A new Indian welfare state2 min read . Updated: 05 Apr 2010, 09:44 PM IST
A new Indian welfare state
A new Indian welfare state
The United Progressive Alliance has been busy rewriting the rules of interaction between the Indian state and the Indian people in several important ways. It has enacted legislation that guarantees 100 days of employment on demand in rural areas and has made education a fundamental right. A law to provide food security to the poor is also in the works.
The moral case for such support is very strong. But these legal amendments will inevitably change economic incentives, increase fiscal stress and test the capacity of the Indian state to deliver on these three new promises— leading to many unintended consequences, both good and bad. Much has already been written about these issues.
The policies seem to derive their philosophical direction from the work of Nobel economist Amartya Sen, a friend and contemporary of Prime Minister Manmohan Singh. Sen pioneered what has come to be known as the capabilities approach to development. The underlying idea is that the essential goal of development is not economic growth, but an expansion in the capabilities of individuals to lead a good and productive life.
The courts have already broadened the scope of Article 21 of the Indian Constitution —on the right to life—to include issues that affect the ability of an individual to lead a life of dignity, which means access to food, medical facilities, livelihood, residence, etc. The underlying assumption in many judicial decisions is that the right to life does not only mean the right to not be killed, but also the right to lead a life of dignity. This is a vision of positive liberty as opposed to negative liberty (the absence of restrictions or violence), a distinction framed by Isaiah Berlin.
Sen and his collaborator Jean Dreze have also drawn a distinction between “growth-mediated" and “support-led" development. The first is a process by which higher growth rates create higher incomes and employment while the second is a process by which the state intervenes through health, employment and social security schemes. There are no prizes for guessing which path the current government is going down.
The capabilities approach is not without its critics, and Sen himself has pointed to several limitations. There is also little empirical proof to show that growth-led development is inferior to support-led development. Successive governments will now have to be careful in deciding which are the capabilities beyond employment, food and education that need to be given as a matter of right. Medical care? Housing? Transport? Clothing?
This could be the birth of a new statism.
Will support-led development spur growth? Tell us at email@example.com