May 23, 2016
ARVIND PANAGARIA
llustration: Satwik Gade
The Modi government’s social sector strategy has aimed to make existing programmes more efficient, and give priority to empowerment over entitlement.
In broad terms, two features distinguish social sector strategy of Prime Minister Narendra Modi. First, it endeavours to make the existing programs more efficient by cutting leakages. And second, it gives priority to empowerment over entitlement.
Early in its tenure, the government achieved a major success in financial inclusion with empowerment through Prime Minister’s Jana Dhana Yojana. This scheme proposed to give a bank account to every family. The program entered the Guinness Book of Records for opening 1.8 crore accounts in one week from 23 to 29 August 2014. By May 2016, the scheme had opened 21.74 crore accounts with Rs. 37,445 crore in deposits.
Alongside, the Prime Minister not only took the pragmatic decision of retaining and rapidly expanding the Aadhaar biometric identification program but also accelerated its deployment for cutting wasteful expenditure in the delivery of social programs. Recently, legislation has been passed that empowers the government to require the beneficiary of services financed from the Consolidated Fund of India to provide her Aadhaar identity number. In turn, the government can link the beneficiary’s Aadhaar identity number and bank account to which benefits are transferred. This direct benefit transfer (DBT) instrumentality complemented by Aadhaar seeding of the bank account eliminates the possibility of benefits accruing to multiple accounts of the same beneficiary or to ghost accounts.
Large social programs such as the Public Distribution System (PDS), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and subsidized sales of fertilizer and liquid petroleum gas (LPG) cylinders have been subject to massive leakages through the use of multiple and ghost accounts. These leakages can now be plugged via DBT cum Aadhaar instrumentality. The government has already successfully done this in the disbursement of the subsidy associated with the PDS, MGNREGA and LPG cylinders though the coverage remains far from complete. Not all bank accounts have been linked to Aadhaar.
To-date, an estimated 3.5 crore multiple or ghost beneficiaries have been eliminated from the LPG rolls. During 2014-15 alone, this resulted in savings of Rs. 14,672 crore. In MGNREGA, similar weeding out of multiple or ghost beneficiaries resulted in a savings of Rs. 3,000 crore in 2015-16. This amount is a little below 10% of the total MGNREGA allocation. In PDS, an estimated Rs. 10,000 crore has been saved by elimination of 1.6 crore fake ration cards using the Aadhaar instrumentality.
To empower rural households, the government has greatly accelerated the process of rural electrification and rural-road construction. During its two years in office, the government has brought electricity to 7,654 villages compared with 5,189 villages in the preceding three years. Likewise, total rural road length constructed has been 36,340 and 36,450 kilometres during 2014-15 and 2015-16, respectively. In comparison, only 24,160 and 25,320 kilometres had been constructed during 2012-13 and 2013-14, respectively.
Approximately 12 crore households in India continue to use solid biomass fuels for cooking, with its attendant harmful effects on health. To-date, no serious effort has been made to free up these households of the black carbon they inhale while cooking. For years, efficient cook stoves have been promoted but they cover less than 1% of the affected families to-date.
For the first time, the government has resolved to bring LPG cylinders to these households. The government has launched Pradhan Mantri Ujjawal Yojana under which 5 crore BPL [below poverty line] households will be provided subsidized LPG cylinders over the next three years. The target for the current fiscal year is 1.5 crore households. The scheme is being financed in part from the savings generated through voluntary surrender of LPG subsidy by existing richer households. At Prime Minister’s call, one crore richer households have already given up this subsidy.
In the Budget 2015-16, the government launched Atal Pension Scheme to provide a minimal insurance cover to workers in unorganized sector. Under the scheme, the central government co-contributes the lower of 50% of the total contribution and Rs. 1,000 per annum to each subscriber account for a period of 5 years. Depending on his contribution, a subscriber under the age of 40 receives the fixed monthly pension of Rs. 1000 to Rs 5000 at the age of 60 years.
In parallel, the central government has introduced Pradhan Mantri Suraksha Bima Yojana (insurance against accidental death) and Jeevan Jyoti Bima Yojana (insurance against death). The former provides cover for Rs. 2 lakh in case of death and Rs. 1 lakh in case of partial disability to individuals 18 to 70 years of age for a premium of Rs. 12 per annum. The latter covers individuals between 18 and 50 years for Rs. 2 lakh at a premium of Rs. 330 per year. By 9 May 2016, 9.4 Crore beneficiaries had enrolled under the Suraksha Bima Yojana and 3 crore under the Jeevan Jyoti scheme. Enrolment in Atal pension Yojana at 20 lakh was significantly lower.
The Budget 2016-17 announced three major initiatives related to health: insurance, Jan Aushadhi scheme and dialysis programme. Under the health insurance scheme, coverage for Rs. 1 lakh is provided against hospitalization expenditure. For senior citizens, there is additional coverage of Rs. 30,000. The government will cover eight crore families from economically weaker section free of charge through an Aadhaar-linked programme. Under Jan Aushadhi programme, the government will open 3,000 stores nationwide to provide low-cost generic drugs. With 2.2 lakh end stage renal disease patients added each year, the government has also announced a programme to provide dialysis services in all district hospitals.
The government has introduced several measures towards improved implementation of MGNREGA. It has given priority to low-hanging fruits such as water ponds and de-silting of water ponds in asset creation. It has also taken a more liberal approach towards building of private assets such as houses, wells and toilets for the poor. This has created ownership of assets by respective beneficiaries and led to better supervision of work. Finally, the government has improved the convergence between MGNREGA works and schemes such as skill development, Prime Minister’s Krishi Sinchai Yojana, Housing for All and Swachh Bharat Mission.
In the area of higher education, regulations have been liberalized to give greater flexibility to women to complete their M. Phil and Ph.D. degrees. Upon fulfilling certain conditions, women Ph.D. scholars relocating to other towns can now transfer to a university in the destination town rather than having to begin afresh. Rules have also been liberalized to give autonomy to colleges that receive the highest accreditation grade for three consecutive cycles from the National Assessment and Accreditation Council.
Furthermore, the government has committed to turning 10 private and 10 public institutions into world-class teaching and research institutions. Steps towards achieving this objective can lead to far-reaching reform of higher education system in India. Separately, the government has made the reform of medical education in India a higher priority, assigning the task to a high-level committee.
The discussion of social sector reform and programmes will be incomplete without a brief reference to the Swachh Bharat Mission (SBM). The mission is not only critical for a healthy India but is also essential to creating a modern India. Among other things, it proposes to make India open defecation free by 2 October 2019, the 150th birth anniversary of Mahatma Gandhi. Toilets built have risen from 5 million in 2013-14 to 5.88 million in 2014-15 and 12.7 million In 2015-16.
This documentation is by no means complete. There is much else being done via housing for all, Prime Minister’s Krishi Sinchai Yojana, livelihood mission and much else that touches people’s lives. The distinguishing feature of the policies under the present government is that they promise to sustain high growth in the GDP, revenues and social spending and deliver social services more efficiently and effectively.
Arvind Panagariya is the Vice Chairman, NITI Aayog. Views are personal and may not be attributed to either the Government of India or NITI Aayog.
