Happy Republic Day: Can India ever become truly Inclusive?

Clearly inspired by the French Revolution, the Preamble to the Constitution of India reads:

WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its citizens:

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity; and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of the Nation;

IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do

HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.

As it took 2 more months for India to formally become a Sovereign Republic, we celebrate Republic Day on the 26th of January every year, with a grand parade in New Delhi, usually with a foreign Head of State as Chief Guest. The entire parade, works the theme of Unity in Diversity to death, and brushes under the carpet the great dissensions, differences, divisions and disparities which plague us even 68 years later.

This year however, the Government of India scored several own goals in the week leading up to the Republic Day. Firstly, the PM a la Marie Antoinette said in an interview, ‘They have no jobs? Then let them sell street food to survive…’. Then, in the face of gross government inaction, protesters against a movie actually stoned a school bus full of terrified children; and finally, Oxfam published its Commitment to Reducing Inequality (CRI) Index Report, which ranks not India but the INDIAN GOVERNMENT at a pathetically low 132 – all this, while the PM was exploring in Davos, ways to make India’s rich richer.

Indian voters are said to exercise great freedom of choice each time they throw out the incumbent and bring in a new regime, which spends the first 2 years blaming the ‘legacy’ issues for its non-performance, and the last 18 months preparing to overcome its own incumbency factor before the next election. So the best time to judge a Government’s performance is in its third year – and that is why the present Government is facing severe scrutiny on every front: economic, governance and development.

This dear reader, is why Oxfam’s CRI Index is so damning – because it measures the commitment of current governments, and this cannot be fobbed off by stories of ‘inherited’ problems, historical inequality, the caste system, the British colonial rule or whatever. This is the here and now and the present government is answerable – not its predecessors of any shape or colour.

Interestingly, this Republic Day, the parade in Delhi had not one, but a clutch of Chief Guests – the Heads of State of ASEAN – who are in Delhi for a meeting. So how does India compare to the 5 founding members of ASEAN on the CRI Index? Let’s see…

Country Spending on Health, Education, Social Protection Rank Progressive structure and incidence tax Rank Labour market policies to address inequality Rank Total CRI Rank
Thailand 61 22 136 70
Singapore 65 105 96 86
Indonesia 121 34 114 101
Philippines 101 80 122 104
Malaysia 96 30 135 106
INDIA 149 91 86 132

Oxfam India offers blunt advice to the Government of India on how to improve its CRI ranking:

Create an economy for all: Promote inclusive growth by ensuring that the income of the bottom 40% of the population grows faster than of the top 10% so that the gap between the two begins to close. This can be done by:

  • Promoting labour-intensive sectors that will create more jobs
  • Investing more in agriculture
  • Implementing fully the social protection schemes that exist

Seal the leaking wealth bucket: Reduce extreme wealth and create a more equal opportunity country.

  • Tax the super-rich by re-introducing inheritance tax and increasing the wealth tax
  • Reduce and eventually do away with corporate tax breaks
  • Take stringent measures against tax evasion and tax avoidance
  • Increase public expenditures on health and education

Bring data transparency: Produce and make available high quality data on income and wealth, and regularly monitor the measures the government takes to tackle the issue of rising inequality.

In other words, go for INCLUSION. But does a government whose basic ethos is exclusivist and divisive, even begin to understand what inclusion means in modern development jargon, let alone devise and implement policies to bring it about in this most unequal of societies? (Who can forget Dumont’s classic definition of the species of humans in this society as Homo Hierarchicus?)

It is time indeed to truly understand this concept in all its dimensions because it is the development phrase du jour and crops up in the UN’s Sustainable Development Goals, in the Smart Cities projects, and so on…

The best explanation I have come across recently is in a World Bank Report East Asia and Pacific Cities – Expanding Opportunities for the Urban Poor. Incidentally, the Report covers the ASEAN countries mentioned above, besides China and Japan – home to the largest single city and urban agglomeration respectively. It begins with giving due credit to the East Asian countries in drastically reducing urban poverty, and any traveler there  will indeed vouch for the much better living conditions of the urban poor in East Asia, than in South Asian cities in India, Pakistan and Bangladesh.

