India’s Shift Away from Rights-Based Welfare State

Welfare May Resemble a Gift from Political leaders: Public Policy Expert

Newsreel Asia Insight #205
April 28, 2024

India appears to be moving from a rights-based welfare model to one where welfare is presented as a benevolent gift from political leaders, with implications for the relationship between the state and its citizens, says Yamini Aiyar, a prominent public policy scholar and former President of the Centre for Policy Research in New Delhi, in an interview with the Center for the Advanced Study of India (CASI) of the University of Pennsylvania.

In the early 2000s, India started embracing the idea of a rights-based welfare state, where social policies are legally enforceable, Aiyar said in the interview with CASI Consulting Editor Rohan Venkat and which was also published by Scroll.in. This system, she said, allows individuals to claim these services from the state, ensuring a sense of accountability and a robust social contract.

During this period, India passed several landmark laws that solidified citizens’ rights, including the Right to Information Act, the National Rural Employment Guarantee Act, the Right to Education Act, and the National Food Security Act. These pieces of legislation redefined welfare as a right, allowing citizens to hold the state accountable for delivering basic services.

However, after the 2014 political transition, India saw a significant shift in its approach to welfare. The new administration’s focus turned to efficiency, technology and market mechanisms.

The biometric identification system of Aadhaar facilitated electronic delivery of welfare benefits through Direct Benefit Transfers (DBT). This system was promoted to improve efficiency, reduce corruption and streamline welfare delivery.

Additionally, the shift from direct state provision to cash transfers allowed citizens to use cash in the marketplace, suggesting that the private sector could deliver basic services more efficiently. This model typically places the public sector at the center of welfare delivery, with clear government responsibility for ensuring that citizens receive these benefits.

Instead of providing specific services or goods, the government gives citizens cash. This allows recipients to use the money in the marketplace to meet their needs, such as buying food, paying for healthcare or acquiring educational resources. The underlying idea is that cash provides more flexibility and choice for individuals, who can spend it according to their priorities.

When cash transfers are used, it suggests that the private sector might be more efficient in delivering certain services. Cash gives recipients the freedom to shop around, promoting competition among private providers. This competition could lead to better quality, innovation and efficiency, as businesses vie for customers. The government still plays a role, but it’s more about overseeing cash distribution than directly providing services.

However, this shift has led to a change in accountability. With direct state provision, citizens can hold the government accountable if services are inadequate. There’s a clear link between citizens’ rights and government responsibility. When cash transfers are used, this link weakens. Citizens become passive recipients of benefits, with less direct engagement with the state. The focus shifts to efficient delivery rather than ensuring citizens’ rights.

As a result, the accountability mechanism changes: technology-based welfare tends to emphasise efficient administration, but it can also distance citizens from actively claiming their rights. Instead of holding the state responsible for service quality, citizens might find themselves at the mercy of market dynamics, which can be unpredictable and driven by profit motives.

Besides, with direct benefit transfers, the focus shifts to individual beneficiaries receiving their entitlements. While this might improve efficiency, it can also reduce opportunities for collective action, where groups of citizens can come together to demand accountability. This diminishes the sense of community-based claim-making, reducing pressure on the state to maintain high standards of accountability.

Further, if a government focuses on technological solutions for welfare delivery without stressing the legal rights that underlie these programs, citizens might begin to view welfare as a service rather than a right. When citizens perceive welfare as a service provided by the state, they are less likely to see it as something they can claim or demand, thus reducing accountability.

Politicians often highlight cash transfers or welfare benefits in their speeches, suggesting that these are provided due to their efforts. This messaging creates a perception that welfare is a gift from the political leadership rather than a legal right, reinforcing a sense of dependency on political leaders.