MONETISING WELFARE
New official data confirms that the various welfare schemes are actually reaching beneficiaries, reversing a trend. EPISODE #73
Dear Reader,
A very Happy Monday to you.
Last week the findings of the National Family Health Survey-5 (2019-21), basically a periodic statistical overview of the state of India’s health, surfaced afresh in news media. I have been unable to fathom the trigger, nonetheless it made me dig into the data. To my pleasant surprise the survey data confirmed that the legion of welfare programmes—like housing, women empowerment, education, cooking gas—are finally beginning to bite.
Coincidentally I came across a tweet from StatsofIndia, another terrific handle visualising complex data, which unpacked the recently released GIS data set on the Gram Sadak Yojana or rural roads project. It showed that enhanced road connectivity was placing several rural facilities on the national map, bringing development to the village.
Separately, the All India Debt and Investment Survey (2019) throws up some other revealing data points with respect to financial inclusion.
Connect the dots and it tells you a nice story about the monetisation of welfare, reversing a trend wherein such development spending always eluded the target audience. Do read and share your feedback.
In passing would like to mention that even the gratuitous cover story on India by The Economist last week grudgingly concedes that the Indian economy is being rewired with social welfare as one of the pivots.
This week’s cover picture is a collage of another piece of wall-art showcasing pop icons. Hope it appeals to you too.
A big shoutout to Vandana, Gautam, Niranjan, Premasundaran and Preeti for your informed responses, kind appreciation and amplification for last week’s column. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
REIMAGINING WELFARE
By sheer experience we have come to view welfare spending as the unholy pact between corrupt politicians and their minions to bleed the exchequer. And tragically at election time every politician waxes eloquent about how they would force radical reform if elected to power. Somehow they have failed to walk the talk.
The state of affairs even prompted the then prime minister, Rajiv Gandhi, to famously remark, during a visit in 1985 to the Kalahandi district in Odisha, that of every rupee spent by the government only 15 paisa reached the beneficiary—or that 85% is drained as cut-money by middlemen.
Guess what? Something has changed in the delivery system; benefits are actually accruing to beneficiaries. Or it may just be a case of happy convergence of circumstances that were set in motion, independently of each other, several years apart.
And this claim is not based on one data set. In fact, three data sets issued by the government over the last year or so tell us an interesting story about how the business of welfare is undergoing a happy reset. They are the National Family Health Survey-5 (2019-21), GIS data set on the Prime Minister’s Gram Sadak Yojana and the All India Debt and Investment Survey (2019).
Together they tell us an inspiring story of inclusion as millions of empowered beneficiaries begin to gain a foothold on the ladder of aspirations.
Inclusion
Check out the table above which captures the metrics guaranteeing a basic living standard—especially in insulating families against communicable diseases and economic vagaries. It speaks for itself.
The use of cooking gas, toilets, access to electricity and ownership of bank accounts and homes by women have seen a surge in growth between the two surveys of the National Family Health Survey (NFHS).
The All India Debt and Investment Survey conducted in 2019 reaffirms the financial inclusion trends captured by the NFHS-5. It found that nearly three in four Indians, living in rural or urban areas, own a bank account. The big surge in the last few years was no doubt brought about by the trinity of Jandhan (no frills bank account) Aadhaar (12 digit unique identity) and Mobile (with the moniker JAM).
To be sure these are sample surveys (and not a Census where everyone is counted) and hence the data is only indicative of trends. Even then we can safely conclude that the direction of change is clear.
Yes, the legacy deficit (thanks to cumulative public policy inaction in the last 70 years) is still large, but it is clearly shrinking.
The Causes
The obvious question is how did this dramatic change come about. One can only surmise. It is my argument that this is due to a constellation of circumstances, which have conspired to alter status quo on welfare spending.
One very important factor is the momentum generated by the rural roads project initiated by the first Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) under the leadership of Atal Bihari Vajpayee. The flagship scheme, Pradhan Mantri Gram Sadak Yojana (PMGSY), gradually acquired momentum under the Congress-led United Progressive Alliance led by Prime Minister Manmohan Singh.
As you can see from the graph above the two worms, sanctioned and completed roads, are all but converging by the end of March this year.
No doubt that the pace picked up during the tenure of NDA 2.0 led by Prime Minister Narendra Modi, which assumed power in 2014. More importantly, in little over two decades India has built/re-developed over 600,000 km of rural roads.
Sharing an anecdotal experience of an expat on the transformation that rural roads are inspiring in Bihar—an agrarian state. I do not know the individual nor can I verify the claim. Presuming from the details that this is true. I suggest you click the link below and read the entire thread.