The writers of the report explain the expanding opportunities for the urban poor by consciously inclusive policies introduced by their governments.

They identify three dimensions of inclusion:

Economic Inclusion: refers to equitable access to jobs and income-generating activities, mechanisms of resilience to withstand shocks and removal of barriers to formal employment

Spatial Inclusion: links equitable access to land, housing, infrastructure, and basic public services. Mobility is particularly important, given its role in connecting low-income residents to jobs, services, and amenities. Housing must be accessible, affordable and ensure good quality and safety

Social Inclusion: relates to individual and group rights, dignity, equity, and security

This Multidimensional Framework of Inclusion is graphically depicted in the report as under:

Multidimensional Model of Inclusion

What is noteworthy is that the three dimensions overlap, and government interventions cannot be designed and implemented piecemeal. We have seen the havoc caused to the environment in Gujarat in the name of ‘development’ during the last two decades, and a similar short-sighted approach to inclusion may end up as nothing more than ‘including’ India’s entire billion-plus population in an electronic, biometric database which is being regularly hacked, misused and abused.

If the Government of India doesn’t show a greater commitment to long term investments in Education, Health and Social Protection, doesn’t introduce a more just taxation system, and doesn’t formalise the rapidly growing informal sectors of the economy and society, well then organisations like Oxfam will not keep quiet and India’s international credibility will take a further beating…

 

 

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Development? Governance?

After 75 posts on this blog, one may be forgiven for sitting back and letting readers explore whatever was said over the last three years. I am gratified that various search engines have serendipitously landed people from over 132 countries on this site, and many have bookmarked it and returned to browse from time to time. Thank you.

However, a WordPress notification wished me a happy anniversary, and I revisited the ABOUT page to check out my original motives for starting this blog: to explain the much misused terms of governance, corruption and development being arbitrarily thrown about in India’s political discourse at the time of the 2014 election, which brought to power a conservative, right-wing, market friendly party (the BJP) and routed the old establishment party – the INC, or Congress (please note this is not the legislative body it is in the US, but a political party in India.)

So let us indeed look at how these concepts have evolved and are understood, 42 months down the line:

Governance: I had covered the theory of Good Governance in one of my earliest posts, where I explain the relation between governance and government, and explain the globally accepted criteria for good governance: Good Governance

However, it has totally escaped this regime that government is subsumed within governance which has the empowered citizen at its heart. There is a similar ignorance of concepts like rule of law, consensus orientation, probity, code of ethics, freedom of information, conflict of interest, protocol, chain of command etc. As a result, the present government doesn’t score too well on providing either efficient and effective government, or participatory, accountable, responsive, transparent, inclusive or equitable governance.

The shortcomings of the ruling cabinet in terms of education, experience and exposure are very evident in the fact that almost ALL of the schemes and programmes of the previous government have been continued with NO substantive change except in their names. Never mind that most of these programmes had huge flaws which this cabinet of innocents continues to propagate. But if you throw out the baby (research, monitoring and evaluation wing) with the bath water (Planning Commission) who will point out these flaws and suggest ways to correct them? Instead, by farming out evaluation of important and costly schemes to private consultants, Indian data has lost a lot of its credibility among multilateral research organizations, and gained no real insights for future policy formulation.

Other institutions are also being undermined – whether the Reserve Bank of India, the Election Commission, or various federal and state investigative agencies. Further, the federal structure is itself under threat as decision making has become non-consultative and centralized (e.g. demonetization), and financial allocations to State Governments are becoming increasingly politicized – being used in election campaigns as threats or promises.

