Is India a welfare state in the true sense of the word?

If one looks at the government subsidies and fiscal deficits, one might say yes. If one looks at actual living conditions of India’s population after nearly seven decades of welfare, one might conclude otherwise.

There are other questions too. Does India know what it means to be a welfare state? Does India have the wherewithal to be a welfare state? Did we commit to the notion of welfare too early in our country’s life?

Over the years, our national policy discourse has been driven by overwhelming concern for the poor. Indira Gandhi’s call of garibi hatao in 1971 stands out in memory. As the economy grew the concern became focused on a new entity—the common man. Although there was never any clarity on who was this common man—I guess he was someone who wasn’t exactly starving yet his life was miserable all the same. This famous song from the movie Mother India best encapsulated the common man’s world view:

Duniya mein agar aayen hain to jina hi padega;

Jivan hai agar zahar to pina hi padega.

Crudely translated, it means one would have to live once one is born and one must suffer if that’s all there is to life.

So for the most part, India has dutifully suffered its existence. In fact, we tend to take pride in our ability to take suffering. We believe its shows the moral superiority of our culture and the strength of our character. Go figure.

Now of course, we have new kid on the block—the neo middle class man—thanks to that son of the soil, Narendra Modi. At the very least, this bunch rhymes better with neo-liberal policies. Presumably, the policy discourse will now be centred on this emerging entity, whose most distinguishing characteristic is that he is full of aspirations. He doesn’t want to keep ploughing the field—to borrow the imagery from the song above. He wants to move away from agriculture and the village life. He wants to live in cities, move around in metro trains and waterways. Although, oddly enough, he wants cathode ray television sets, albeit cheaper, as against the more futuristic LED sets.

He also wants to be an entrepreneur.

There is only one thing that this new creature doesn’t want—government largesse. He doesn’t want to be paid off with subsidized food, energy, education and infrastructure. He doesn’t want dole. I guess he feels confident to enter the market and make the most of it. He is raring to go out there and pay the user charges for everything he consumes. He believes markets will help him and his whole clan achieve nirvana. All markets will clear everywhere and optimum solutions will be reached.

I guess we should wind down all the subsidies. I mean, if subsidizing food for the poorest sections of the economy can be questioned, then I guess, no other subsidy makes the cut. Quite frankly, it would be morally disgusting to say that we should have subsidized infrastructure, fertilizers, cooking gas, car fuel, education, etc., if we resent subsidized food for the poorest section of the society.

But then, the neo middle class man doesn’t like it if the poorest are given subsidized food. You see, in his view, the destitute—the ones who still belong to the garibi hatao generation—becomes lazy after consuming subsidized food and loses all ambition. This is, quite obviously, terrible for the upcoming business enterprises. You see, labour costs go up and everything becomes unviable. Subsidized food is like kryptonite to the markets.

So, under the new paradigm the concept of welfare state sticks out like a sore thumb. I would not stop talking about it though, just as inexplicably as Arun Jaitley hangs on to the rural jobs guarantee scheme.

For the time being, it appears irrelevant to ask too many questions about India’s experience in providing welfare any more. Been there, done that and failed. Now we are off to market utopia.

I guess we should give it a shot. After all, how much worse can it get?

Policy Puddle will comment on public policy developments every Thursday.