By Viswanadha Modali, Research Associate, Policy
To understand the evolution and impact of social policies in India, we must first define the often misunderstood term “social policy”. The London School of Economics very succinctly defines it as a policy ‘concerned with the ways societies across the world meet human needs for security, education, work, health and well being’. Given that the term has a very broad and elusive definition, it brings under its purview a very wide range of government policies impacting several facets of human life.
India, being a very large country has had a very haphazard record of social policy planning and implementation. It is marked with authority overlapping between the Centre and States and the discord between a wide variety of actors involved. This overlapping authority and discord have prevented India from formulating a singular set of social policies with a singular set of goals.
But this doesn’t mean that social policy in India is non-existent. Many endemic societal problems have been addressed through social policies. Before we look at specific policies it will be useful to understand the two broad types of social policies; viz., protective policies, and productive policies. Protective policies essentially give protection for, employment, income, well-being, etc. While productive policies try improving the productive capacity of the population, this includes education, training, and healthcare.
Right after independence, Nehru’s Fabian Socialism dominated the policy sphere which led to many of the early social policies in India. The aim was to redistribute national resources, very liberal subsidies were provided on essential goods and services to the downtrodden. This involved policies like the public food delivery system in the form of rations, the Essential Commodities Act, which made the government produce essential commodities at a lower price; establishment of the Food Corporation of India and the Agricultural Prices Commission, both of which sought to regulate agricultural production and prices.
These policies heavily focused on agriculture and providing benefits to the people, this made them very protective with minimal productive gains being made. During this period of 1950-1960 a country like Singapore or a bit later China heavily invested in worker training and education by abandoning the traditional notions of a welfare state, which was supposed to ‘provide’ or ‘protect’ the people. It is argued that this is one glaring inadequacy of early social policy in India influenced by Fabian socialist ideology. The policy sought to protect and uplift, rather than comprehensively prepare the population for the market. Due to this, the impact of these social policies was not satisfactory in the long run. They definitely improved the immediate standard of living but did nothing to ensure that people would be independent of State subsidies, but rather made them dependent on it.
Assessing Outcome: The Case of Land Redistribution Policy
Land redistribution was a major social policy implemented in post- independence India. The policy was supposed to redistribute land held by a small group of the elite peasantry to the masses and reduce inequality. Ideologically this was very well suited for the administration then. However, the success of this policy in achieving its main objectives might have been limited, with a small group of elites being replaced by a large group of wealthy farmers. However, this did some good for the economy of India.
As land was distributed to a larger group, there was a large class of people who had a substantial income to consume and invest, this decentralization of income led to an increase in rural consumption and production of manufactured and other goods. This strong consumer base made up a significant portion of our economy. This is one example, where a social policy, slated to fix an issue of societal inequality, ended up having a profound impact on the economic foundations of the country.
Shifting Focus Areas
In the 1980s it became very clear that education, once neglected, was one of the most important productive forms of social policies. Countries like China and Singapore which had extensively invested in the training and education of their workforce a decade ago reaped the fruits of their investment with rapid economic growth and a higher standard of living. This kind of economic growth has a cascading effect that tackles social issues much better than direct welfare policies. This fact had become apparent in the case of several Asian countries that were now prosperous.
Taking a note from this approach, the government came up with the National Policy on Education in 1986 which sought to make education more accessible. Operation blackboard improved primary schools all over the country. In 1986 the government spent about 6% of its GDP on education. Apart from education, this period saw a much greater emphasis on productive social policies. The Jawahar Gram Samridhi Yojana sought to significantly improve rural infrastructure. This accompanied the Integrated Rural Development Program (IRDP) which provided subsidies and credit to a large part of the rural population. While the IRDP looks a lot like a protective policy, its objectives were productive, it sought to enable the rural population to engage in self-employment opportunities. However, protective social policies like family and maternity benefit schemes continued during this period.
Influence of the Politics of Appeasement
Until the 1980s the Indian political system was relatively nascent and there was no meaningful opposition to the Indian National Congress, but this started to change in the 1980s. With a mature and vibrant political system came the enormous influence of politics on social policies, while the influence of politics increased the influence of ideology receded.
The Indian political system has ever since been functioning on a system of patronage, where services that ought to be provided by the government are used only to influence the masses and build political goodwill. This includes services in education, health care, and more importantly employment and income generation. Social Policies that affect such services, when provided to certain caste groups create a chain of loyalties that secures a vote bank for a particular political party. This system bites into social policy goals in India as Local and State governments are eager to provide more only to certain groups while ignoring the larger issues which social policies could combat. Patronage distracts governments from solving issues through social policy, as it becomes a tool of appeasement and electioneering. For example; Job reservations for Gurjars in Rajasthan and Haryana are outcomes of political parties appeasing these dominant caste groups by giving in to their demands. Though the policy of job reservations was supposed to address the problem created by the caste system and the discrimination faced by people disadvantaged in employment opportunities due to their caste identities.
Missed Opportunity for Productive Social Policies
Despite it being very clear that productive social policy is the most effective tool for raising the standard of living, governments still spend a lot more on protective handouts. There was a whole 1.35% jump in protective policies (this includes schemes like handouts, pensions, etc.) from 1990-2017. However, for healthcare, there was only a 0.13% increase and a decline in education expenditure as a percentage of GDP. Our GDP has increased dramatically since 1990 so the absolute expenditure has likely increased in all of the parameters, but when compared to protective policies in the form of various subsidies, the increase in education and healthcare is minimal. This is when primary healthcare system in India is poor and as per the evaluation of educational systems by the OECD, India has one of the worst investments in education. So clearly, education and healthcare are areas that warrant higher government support, especially to create an educated and healthy workforce for the future.
With the arrival of the BJP government in 2014, it was expected that social policy in India might take a new turn and the approach to social policies might be more productive. However, it can be argued that the current government is failing to use its large mandate to bring about much needed meaningful change to the social policy system in India. The government has been very motivated in implementing politically bombastic policies, but the same enthusiasm is lacking in ground-level social policy implementation. Given the government’s pre-election rhetoric, many would have expected the labor code and land reform to be priority areas for social policies but nothing has been achieved in this direction so far. This again, can be attributed to the void of ideology and focus on political practicalities that have been dominating the Indian government’s approach to social policies in the last few decades.
Room for Change
The overall record of social policies in India is not the most successful, this can be largely attributed to the focus on protective policies due to which our productive capacity remains low and our population is largely unemployable. To improve social policies in India, we have to stop looking at them in isolation and consider the wider economic impacts of such policies. In that regard, policies of subsidies or direct transfers do not change the actual long run standard of living but rather abate problems in the short run.
The real goal of social policies in India should be to stop making the country dependent on short-sighted policy goals. One way to achieve this would be to focus on education and training, even if it comes at the cost of social welfare schemes. The focus of our social policies must shift to address the parameters that increase the productive capacity and economically empower the population which will be much more effective in alleviating poverty and increasing the standards of living.