If you just looked at the Pradhan Mantri Jan Dhan Yojana, Prime Minister Narendra Modi's big financial inclusion scheme, you'd be underwhelmed. The previous government tried something similar but a huge number of the bank accounts that were opened have no money in them. The Aadhar card, as most know, was an effort of the United Progressive Alliance that Modi considered nixing. Put the two together and then add in mobile phones, and you've got both an acronym that the prime minister can embrace and a programme that could make welfare in India a more efficient endeavour of the state.
The pre-budget Economic Survey spoke of JAM ‒ Jan Dhan, Aadhar and Mobile ‒ which together could help plug the rampant leakage that plagues social programmes. Finance minister Arun Jaitley, in his Budget speech, went a step further. He spoke of moving from JAM onward to Jan Suraksha, announcing a plan to eventually set up universal social security where no Indian would have to worry about insurance or pensions.
"A large proportion of India’s population is without insurance of any kind ‒ health, accidental or life," said Jaitley. "Worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged."
Keeping the baby, losing the bathwater
Jaitley might not want to admit it, not if he takes his references to the previous government being a scam-scandal corruption raj seriously, but much of what is being embraced with regards to welfare comes out of proposals from the UPA government. Prime Minister Manmohan Singh spoke regularly of empowering poor Indians and ensuring inclusive growth, and many of his efforts, such as Aadhar or the direct benefit transfer programme, sought to ensure that the state is better at getting its resources to the people who need it the most.
In many ways, what is slowly being put together under the Modi government is not dissimilar to this vision. In his Independence Day speech in August, the prime minister made his own intentions for the country's poor clear: "We have to move in a direction where every poor person is able to operate his bank account from his mobile, is able to demand various things from the government, can submit applications, can conduct all his business, while on the move, through mobile governance."
"In sum, these social security schemes reflect our commitment to utilise the Jan Dhan platform, to ensure that no Indian citizen will have to worry about illness, accidents, or penury in old age," he said.
Each of these schemes is contributory, yet the intention and design suggests a vision of a compassionate state that is not willing to see the underprivileged waste away. It might not be called Right to something, but the government is clearly ready to invest in building a social security net that will truly benefit citizens, bringing India closer to the grander idea of a universal safety net.
Couple this with Modi's fortunate U-turn on Aadhar, and one could see an Indian welfare state that targets its subsidies better and uses its size, reach and position in the market to create a buffer that will not allow citizens to fall into penury. As always in India, implementation will be crucial. But here, improved technology and the lessons the government has learned from the UPA's failures ‒ the Jan Dhan Yojana actually incorporates lessons from the massive business correspondent banking scheme that only half worked in the previous government ‒ could give the state a better chance to protect every Indian from penury.
The pre-budget Economic Survey spoke of JAM ‒ Jan Dhan, Aadhar and Mobile ‒ which together could help plug the rampant leakage that plagues social programmes. Finance minister Arun Jaitley, in his Budget speech, went a step further. He spoke of moving from JAM onward to Jan Suraksha, announcing a plan to eventually set up universal social security where no Indian would have to worry about insurance or pensions.
"A large proportion of India’s population is without insurance of any kind ‒ health, accidental or life," said Jaitley. "Worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged."
Keeping the baby, losing the bathwater
Jaitley might not want to admit it, not if he takes his references to the previous government being a scam-scandal corruption raj seriously, but much of what is being embraced with regards to welfare comes out of proposals from the UPA government. Prime Minister Manmohan Singh spoke regularly of empowering poor Indians and ensuring inclusive growth, and many of his efforts, such as Aadhar or the direct benefit transfer programme, sought to ensure that the state is better at getting its resources to the people who need it the most.
In many ways, what is slowly being put together under the Modi government is not dissimilar to this vision. In his Independence Day speech in August, the prime minister made his own intentions for the country's poor clear: "We have to move in a direction where every poor person is able to operate his bank account from his mobile, is able to demand various things from the government, can submit applications, can conduct all his business, while on the move, through mobile governance."
The Economic Survey gives further shape to this plan. It points out how subsidies have often had difficulty making their way to the intended beneficiary, and then proposed to use Aadhar coupled with a Jan Dhan bank account and linked together with a mobile phone number to plug leaks, and refers to this as the JAM Number trinity.
"If the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, real progress in terms of direct income support to the poor may finally be possible. The heady prospect for the Indian economy is that, with strong investments in state capacity, Nirvana today seems within reach," the survey says.
Right to Pension and Insurance
Consider the other three social security announcements made by Jaitley on Saturday. The Pradhan Mantri Suraksha Bima Yojana covers accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year, while the Atal Pension Yojana aims to give a defined pension based on however much people want to invest, with the government willing to put in 50% of the premium for five years if citizens sign up this year. The third major pension scheme covers natural and accidental deaths, giving holders Rs 2 lakh for just Rs 330 a year ‒ less than a rupee a day. Jaitley also announced a special scheme for the elderly.
"In sum, these social security schemes reflect our commitment to utilise the Jan Dhan platform, to ensure that no Indian citizen will have to worry about illness, accidents, or penury in old age," he said.
Each of these schemes is contributory, yet the intention and design suggests a vision of a compassionate state that is not willing to see the underprivileged waste away. It might not be called Right to something, but the government is clearly ready to invest in building a social security net that will truly benefit citizens, bringing India closer to the grander idea of a universal safety net.
Couple this with Modi's fortunate U-turn on Aadhar, and one could see an Indian welfare state that targets its subsidies better and uses its size, reach and position in the market to create a buffer that will not allow citizens to fall into penury. As always in India, implementation will be crucial. But here, improved technology and the lessons the government has learned from the UPA's failures ‒ the Jan Dhan Yojana actually incorporates lessons from the massive business correspondent banking scheme that only half worked in the previous government ‒ could give the state a better chance to protect every Indian from penury.