Undoubtedly road building always brings with it prosperity. The best example has been the United States.
A study (Fan, Hazel and Throat, 1999) undertaken by the International Food Policy Research Institute on linkages between government expenditure and poverty in rural India revealed that an investment of Rs. 10 crore (at 2009-10 prices) in roads lifts 16,500 persons above the poverty line.
Indeed poverty levels have declined from over 40% at the turn of the Millennium to about a fifth at the last count. As mentioned in my introduction, some superb visualisation work done by StatsofIndia captures this impact.
In February the government released the geotagged PMGSY Rural Connectivity Dataset. StatsofIndia perused the more than 8 lakh plus rural facilities—agro-based, education, medical and transport/administration—which were geotagged to do a series of visualisations.
Please click the twitter link below to see the entire thread.
The following rural facilities were found to be on the rural roads map:
1,55,500 are Agro facilities (mandis, warehouses, cold storages, rice mills, milk centres etc);
1,73,200 are Education facilities (includes high schools, colleges, ITI, etc);
92,700 medical (veterinary hospitals, PHCs, CHCs) facilities;
3,75,200 administration/transport related facilities (banks, bus-stands, panchayat offices, fuel stations).
If rural connectivity provided the enabling ecosystem to take development to the people, then the Direct Benefits Transfer (DBT) has been the force multiplier on ensuring targeted spending under social welfare.
As a regular reader of this column I am sure you would recall my frequent references to this phenomenon.
Most recently in my column titled ‘Feeding India’ I had shared the experience of DBT in enabling the massive mitigation project undertaken by the government to protect those at the bottom of the pyramid from the devastation caused by the once in a century pandemic.
“The NDA then went one step further and seeded the Aadhaar number, the 12-digit unique identity, of 800 million beneficiaries with their ration cards.
Not only did this enable Direct Benefits Transfer (DBT), eliminating corruption by cutting out the ubiquitous middleman, it also laid the basis for the next big technology powered innovation in public policy: One Nation, One Ration Card (ONORC).
Now any beneficiary could walk-in to any FPS anywhere in the country that is equipped with an ePoS and authenticate themselves with their Aadhaar biometrics to claim their entitlements either in full or in part.
This is a big boon to the migrants who previously would either lose out on their allotment or would have to travel back home to claim it.”
Also sharing the graphic capturing the surge in DBT during the last two years, when conventional supply chains for welfare programmes were severely disrupted.
If you wish to re-read the piece please click the link below:
It is then clear that welfare is getting monetised, gradually levelling the playing field for all Indians.
It is exactly this democratisation of democracy which is inspiring the social makeover that we have been witnessing the last few years. In almost every field, the glass ceiling of elitism is being shattered.
It is no longer ‘people like us’. In fact, if anything ‘people like us’ now have to compete with their newly empowered citizens. Yes, it will take a lot of adjustments all around to accept this unprecedented change.
But surely an India that is more representative of its people is so much superior and sustainable as a nation than one reserved for the elites. It also makes for good economics as the addition of the economically empowered to the mainstream grows the national market. A win-win indeed.
Recommended Viewing
Mother’s day came by recently. Besides WhatsApp groups where everyone duly recorded their appreciation, companies too showcased their tributes to mothers.
Came across this compelling offering from Tanishq.
Sharing the link below. Enjoy.
Till we meet again next week. Stay safe.
Always heartening to perceive a ray of bright hope, in an otherwise grim situation confronting countries all over the world, except perhaps currently, a handful of oil exporters. The point about developing connectivity through increased construction of roads, leading to prosperity, is I feel, a very important point Anil. The government has allocated the maximum amount to UP for this purpose and the State government has gone ahead and done a massive expansion of the road and highway construction in the State. If UP does well, then the target of reaching a 5 trn $ economy is possible. Another critical aspect mentioned in your article, is the sincerity behind any endeavor. If it is a hurried eyewash before an election, like it happened previously, then it results in further drain from a depleted exchequer; but when the same expenditure happens with an eye on future growth, then the amalgamation of efforts will result in a tangible benefit of permanent value.
Dear Anil,
Informative, well researched and crisp article !! The NFHS 5 data does show positive trends as there is decline in fertility rates, access to improved sanitation has increased, but disturbing facts are also there.
Proportion of children who are underweight has increased in many states .So our welfare schemes need to focus on this crucial findings. Also gender based violence has also shown upward trends in some states .
But surely the "trickle down effect " seems to be happening in India.The pictures of three legends Charlie Chaplin , Michael Jackson and Murphy are a treat to the eyes !!