By Viswanadha Modali, Australian National University, Canberra.
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 has 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; the Food Corporation of India and the Agricultural Prices Commission were established, 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 in nature 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 did improve the immediate standard of living but they did nothing to ensure that people would be free of the welfare state, 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 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 to the economy of India.
As land was distributed to a larger group, there was a large class of people who had 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
1980s onward 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 which tackles social issues much better than direct welfare policies. This fact had become apparent in the case of several Asian countries which 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 indulge in self employment. However, protective social policies like family and maternity benefit schemes still continued on during this period.
Influence of the Politics of Appeasement
Until the 1980s the Indian political system was relatively immature 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 policy, 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, which ought to be provided by the government are provided to people by political parties and party workers to build goodwill. This includes education, medicine and more importantly jobs. These services when provided to certain caste groups create a chain of loyalties which secures a vote bank for said political party. This system bites into social welfare in India as local and State governments are eager to provide more only to certain groups, while ignoring the larger issues which social welfare could combat. Patronage distracts local and State governments from solving issues through social policy, rather social policy becomes a tool of appeasement and electioneering. After understanding the system of patronage and its impact on governments, it becomes quite clear to find the cause of social policies implemented in India, in recent times.
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 Social Services (this includes schemes like handouts, pensions, etc.) from 1990-2017. However, for healthcare there was only a 0.13% increase and actually a decline in education expenditure as a percentage of GDP. Obviously, our GDP has increased dramatically since 1990 so the absolute expenditure has likely increased in all of the parameters, but when compared to Social Services the increase in education and healthcare is minimal.
This is when primary healthcare in India is severely lacking and as per the Program for International Student Assessment Survey, (meant for an evaluation of educational systems by the OECD), India ranked second to last, only better than Kyrgyzstan. So clearly, education and healthcare are areas which warrant much higher government support, especially to create a much needed educated and healthy workforce for the future. Despite the staggering requirements in many areas of governance, Indian social policy chooses to focus on those policies which target politically significant groups, this is accompanied by a reduction of the role of ideology in social policy.
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 market friendly. 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. Given the government’s pre election rhetoric, many would have expected the labour code, land reform and commercial liberalization to be a priority. However, none of these have yet been delivered and there is a sense of gloom amongst the small businesses off late. This again, can be attributed to the void of ideology and focus on political practicalities which has been dominating 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 most of our population remains unemployable. To improve social policies in India, we have to stop looking at it in isolation and consider the wider economic impacts of such policies. In that regard, policies like 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 policies. One way to achieve this would be to emphasize on education and training, even if it comes at the cost of social welfare schemes. If welfare expenditure can be reduced, meaningful investments could be made in infrastructure, education, training, energy generation, etc. It is argued that parameters that increase the productive capacity and economically empower the population are much more effective in alleviating poverty and increasing the standards of living than protective welfare policies.