Indian welfare schemes need revamp, cash subsidies don’t help the poor


By Soheb Lokhandwala
Via e-mail
The recent economic survey in India has predicted a GDP growth rate of 9 percent that will bring cheers to a few but not everyone unless the real inclusive growth trickles down across all sections of society. Where is the roadmap to inclusiveness and distribution of the economic inequality with due equity? The inflationary pressure has brought millions more under poverty from previous 77 percent, according to Arjun Sengupta committee. The vision of the Right to Food Bill is “to provide all people at all times with sufficient, safe and nutritious food.” But  India’s food security is at stake with no vision  document for agriculture sustainability till next 20 years. We dream of 4 percent and above growth in agriculture that  totally relies on seasonal rains. If  there is no rain,  there is droughts; and  if there is more rain,  the crops are destroyed.

When India has bumper crops,  it has no enough storage capacity, and  more than Rs.50,000 crore ($10 billion) worth of food grain is destroyed every such season. India produces enough food for all. Does the government of India have a roadmap in agriculture sector for 2030? To produce enough food by  then, India must invest more in agriculture and the  rural sector.

In the health sector, India has the worst data even compared to sub-Saharan Africa. In India, 46 percent of all children are below the age of three years, 47 percent are underweight, and anemia affects 74 percent of them,  and more than 90 per cent of adolescent girls, 55 percent of women and 24 percent of men suffer from anemia. Nearly 58 percent of pregnant women are badly anemic. More than 100,000 babies die at birth every year.

Therefore,  we need to understand the concept of a welfare state that ensures to its entire population a quality life with food, clothing, housing and healthcare. To achieve that goal, India needs a futuristic roadmap.

A state is like a family where the head of family looks after everyone’s need. The family members live, eat and prosper under one roof. The head never gives family members cash, but provides for their basic needs. The federal government is like the head of the family. This head is said to be caring and loving one that looks after the welfare of his family. In a welfare state, if any member is weak and needs help he or she must be taken care  by the government.

On the other hand, if the head of the state gives away  cash to meet the daily needs of people,  that government is said to be least caring and loving. The people need basic necessities, not money. If the government provides only money or cash subsidy, then such government is called selfish, self-centered and arrogant towards people — this is  what we call in modern economics “neo-liberalism.”

A neo-liberal state is one where only the elite is served.  It is a state for the elite, by the elite and of the elite. But a  welfare state is one where everyone is served and cared for on the basis of equality and equity. If a state loves its people it will care by sharing and facing the responsibilities. Cash transfer or subsidy will only show the government of India in bad light, which is not caring for its people and shying away from its prime duties and responsibility.

The other most important thing in direct cash transfer or subsidy, the poor men can be easily lured into gambling and liquor. The only sufferers are women and their children.

The main reason given by the proponents of cash transfer is leakages in Public Distribution System (PDS) and the other to save huge spending on the process. Leakages are created by whom and who is responsible for them? The answer is simple — it is government’s failure to implement the PDS schemes. Instead of plugging the leakages, the government is opting for cash transfer. The leakages should be plugged by the state machinery itself.

If one is comparing India to the UK or any other state one should know that the UK is fully grown welfare state with minimal poverty and less income disparity, but India with huge population and great diversity is only a developing country.

India is  a poor developing so-called  “welfare state” with huge income disparities. Our trickle down mechanism has failed which needs to be overhauled and strengthened. Therefore, India should care more to the welfare of the needy and the poor by universalization of PDS, healthcare and other welfare measures that directly touch them. The poor people need much of the help from the government.

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