As Central and state governments announce welfare schemes to battle the fallout of Covid-19, key questions arise around state capacity: can the governments adequately deliver the schemes they are announcing? Our previous assessment of health and social security schemes identify challenges and opportunities in state capacity.

Here, we highlight three important lessons to streamline delivery of the Covid-19 relief package and ensure support to vulnerable populations.

Decentralised and agile financing system

India’s fiscal federal architecture has several centralising features and has often been described as “quasi-federal” or “holding-together federalism”. Specifically, with respect to social policy financing, the Union government’s strategy has focused on welfare benefits delivered through several schemes each with their own planning, budgeting, and implementation structures.

The recent announcement of a Rs 1.7 lakh crore package for social welfare and ensuring cash into the hands of people has also relied on the existing architecture of Direct Benefit Transfers and Centrally Sponsored and Central Sector Schemes. At the same time, many states too have announced a range of their own fiscal packages.

Three important lessons need to be kept in mind with respect to fiscal strategies.

The first is regarding adequacy of financing. With states being at the forefront of the Covid-19 fight, the onus is going to fall on the Union government to ensure that adequate resources reach states in a timely manner.

The recent decision to transfer pending payments such as for Mahatma Gandhi National Rural Employment Guarantee Scheme wages, advance release of central share of the State Disaster Relief Fund and PM-Kisan are steps in the right direction.

But a lot more needs to be done.

Migrant workers in Lucknow during the lockdown to prevent the spread of the coronavirus. Credit: Pawan Kumar/Reuters

Just last week, the government released the second instalment of the Goods and Service Tax compensation to states pending for the period October-November 2019. The December-January funds have still not been released. Many states have also requested measures including easing of Fiscal Responsibility and Budget Management, full release of 15th Finance Commission revenue deficit grants, upfront release of health funds etc.

Second, this crisis is an opportunity to take actions that may have more medium- and long-term implications. Given that different states are currently reeling from different sets of problems (from agriculture to migration etc), block grants could be given to states instead of linking allocations to specific schemes with detailed and cumbersome processes and restrictive, centralised guidelines.

This would allow for prioritisation of different inputs and secure greater ownership from State governments. Such block grants could set the pace for longer term federal reforms, recognising the different social needs of states and their varied human development stages.

Last, in the absence of a strong formal mechanism of inter-state coordination (the Inter-State Council is still not very active), ensuring transparent communication and coordination across the Union and state governments will be critical in building trust and ensuring prioritisation.

Erring on the side of inclusion

The two most immediate issues facing economically vulnerable Indians are cash and food. Under the current relief package, existing direct benefit transfer programmes will deliver advance payments to beneficiaries, while measures such as universal public distribution system can help combat the food insecurity that many families will experience.

Our experience of working with direct benefit transfer programmes, highlight the sometimes-exclusionary nature of digitally delivered programmes. It requires digital access and connectivity, which can be at odds with institutional preparedness and the reality of vulnerable populations. Direct benefit transfer-based schemes shift the “burden of identification” to the beneficiary, a burden which can lead to the denial of welfare benefits.

Direct benefit transfers have been plagued by several exclusion errors such as inability to access the formal financial system, administrative errors in identity documents, errors in Aadhaar seeding, last-mile bank linkages, and authentication failures. Poor targeting and denial of welfare benefits of several DBT schemes and is already coming to light in recent rapid assessments.

For instance, a recent study conducted by the Stranded Workers Action Network found that out of 3160 migrant workers across states as many as 98% had not received any cash relief from government. Barring a few states such as Kerala, which has institutionalised a panchayat level grievance committee, lack of information amongst traditional power holders such as panchayat leaders and anganwadi workers leave limited avenues of redressal for the citizen.

While social welfare schemes in India have focused on reducing inclusion errors, i.e, reducing access to those who are ineligible in a scheme, greater focus must rest on exclusion errors, i.e, denial of benefits to those who are eligible. The humanitarian cost of inclusion errors, especially in a pandemic situation which threatens economic security along with public health, must be weighted higher.

Similar issues with respect to targeting also exist with respect to the Public Distribution System. Like direct benefit transfers, a focus on targeting efficiency has led to the exclusion of needy households. With the government currently having a buffer stock of around 77 lakh metric tonnes as of April 2020, the announcement of offering a supplementary public distribution system provision of 5 kg/person/month for the coming three months, makes complete sense. Yet with many stranded in between the work and home town, and the fact that public distribution system entitlement is per household not individual, ensuring access to all, even at the cost of lessening controls will be critical.

Central and state governments must err on the side of inclusivity, and ensure liberal targeting and delivery which provides a social security net for the most vulnerable.

People line up for food in Surat. Credit: PTI

Investing in community delivery mechanisms

Strong health systems do not emerge suddenly during a pandemic. Robust health systems with consistent investments are necessary to battle a pandemic.

In 2005, the National Rural Health Mission created Accredited Social Health Activists to strengthen village and district level health planning and management. ASHAs work in tandem with the Auxiliary Nurse Midwife. Rounding up the trio of rural community health workers are anganwadi workers who are part of the Integrated Child Development Scheme. Not only are anganwadi workers the frontline workers of the Integrated Child Development Scheme programme, they are alsoagents of social change, mobilising community support for better care of young children and mothers.’

These three types of workers provide community healthcare and generate awareness on government programmes. Frontline health workers, along with panchayat leaders, have been leading the delivery of the relief schemes being announced by central and state governments. Their community knowledge is important in identifying beneficiaries for Covid-19-related assistance schemes and relaying the necessary information to them.

Previous studies highlight several difficulties faced by community health workers: increasing administrative burden and documentation, low wages, delayed incentives for ASHAs, etc. Recognising the need to invest in community health workers and ensuring adequate support to them must be a key focus of public health delivery going forward.

State and central governments face an uphill task in delivering social benefits over the next few months, stretching the limits of existing state capacity. Developing a decentralised, community-led and inclusive response will be crucial to improving state capacity and protecting vulnerable populations.

Avani Kapur is Director, Accountability Initiative at the Centre for Policy and Research. Shruti Viswanathan is Lead Consultant, Governance and Technology at Athena Infonomics