Corruption: The entire corruption narrative in India is limited to favours granted in return for bribes/cash. This is rather simplistic, and if it affects the common man then this type of corruption continues unabated among the petty bureaucracy no matter which party is in power. That is a fact of life in India. I had tried to broaden this debate by showing how capture and clientelism are equally detrimental to national interest (The 3 Cs- Corruption, Clientelism, Capture). Three years on, the great Indian people are at last getting to understand what is meant by ‘capture’ or crony capitalism as our social media prefer.

But clientelism remains more elusive – the best example of that is seen during elections in largely rural States like UP, where a village chief or mukhia can deliver an entire village’s vote for a promise of future personal benefit – like a share in a Central Government infrastructure project, or a ticket in the next State election. As this pattern of bottom up electoral victories is repeated, we will all get a better understanding of clientelism. It is noteworthy that virtually nobody has been brought to book, or even formally charged, in the various ‘scams’ the previous government and its coalition partners were allegedly guilty of – again clientelism in action: support us today and go scot free tomorrow. Simple.

Development: I had sarcastically hinted that development would be reduced to acquiring bullet trains, never dreaming how true this would be – literally! Never mind that the rest of the country’s infrastructure is among the poorest globally. Of course, this reduction of all ‘development’ to physical infrastructure, ignoring concepts of ‘human development’, will remain the most damaging legacy of the present government, as it will become the key deciding factor in 2019, as it was in 2014.

This tunnel vision is coupled with attitudes of climate change denial and loosening of ecological regulations in the sanctioning of megaprojects and it augurs ill for India’s achievement of the UNDP’s Sustainable Development Goals – which would be a tragedy, because India had done better than expected in the previous Millennium Development Goals. Interestingly, attempts to achieve the MDGs and thus governance in favour of the poor and disadvantaged, necessarily pushed the UPA Government and the Congress Party to the ideological Left and away from their 1991 image of pro-free market globalists. And in my humble opinion, this was the real cause for the Congress Government’s defeat in 2014.

The Indian electorate was not tuned to fashionable ideas like the Rights Approach to development…

You see, the disgruntled middle level ‘dominant castes’ in India have such a sense of entitlement that they see any action in favour of the poor, the disadvantaged and minorities as appeasement and will not allow rights-based programmes to succeed. Sadly, even in 21st Century India, your politics and opportunities continue to be decided by an accident of birth.

I had clarified in an earlier post (India an Aspirational Society? Not yet… ) that India would never be a truly ‘aspirational society’ without greater equality, better distribution of wealth, unity of purpose and civility. Sadly, all these ideals are in tatters just three and a half years down the line, and Indian society and polity have never been as divided, discriminatory and raucous as they are today.

One consequence of these attitudes has been the conscious marginalization of India’s poor, which now manifests itself in greater hunger, deprivation, malnutrition, higher school dropout rates, poorly educated human resources, increase in child and forced labour, distress migration, farmer suicides and ever greater informalisation of the economy, livelihoods, and urban housing. And frankly, nobody in power gives a damn. The Opposition too is patently moving from the Left to the Right of Centre, with the entire electoral focus shifting to businesses and the ‘entitled’ middle castes (as in Gujarat), with no mention at all of the poor…


Sadly, it is this disempowered but enfranchised section of the population who can even now deliver the votes needed (a mere 31%) to elect the next government. All that the incumbents have to do is use the standard right wing tools of diversion, emotion, commotion, coercion and subversion to ensure another term. These are the means which bring and retain the neocons in power from North to South America, to Israel to South East Asia…

But is this democracy, you may wonder… Of course it is. Because what else will give us the ‘moral’ high ground vis-à-vis autocratic China and Russia ? (I am sure this resonates a bit with my American readers too…)

 

Formalizing the Informal – the only economic reform that matters

Two incidents last week: a friend’s enthusiastically launched ‘start-up’ is downsizing in less than a  year and will probably become ‘stop-down’ soon; and another friend’s 16 year old but spacious flat has been attracting great interest from the local small businessmen, even before she has put it on the market. In other words, the money in India is inexorably moving from the formal to the informal sector. With the advent of a hefty Goods and Services Tax, the situation will only get worse. And there is little the Government can do, or is willing to do, to stop this leaching away of its legitimate tax revenue.

