narrative from that of the United Progressive Alliance (UPA), pitting “empowerment” against the Congress-led UPA’s “rights-” and “entitlements-” focused agenda. “Make in India”, “Skill India”, “ Start Up India” were the tools to put India on the road to “empowerment”.

Now, as the government enters its final lap, the narrative has decisively shifted. Jobs, skills and startups have given way to a medley of social sector schemes – housing, sanitation, gas connections, health insurance – that are being used to craft this government’s primary political message .

The approach has all the ingredients of PM Narendra Modi’s political style – big ideas, grand announcements and ambitious targets. But a careful assessment of the long-term effects of this approach on our welfare architecture presents a sobering picture.

First, Modi’s penchant for big ideas and ambitious targets has been complemented by a centralised, tightly monitored implementation style. Line ministries and the PMO are in close, regular contact with district collectors monitoring targets. At one level, this has significantly enhanced the pace of work. My colleagues at Accountability Initiative have used government data to estimate that at the current rate, the government is building 2,450 toilets an hour! Another illustration is rural housing.

In 2014-15, expenditure on rural housing was a mere 1% of funds available. In 2016, the scheme was renamed Pradhan Mantri Awas Yojana. Budgets increased and spending was ramped up to 85% . However, this increased activity has not been complemented by increased capacity and as districts lurch from one target to another, they have little time for monitoring quality. Accountability Initiative surveys on rural sanitation, for instance, found that once a village/ district met the stated target by declaring itself open defecation free, all work on it stops, even though sustainability is a real challenge.

But the greater worry lies in the consequences of this approach on the relationship between the Centre and states. Centralised control is critical to Modi’s personalised political style as it allows him to bypass state governments and directly access voters. But the institutional consequences are significant. As district collectors become increasingly accountable directly to New Delhi, will state-specific priorities be ignored? In recent years, states have emerged as important sites for social policy innovation and reform linked to state-specific political priorities .Will a direct line of accountability between Delhi and districts reverse this momentum?

Second, technology lies at the heart of this government’s welfare approach. Early in its tenure, Direct Benefit Transfer (DBT) through JAM (Jan Dhan-Aadhar-Mobile) emerged as the primary instrument for streamlining scheme delivery. The limitations of DBT, particularly in excluding genuine beneficiaries from accessing critical benefits like the Public Distribution System (PDS), are well known. But underlying this approach is the assumption that technology can be a substitute for governance failure. Rather than invest in addressing the roots of delivery failure - complex procedures, weak human resources, poor training – the focus has been on building technology infrastructure which will fail in the absence of key reforms.

Finally, this government has had to navigate a critical challenge – building welfare instruments relevant for India’s changing socio-economic structures going forward while managing present-day vulnerabilities. But it is yet to develop a coherent framework. For instance, India’s demographic transition and changing migration patterns requires a new framework for social security protection.

In response, this government has focused on building a contribution-based portable pension architecture. However, a World Bank social protection report highlights that contributory schemes cover less than 10% of the eligible population. Irregular incomes, low awareness and difficulties in understanding complex financial needs even in states like Delhi have led to poor uptake.

Moreover, these schemes do not address the challenge of strengthening existing social security schemes for vulnerable populations who cannot afford contributory schemes. In the rush to create new schemes, non-contributory pensions like the National Old Age Pension Scheme have been ignored; budgetary allocations remain inadequate and crucial administrative reforms to improve delivery remain undone. It is likely that the recently announced health insurance scheme – without critical investments in strengthening health systems-- is likely to fall in the same trap.

To sum up, in these four years, Modi’s welfare strategy has been one of confused priorities, grand announcements and ambitious targets, but ambition is unlikely to yield real benefits in the short term and without significant course correction may cause long-term harm.

(Writer is president and chief executive, Centre for Policy Research)

First Published: May 26, 2018 09:45 IST