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Welfare Promises
Context:
The allure of promising “too much, too soon, with too little” is a familiar strategy for politicians seeking to mobilise votes, particularly among the poor.
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- This tendency is further fueled by a shifting perception of what constitutes a decent standard of living, influenced by the changing socioeconomic profile of poverty.
- In 1990, nine out of ten of the world’s poor lived in low-income countries.
- Today, three-quarters of them reside in middle-income nations.
- In such nations, the moral obligation to assist the poor is intensified by electoral dynamics in democracies.
- Recent state elections in India have seen political parties pledging an array of welfare schemes, including enhanced cash transfers for women, free gas cylinders, electricity for farmers, farm loan waivers, free food packets, smartphones, and scooters for women.
Constitutional provisions for a welfare state
Preamble
- The Preamble to the Constitution describes India as a “Sovereign Socialist Secular Democratic Republic,” emphasising the commitment to social justice and equality.
- The inclusion of “socialist” in the Preamble reflects the aim of reducing economic inequalities and ensuring a fair distribution of resources.
Fundamental Rights (Part III)
- Right to Equality (Articles 14-18): Ensures equality before the law and prohibits discrimination on various grounds.
Directive Principles of State Policy (Part IV)
- Article 38: Mandates the state to promote the welfare of the people by securing a social order where justice—social, economic, and political—pervades all institutions of national life.
- It emphasises minimising inequalities in income and status among individuals and groups.
- Article 39: Ensures adequate means of livelihood for all citizens, equal pay for equal work, and opportunities for healthy development of children.
- Article 41: Guarantees the right to work, education, and public assistance in certain cases, reflecting the state’s commitment to providing basic needs.
- Article 42: Provides for just and humane conditions of work and maternity leave for women.
- Article 43: Aims to secure a living wage and decent standard of living for workers.
- Article 46: Promotes educational and economic interests of Scheduled Castes (SC), Scheduled Tribes (ST), and other weaker sections of society.
Are Welfare Promises Becoming Unrealistic?
- While welfare initiatives are essential, the feasibility of delivering such extensive promises raises concerns.
- For instance, government hospitals offering free medical treatment often struggle with overcrowding, long waiting times, and limited resources.
- The gap between promises and delivery highlights the impracticality of such initiatives when scaled up too quickly.
- Most agree that the poor should receive basic necessities like free food and medical care.
- However, the challenge lies in accurately identifying the beneficiaries.
- In a largely informal economy, determining income levels is difficult, and political incentives often discourage stringent eligibility assessments.
- For example, appeals for wealthier individuals to forgo LPG subsidies have seen limited success, with only 10.3 million out of 247.2 million active customers voluntarily surrendering their subsidies in 2021.
Targeting Challenges
- Effective welfare distribution faces two types of errors: exclusion, where deserving individuals are left out, and inclusion, where ineligible individuals benefit.
- Fear of political backlash often leads to prioritising the avoidance of exclusion errors, resulting in widespread inclusion errors that strain resources.
- A prominent example is the Pradhan Mantri Garib Kalyan Anna Yojana, which provides free food grains to over 810 million beneficiaries at an annual cost exceeding ₹2 trillion.
- Critics argue that such broad schemes resemble universal basic income programs and question their fiscal sustainability without increased taxes or reduced capital investment.
Unintended Consequences of Excessive Promises
- Corruption and Scarcity: When demand for subsidised goods or services outstrips supply, corruption thrives.
- Middlemen, bribes, and black-market activities become common, eroding social values.
- Perverse Incentives: The scarcity of benefits encourages further overpromising, benefiting vested interests but worsening the resource gap.
- Impact on Productive Investment: Excessive spending on welfare can divert funds from critical areas like education, healthcare, and infrastructure, undermining long-term growth.
- Erosion of Trust: Repeated failures to deliver on promises diminish public trust in political parties, making sincere governance efforts less credible.
- Fiscal Challenges in States: Recent experiences in Himachal Pradesh, Telangana, and Karnataka illustrate the financial strain caused by ambitious welfare promises.
Learning from Experience
- The fiscal difficulties faced by these states serve as a cautionary tale for other regions.
- While addressing poverty and inequality is a moral imperative, sustainable planning and realistic commitments are essential to avoid economic and social fallout.
- Political parties must balance electoral ambitions with pragmatic governance, ensuring that promises align with fiscal capacity and genuine need.