Given that its traditional support base has always been the urban business class, the ruling party is unlikely to take stringent action against this class which is the biggest beneficiary of that twilight zone of the informal sector that now covers over 68% of the economy of India’s commercial capital – Mumbai.

By promising greater ease of business to attract domestic and foreign investors, the business-friendly and business-financed central government has weakened the regulatory framework to such an extent that it has opened the floodgates for environmentally irresponsible infrastructure projects, and the exploitation of child labour – now legitimized by allowing children to work in family businesses or ‘learn’ traditional crafts. (Though there is hardly any skill or craft to be learnt, at the cost of regular schooling, to serve tea in your uncle’s roadside cafe, is there?)

Not quite familiar with consumer preferences in the West and the growing importance of ethical supply chains (especially among EU importers), both the Indian Government and the Indian business community are at a loss to understand why foreign direct investment in the country continues to remain sluggish.

But domestic consumption continues to grow and this demand is increasingly being met by informal and semi-informal enterprise, both in services and light manufacturing. As a result, quality and safety standards are readily sacrificed to cut costs. Ever wondered why a plumber or carpenter brings along a drill with bare leads which he pushes into the nearest electric socket? Because there is no standardization in the electric fittings produced cheaply in some back alley, and no two plugs/sockets in India will ever be compatible… This haphazard style of ‘making do’ with whatever is available then gets eulogized in management books as the inherent Indian genius of ‘jugaad’ while its corollary of ‘Chalta hai’ or ‘anything goes’ is blamed for every social evil from corruption to traffic snarls… God save us from management gurus.

But what of the workers in the informal sector? Most of them are likely to be poor male migrants from the North, with little education and only the skill of their specialization – which means they are exclusively employed in the construction, interior design or garment sectors. They also tend to belong to the lower castes and religious and ethnic minorities who have few opportunities for education and development on their home soil. They are ready to live and work in abysmal conditions so long as they make good money, to look after their families back home. In essence, as the informal sectors of the economy expand, so do the slums and informal settlements in a city – with all the concomitant consequences of anomie, alienation, violence and crime.

And as the formal sector keeps shrinking under the onslaught of the informal, the job market shrinks, and those lucky enough to be born into a higher caste/class and able to afford the qualifications to work in the formal sector, are so grateful to find a job – any job – that Indian workers report the greatest sense of well-being in their jobs, while paradoxically also being the hardest working, as these two Statista infographics indicate:

Percentage expressing well-being at work:

STATISTA WELL-BEING AT WORK

Working hours of Millennials (20-34 age group):

STATISTA WHERE MILLENNIALS WORK LONGEST HOURS

The point is that no amount of policy tweaking can swing a country’s economy this way or that because the way the economy works is inexorably tied to the way that society is organised. And all economic reform must necessarily be underpinned by social reform – greater equality of opportunity, inclusion, universal education, equitable regulation … and so on…

 

The Digital Divide

The World Bank’s World Development Report 2016 looks at Digital Dividends. It explores the impact of the internet, mobile phones, and related technologies on economic development. The Report lists digital dividends as growth, jobs, and services. It explains how digital technologies help businesses become more productive; people find jobs and greater opportunities; and governments deliver better public services to all.

By reducing information costs, digital technologies greatly lower the cost of economic and social transactions for firms, individuals, and the public sector. They promote innovation when transaction costs fall to essentially zero. They boost efficiency as existing activities and services become cheaper, quicker, or more convenient. And they increase inclusion as people get access to services that previously were out of reach.

The Report lists the dividends of digital technology as follows:

Dividends of Digital Technology WDR2016

It goes on to point out that these dividends are not as widespread as expected because:

  1. Nearly 60% of the world’s people are still offline and cannot fully participate in the digital economy. There also are persistent digital divides across gender, geography, age, and income dimensions within each country.
  2. Some of the perceived benefits of the internet are being neutralized by new risks, such as vested business interests, regulatory uncertainty, and limited contestation across digital platforms, leading to harmful concentration in many sectors.

