Business Daily from THE HINDU group of publications
Friday, Oct 06, 2006
Time to re-weave safety nets
S. D. NAIK
Despite over half a century of battle against poverty, the problem is still formidable, having acquired new dimensions with growing disparities and divides.
The divide between those who have access to essential services and those who do not, has led to disparities in health and nutritional status, in education and skills, as also in availability of clean water and sanitation.
For quite sometime now, the social sector indicators have been trailing economic numbers in India. Its Human Development Index is one of the lowest in the world. Even as the economy now seems to have entered a higher growth trajectory, the fruits of growth have not reached the poor and socially deprived.
Not surprisingly, many commentators have described the India story as `Growth sans human development'.
Against this backdrop, there is a growing realisation that under the prevailing socio-economic conditions, the real challenges before the planners and policy-makers are to devise ways to protect the vulnerable poor and to ensure that the fruits of economic growth are shared by all sections.
There is a growing consensus among economists and various institutions that the growth needs to be more inclusive.
The World Bank's recently released Development Policy Review (DPR) on India, "Inclusive Growth and Service: Building on India's success," has chosen to concentrate on delivery of core services such as health-care, education, and power and water supply to ordinary citizens. It says that there are many causes for dismay in the current state of service delivery in India corruption, absenteeism, low quality and excessive costs.
The Approach Paper to the Eleventh Plan also calls for inclusive growth and says: "The growth should be accompanied by a major effort to provide access to basic facilities such as health, education, clean drinking water, etc., to large parts of the population which do not have such access at present."
The Paper admits that the recent strong economic growth has bypassed large sections and advocates greater accountability of the institutions in providing core public services.
In both developed and developing countries, social security has assumed importance for the well-being of workers, their families and the entire community.
To ensure this, social safety nets of various kinds have been evolved over time to protect the vulnerable poor. Also, the state has a priority role to play in the facilitation, promotion and extension of coverage of social security.
Over the decades, a number of social security schemes and food-based social safety nets have been in operation in India. They include programmes on self/wage employment, nutrition, and social security programmes, and, most important, the public distribution system (PDS).
In fact, the country has some of the largest (in terms of coverage) and biggest (in terms of funding) food-based social safety nets. Their efficacy and impact has led to varying outcomes in different parts of the country.
As India is now in the process of formulating its Eleventh Plan, it is desirable to make a detailed review of the plethora of schemes and programmes and make suitable changes where necessary.
In this context, a new publication brought out by the World Food Programme: "Protecting the Vulnerable Poor in India: The Role of Social Safety Nets (2006)" could prove to be a useful guide for planners and policy-makers.
The volume showcases a selection of some of the papers presented at a National Workshop on the subject hosted by the World Food Programme together with the World Bank and the LBS National Academy of Administration in October 2004.
It provided a forum to discuss issues relating to safety nets, theoretical concepts, empirical studies, as well as practical issues of deliveries.
An important conclusion of the workshop was the need to constantly review the impact of social safety nets and to regularly fine-tune them to achieve the desired goals.
The papers in the volume are presented in three parts. Part I deals with the conceptual framework. Part II discusses the experience with food-based safety nets, and Part III examines issues in non-food based safety nets.
Thus, this is a laudable effort to review the plethora of social security schemes and safety nets that have been introduced in India and their outcome.
Food-based safety nets are useful in a poor country, especially in agriculturally depressed regions, and during emergencies.
However, the long-term sustainable solution has to lie in more imaginative agricultural policies that focus on improving production and the incomes of the poorest in the poorer regions.
In addition to restructuring agriculture and foodgrains policies, it would be necessary to improve the delivery of food-based programmes.
The PDS is the single most significant example of state intervention to ensure food security across the length and breadth of the country.
However, the PDS has been less than successful in tackling the challenge of economic access.
In fact, PDS has turned out to be the costliest anti-poverty programme ever and it has also failed in its role as an income transfer mechanism. States with the highest incidence of poverty are among the lowest consumers of subsidised PDS foodgrains. The incidence of malnutrition continues to remain unacceptably high higher than that of poverty by a factor of about two.
It has been forcefully brought out in this volume that despite India's progress in the reduction of income poverty over the past three decades, the reduction of malnutrition is less impressive.
The other tools that have failed to make the desired impact on the living conditions of the poor include the delivery of institutional credit, employment programmes for protecting the vulnerable poor, pension schemes, social insurance for the elderly, pension schemes for elderly, widow pensions, health insurance, etc.
Major shortcomings in all the cases relate to the deficiencies in the delivery mechanisms and poor governance. The incidence of corruption is also widespread in all the schemes.
Need for a review
Clearly, there is a need to make a detailed review of all the social protection schemes and merge or restructure many of them to plug the leakages and improve their efficacy in realising the goals.
This has become all the more necessary in the context of the new National Rural Employment Guarantee Act (NREGA) and the launching of the Bharat Nirman Project.
There is a need to explore the scope for converging resources to be allocated under these schemes and the various anti-poverty programmes and social safety nets to ensure greater accountability and efficiency.
The accent should be on boosting the asset base of agriculture, generating more job opportunities and incomes and empowering the vulnerable poor.
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