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As Prime Minister Narendra Modi marks his first year in power, all that can be said of his administration’s social policy agenda is that it is made up of a cacophony of catchy slogans: “Swacch Bharat”, “Poverty Elimination, Not Alleviation”, “Housing For All”, “Smart Cities”, “JAM Trinity”, “Adarsh Gram”. Add these slogans up and the country is left searching for a coherent vision, strategy and implementation plan.
Sloganeering apart, one interpretation of this government’s approach to social policy is that it quite simply doesn’t want to have one. This view has gained ground in light of the squeeze on social sector spending in the 2015-16 budget. But the reality of the Modi government’s failure to plan, articulate and finance a coherent social policy agenda is far more complex than a straightforward desire to shut down India’s welfare state. Rather, its roots lie in a failure to build political consensus, and arguably for the Prime Minister himself to make up his mind on the shape and form that India’s welfare state ought to take.
In the run-up to election 2014, political scientist Milan Vaishnav made the insightful observation that while Modi’s campaign may have privileged a rhetoric of growth over redistribution, in its actions, his party remained far closer to the United Progressive Alliance’s (UPA) vision of an entitlement-based welfare state.
This was evident in the Bharatiya janata Party’s (BJP) manifesto that promised to expand education expenditure and ensure universal health coverage, the party’s willingness to support the UPA’s rights legislations in Parliament (in fact much of the opposition was aimed at broadening rather than narrowing the scope of these legislations) and the fact that BJP-ruled states did a far better job of implementing the UPA’s rights agenda than Congress states.
Once in office, the tensions between these two perspectives have become sharper, resulting in a set of contradictory pulls and pressures that have severely undermined the UPA’s rights framework without proposing a credible alternative. The UPA’s schemes haven’t disappeared, but implementation has weakened and the result has been disastrous for social policy.
Take, for instance, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)—a programme that was emblematic of the UPA’s rights-based approach to welfare. Despite the occasional threat, the government has stopped short of radically re-hauling or dismantling the programme. Yet, rather than investing in what the programme really needs—improving implementation, streamlining payments, expanding the budget—the government has restricted entitlements and budgetary allocations, resulting in increased delays in wage payments. Consequently, employment through the MGNREGA is at an all-time low. So, while the MGNREGA has survived, it has been robbed of its potential. The irony is that despite this lukewarm approach to MGNREGA, newspaper reports suggest that the programme may well feature in the NDA’s list of achievements as it completes one year in office.
To the extent that an alternative has been proposed, the emphasis has largely been on cash transfers delivered through the JAM (Jan Dhan-Aadhaar-mobile) trinity. But for the moment, and much to the dismay of many advisors within and outside the government, far from using cash to redefine the architecture of social policy based on the principles of basic income support and the transfer of purchasing power, and debating the merits and demerits of cash transfers from this perspective, cash is being deployed primarily as an instrument of streamlining delivery for subsidy programmes. And in doing so, the government is making the cardinal error of assuming that cash can be a substitute for governance. Streamlining delivery requires more than simply changing the nature of what is delivered. It requires negotiating complex governance tasks like getting targeting right, adapting to market fluctuations, dealing with supply constraints and low administrative capability. What is needed is investment in building a governance structure that is equipped to learn and innovate rather than mere tweaks in the instruments of delivery.
To be fair, the Niti Aayog, through its proposal to marry multiple databases including the socio-economic census and build a basket of indicators is moving the needle on targeting. But the implementation bottlenecks are significant and we are still a few years away from integrating this approach with the delivery system. Another interesting development is the recent launch of social insurance schemes. Although not new, the high-decibel launch marks a more pronounced emphasis toward a co-contributory model of welfare protection than seen in the past. Whether, in the long run, this is a complement or a substitute to the existing basket of welfare schemes remains to be seen.
While the approach to MGNREGA and cash is muddled, on health and education, the government seems completely out of its depth. Although health policy made headlines for budget cuts earlier this year, the real misstep has been the absence of a coherent policy framework. The attempted restructuring of the UPA’s National Health Mission into a universal health assurance scheme and the deeply flawed national health policy initiated in the early days of this government seem to have disappeared without a trace. On education, the human resource development (HRD) ministry has a unique opportunity to build an agenda that addresses India’s widely acknowledged learning challenge and link this with the government’s skill development mission. But rather than develop policy, the HRD ministry has spent its first year oscillating between controversies that have undermined its credibility.
Amid all this confusion, this government has been at the forefront of one definitive, game-changing structural shift that can significantly alter the landscape of social policy in India: the implementation of the 14th Finance Commission’s recommendations to enhance devolution to states. The Modi government now has a unique opportunity to reshape itself from the narrow domain of designing and financing schemes to being a repository of knowledge and innovation that shapes the contours of a national political consensus on the architecture of the welfare state. But, barring a few tweaks in the financial structure of centrally-sponsored schemes, there is little in the current response to suggest that the government has even begun to grasp the potential of the opportunity its been presented with.
As the PM begins his second year in office, the combination of unseasonal rains, a potentially weak monsoon and declining rural wages are set to aggravate the rural crisis. Resolving this crisis requires bold, imaginative leadership that can build a consensus on the future of the welfare state. Investing in MGNREGA ought to be the first step. The country needs action, not slogans.
Aiyar is senior research fellow, Centre for Policy Research, and director of the Accountability Initiative.