Risks of Digital Technology WDR2016

 

Moreover, quickly expanding automation, even of mid-level office jobs, could contribute to a hollowing out of labour markets and to rising inequality. And the poor record of many e-government initiatives points to high failure of ICT projects and the risk that states and corporations could use digital technologies to control citizens, not to empower them.

There is an interesting graphic of a typical day in the life of the Internet, which clearly tells you that even with extended connectivity, only a miniscule minority of the 40% of the world’s people who are on-line, are using the internet to its full potential:

A typical day in the life of the Internet WDR 2016

 

The Report concludes that enhanced connectivity is vital, but not enough to realize the full development benefits. “Digital investments need the support of analogue complements: regulations, so that firms can leverage the internet to compete and innovate; improved skills, so that people can take full advantage of digital opportunities; and accountable institutions, so that governments respond to citizens’ needs and demands. Digital technologies can, in turn, augment and strengthen these complements—accelerating the pace of development.”

As is its wont, the World Bank seeks solutions from governments and its institutions, never asking essential (if embarrassing) questions about the social milieu where development is a desired objective.

Take the case of India, where for millennia, society has been divided along caste, class, ethnic and religious lines, and where access to the basic elements of development – such as education and health – is often decided by one’s social status, often ascribed by birth and therefore immutable. The digital divide so clearly visible in India cannot be bridged without tackling the underlying social and economic divide throughout the country.

So perhaps a government given to pithy sloganeering should first promote a casteless India, an equitable India, an educated India, a healthy India and only then look for a digital India. Or  failing that, leave behind a legacy of greater inequality, greater marginalisation, concentration of wealth in fewer and fewer hands, and greater social malaise, intolerance and deprivation than it inherited from its predecessors…

Convention 189 on Domestic Workers

The outrage caused in India when a Saudi employer chopped off the hand of his 58 year old female domestic worker made the headlines for exactly a day and a half in the victim’s home country. The twitterati, who set the news agenda, quickly moved on. After all, which Indian (or Pakistani, or Afghan) will cast the first stone?

This is the region where the underclass has been ill-treated, raped and abused incessantly for centuries, if not millennia. An abuse justified by the pernicious caste system and the feudal mindsets of the region. In recent years, even the diplomats of these countries have got into all sorts of trouble wherever their ‘servants’ have been brave enough to seek justice in the host country, but these cases are few and far between. The overwhelming majority put up with this abuse generation after generation, because they are conditioned from birth to expect nothing better – deprivation piled upon deprivation are their ‘fate’ and ‘destiny’, after all…

I was just wondering about international mechanisms to deal with this sustained exploitation and abuse of domestic workers across borders, when I received a mail from walkfree.org about exactly such an ILO mechanism, known as Convention 189 and its lamentably low ratification by the countries of the world.

The rationale for a Convention on Decent Work for Domestic Workers is:

  • Recognition of the significant contribution of domestic workers to the global economy through substantial income transfers within and between countries
  • The undervaluation and invisibility of domestic workers at large, and especially of women and children so employed
  • The fact that in developing countries with historically scarce opportunities for formal employment, domestic workers constitute a significant proportion of the national workforce and remain among the most marginalized
  • The special conditions under which domestic work is carried out that make it desirable to supplement the general standards for all workers with standards specific to domestic workers so as to enable them to enjoy their rights fully

Convention 189 draws upon all other relevant international instruments such as the Universal Declaration of Human Rights, the Protocol to Prevent, Suppress and Punish Trafficking in Persons, the Rights of the Child, and the International Convention on the Protection of the Rights of All Migrant Workers… and many more.

It entered into force on 5 September 2013.

