My first job in the public sector was for a cash transfer programme called Ellas Hacen (They Do) in Argentina – where I am from. The goal of the program was to transfer a monetary benefit in exchange for construction work to women from underprivileged backgrounds. They would also receive training in cooperative business development and women empowerment. More than seven years later, the programme does not exist anymore, but the problems are still there. Making inclusive institutions endure in time has been a challenge for us in the midst of political instability.
During the past two and a half months, I have had the opportunity to work as an intern with a policy implementation organisation and learn about the poverty alleviation policies in India. Even when the variations in the context are innumerable, I would still risk saying that our primary questions are similar. Although in India, the challenge of long-term development is mainly fed by the challenge of mass organisation. In my very short experience, thinking, planning, and implementing public policy in India demands a unique perspective of social dimensions.
As of August, there were 384 welfare schemes from 52 ministries working their way to the people through the direct benefit transfer system of India. This structure allowed the government to invest Rs 1.70 lakh crore in several already existing social schemes through a unified plan (Pradhan Mantri Garib Kalyan Yojana ) in order to alleviate poverty and reactivate the domestic economy. But the rapid expansion of much-needed government aid towards inclusive development is parallel to a slower process of integration of welfare systems in India.
Unifying the massive package of cash transfers and benefits into a consolidated welfare system is inevitably a medium to long-term task in this scale. There are a number of evaluations and research studies on different welfare programmes in India and many of them focus on organisational problems. Many researchers have pointed out leakages in programs like Mahatma Gandhi National Rural Employment Guarantee Act and Pradhan Mantri Matri Vandana Yojana, there are a considerable number of beneficiaries who never receive the transfer, or, if they do, it is too late.
Case for conditional transfers
In November 2015, the Ministry of Finance hosted the Delhi Economics Conclave, focused on the Jan Dhan-Aadhaar-Mobile plan. One of the key speakers was Luis Henrique Paiva, former head of Brazil’s conditional cash transfer scheme Bolsa Familia. Taking the experience of the Bolsa Familia was surely a relevant resource for a discussion about the integration of social protection schemes in India and it still is.
Even when there are no final conclusions about whether conditional cash transfers are the most effective way to reduce poverty and inequality in any developing country, they have undoubtedly been successful in reducing poverty and improving school enrollment, health-care coverage, and child nutrition where they were implemented. The experience of conditional cash transfers in Latin America has been thoroughly evaluated in that sense.
In 1997 Mexico launched Oportunidades (later renamed as Progresa, and now called Prospera), a programme consisting of cash payments to poor families with the condition of having regular school attendance, health clinic check-ins, and receiving food assistance. Since the programme went through a randomised evaluation stage during the first three years, the government was able to show its social impact through data and quantitative methods.
Universal basic income
In the past two decades, the issue of which is the optimal redistributive policy to reduce poverty has led to a whole branch of the social policy literature that compares the effects of conditional cash transfers to those of universal programmes. A big part of the discussion lies whether the administrative costs associated with the process of targeting make conditional cash transfers less effective than universal schemes. In India, this is even more relevant than in other countries, and that is why many prominent intellectuals and institutions have advocated for a universal basic income.
But is there any middle ground between the ideal of a universal basic income and the current Indian welfare system? As the World Bank’s Junaid Ahmad notes, the discussion on universal income has often overshadowed a fundamental issue: “Social protection in India is poised for a fundamental transformation from a set of fragmented schemes to an integrated system.”
While universal basic income might be a very important goal in the medium-term, it seems difficult to incorporate in the political economy agenda of India in the short-term. Improving the current social welfare structure would be a necessary step towards better social public assistance. We could say that the Bolsa Familia was a step in that sense in Brazil.
In 2003, Brazil integrated a series of cash transfer programmes into the Bolsa Familia. According to Aline Gozalo Hellmann, during the first two years, there were many coordination and operational challenges. The programme is destined for families below a poverty line of 154 Brazilian reals ($ 27.71 or Rs 2,063.84) of per capita monthly income. Its coverage went from 3.6 million families in 2003 to 12 million in 2009 – 48 million people and 25% of the population – and more than 14 million families in 2014. Its budget is about 2.5% of total government expenditure or 0.5% of GDP.
The programme has reduced infant mortality caused by undernourishment and diarrhoea by more than 50%, increased the passing rate of secondary students from 75.7% to 79.7% and reduces the Gini Index by 21%. The conditionalities in the Bolsa Familia are prenatal tests, nutritional and health assistance, and school attendance of at least 85%.
The organisation of the programme is the most relevant piece for the Indian context. Even when Brazil’s demographics are not even close to India’s, there are some points of comparison: Brazil is also an economic leader for the region and a very diverse country in terms of languages and cultures.
The Bolsa Familia is funded and led by the central government, but implemented by the states and municipalities. All the entities involved collaborate in maintaining a single registry for the entire eligible population – the Cadastro, the Direct Benefit Transfer System is definitely a step towards a similar integration of databases. The central government finds its way to monitor the distribution of benefits through a Decentralised Management Index but also trains the state and municipal officials in how to implement the Bolsa Familia.
In conclusion, the idea of taking the family as the base for social empowerment and welfare entitlements could derive in a single social policy like the Bolsa Familia. Reviewing the case of Brazil and the Latin American experience, in general, would be an insightful resource for the process India is going through in terms of social protection. That is before Jair Bolsonaro’s presidency, who started cutting off the programme’s funds in the middle of the pandemic: the average of families entering the programme used to be 220,000 per month and now is less than 10,000.
Andrés Fortunato did a summer internship with Indus Action through the Institute of Politics at the University of Chicago. He is currently a Master of Public Policy candidate at the Harris School of Public Policy.