The Convention was initiated by the Philippines, probably for the very good reason that a large number of Filipinas are employed as domestic workers in the Gulf region, and there are constant stories of abuse in the local press ­­- yet the desperate keep seeking employment there. And Philippines remains the only Asian country among the Convention’s paltry 22 ratifiers – shame Asia, and North America. Understandably, the rise of left-wing Governments in South America gives that continent the best record in this case, with Uruguay being the first to ratify Convention 189 on Decent Work for Domestic Workers.

ILO Convention 189 Ratifiers


 

And what about India? At the time of Independence, visionaries like Nehru and Kidwai succeeded in giving India one of the most compassionate and pro-worker set of Labour Laws, and India was at the forefront of enlightened labour legislation and at the ILO. But its record has been steadily blemished since 1991 when it jumped on to the unquestioned globalization bandwagon: Out of the 43 ILO Conventions and 1 Protocol ratified by India, 42 are in force, 2 Conventions have been denounced; BUT none have been ratified in the past 12 months.

What a sorry landmark for the current Government to achieve…

Why am I not surprised?

Independence and Globalization

As someone born long after India gained Independence, one heard of Jawaharlal Nehru’s first Independence Day speech only from one’s elders and betters and got to actually hear it years later, only after the advent of the Internet. That scratchy recording from the radio archives; that emotion-laden voice, on the verge of breaking; those extempore words in an alien language…

“Long years ago we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance. It is fitting that at this solemn moment, we take the pledge of dedication to the service of India and her people and to the still larger cause of humanity.”

And what a pledge it proved to be! Nehru had inherited a partitioned land, a ravaged countryside, little or no manufacturing industry and famine stalking the masses at every turn. His first task was to interpret independence as self-reliance and address the abysmal poverty of the common Indian. Hence the Green Revolution to provide basic food security, and setting up of mega industries in the public sector, to provide employment in urban areas.

In tandem was the establishment of the Indian Institutes of Technology, the Indian Institutes of Management, the National Defence Academy, and scientific research institutions like the National Laboratories, TIFR, BARC, ISRO and many more.

Internationally, Nehru’s vision of Non-alignment protected India from the worst excesses of the Cold War, wreaking havoc all around us – South-East Asia, Africa and Latin America. Of course, the devil is always in the detail, and man is mortal, so Nehru could not redeem his pledge in its entirety, but he did leave behind a legacy of vision and daring.

So what happened to derail Project Independent India? In a word – globalization. Ever since India chose this path, one has not heard any Prime Minister either make a pledge to the people of India, or show the courage to go it alone in the interests of the country. We are all too busy chasing Foreign Direct Investment and let the devil take the hindmost…

In reality, the globalized world economy has deeply fragmented production processes, labour markets, political entities and societies, creating a plethora of interest groups and lobbies which have undermined the integrity of civil society and its rights and entitlements across the world. This is becoming increasingly visible in rich and poor countries in the form of growing disparity between places, people and groups. In India, globalization is manifested in much greater income inequalities and growing agrarian distress.

In the international realm, the once proud Indian foreign office bows quietly to Washington in voting or abstaining on UN resolutions, and surrenders quietly to tough terms of international trade. Globalization, spearheaded largely by MNCs, now decides which domestic land laws need to be amended and which social issues can be ignored – like child labour, informalisation of urban economies, land rights of indigenous people, deteriorating health and education, pollution, environmental degradation and so on…

Advocates of globalization claim that greater international connectivity has enhanced accountability of governments. True. But the global elite still get away with murder – they call it collateral damage, of course. The UN bodies, International Courts of Justice and other fora are as biased in favour of the West as before, so what has really changed for the better?

The recent referendum in Scotland was precisely about this – globalization or independence? As is the ongoing ideological conflict in Greece. And look what happened there – economically weaker countries have quietly given up the battle and taken their humble places in the new global pecking order, and all’s well with God’s Earth! Even that bastion of hope – Cuba – is in a hurry to jump on to the globalization bandwagon… apparently globalization is as inevitable as death and taxes.

So as India celebrated its 68th Independence Day this August, isn’t it time to take stock of where we are headed and why? To whose benefit? And at whose cost?

It is time for India to break out of this global thraldom, and awaken once again to life and freedom…

Social Security Nets as guarantors of Human Development

Whenever one talks of sustainable livelihoods, we look not only at the 5 types of assets of a community or individual, but also at their coping strategies. Thus vocational diversity in a farming family will cushion it against a bad crop or a natural disaster, or the sudden death of the principal breadwinner. At the national level, the coping mechanism is provided by the state in the form of social security nets like unemployment benefits, health care, free education, pensions or child benefits.

The second edition of The State of Social Nets which attempts to compile, analyze, and disseminate data and developments as part of the World Bank’s 2012–22 Social Protection and Labor Strategy, makes for interesting reading, and its key findings are summarized below:

  • The portfolio of social safety net programmes is large and diverse. A developing country runs about 20 different safety net programmes, on average.
  • Cash transfers and school feeding programmes are present in almost all countries. Cash transfers are becoming more popular and increasingly complex. Conditional cash transfer programmes are now present in 64 countries, a dramatic increase from 2 countries in 1997 and 27 countries in 2008.
  • Worldwide, 1.9 billion people are enrolled in social safety net programmes.
  • The world’s five largest social safety net programmes are all in middle-income countries and reach over 526 million people.

It was also noted that the social security programmes and composition of social spending varied greatly across regions, as seen below:

Social Security Nets

However, the Report  found that despite remarkable progress over the past 5 years, most of the poor remain outside the social safety net system, especially in low- and lower-middle-income countries, which have the lowest coverage levels of poor people in their societies, and the least ability to direct resources to those most in need. The coverage gap is particularly acute in Sub-Saharan Africa and South Asia, where most of the global poor live. In these regions, only one-tenth and one-fifth of the poorest 20 percent have access to social safety nets, respectively. Urban areas have serious gaps in coverage, at all income levels. While 285 million poor people live in cities in developing countries, reaching them presents special challenges, including identifying, targeting, communicating with, and enrolling perspective beneficiaries.

In this writer’s own experience, the National Social Assistance Programme (which consisted of a nominal pension to the poor above the age of 65) showed very good results in rural areas, but was absent from the big metros, chiefly because the pension was disbursed through money orders, and the urban poor being homeless, simply did not have a postal address! Such procedural lapses are the chief cause that the social security coverage of the poorest in developing countries remains inadequate. Take the latest case of cheap loans for farmers, which have been cleverly diverted to non-farming uses. Firstly, as these loans use land as collateral, the poorest landless tenant farmers are not covered; and as the scrutiny before granting loans is cursory at best, a lot of these loans end up in Fixed Deposits earning the borrower anything from 8-9% interest, while he pays no more that 4% on his loan.

To plug such loopholes, many countries are increasingly looking to Unconditional Cash Transfers (UCT) and Conditional Cash Transfers (CCT). This strategy has several additional benefits, as the Report points out: “Newer studies confirm the positive and significant impacts of cash transfers on school enrollment and attendance; increased live births in safer facilities; improved prenatal and postnatal care; regular growth monitoring of children during critically important early ages; and enhanced food security.”

The studies also delve deeper into the productive impacts of cash transfers, demonstrating how predictable cash transfers enhance households’ investment in activities to generate agricultural and nonagricultural income. In the urban context, a secure and predictable monthly income can mean the difference between shelter and homelessness, between education and illiteracy, between health and illness. Cash transfers also have major positive spillover effects on the local economy of target communities, especially in urban areas.


Sadly, India is now ignoring all these benefits and the new government has ruthlessly slashed social expenditure in its last budget. What is frightening is that the eternal chase for higher growth rates (with a matching aversion to any form of subsidies and direct cash transfers, which are now being replaced by contributory insurance schemes), may rapidly undo all the gains in the areas of social security, social welfare and food security made by India as part of its commitment to the global social agenda, and the Millennium Development Goals.