Tragedy is the harshest of teachers. And as we live through a more informed and hopefully more manageable phase of one of the century’s biggest calamities, there are lessons to be learned in every domain of our lives — from mental health to public spending. While the latter has been a concern for policy makers and thinkers ever since the conception of the modern welfare state in the late 19th century, current circumstances require us to think more deeply about how to accelerate this discourse and reflect on why, as a society, we sometimes weren’t able to support those who needed it most and what could be done to strengthen frameworks of social protection going forward.
Welfare infrastructure for urban industrial workers
India identifies as a labor abundant country. Given the nature of the COVID-19 pandemic, the consequences have been particularly harsh on workers in industries such as manufacturing where one cannot work from home, and construction, where contractual work arrangements render many workers ill-protected by labor laws and vulnerable to sudden job losses. This makes a government-sponsored welfare response targeted to support the industrial workforce imperative and indispensable.
India has an elaborate welfare infrastructure with multiple schemes targeted towards different objectives such as poverty alleviation, financial inclusion, rural development, education, and health. They can be categorized into two baskets based on the nature of benefits: direct and indirect benefits. The former includes cash transfers and employment guarantee programs, while the latter includes service-based benefits such as subsidized food, housing, electricity, education, and health care services. This article investigates the effectiveness of two key schemes — the Public Distribution System (PDS) and Employment Guarantee Programs (EGPs) — on supporting urban wage workers and migrants, and opportunities identified by researchers to innovate on learnings from the pandemic.
India’s Public Distribution System and its blind spots
The Public Distribution System (PDS) lies at the heart of the Indian government’s poverty alleviation efforts. The oldest vehicle of state sponsored welfare, PDS was originally introduced in India as a wartime rationing measure at the time of the Second World War. By the 1970s, it had evolved into a universal scheme for provision of subsidized food. It has since been modified on multiple occasions to attain the form it has taken today, wherein it seeks to deliver subsidized ration to households and individuals living in poverty through a network of fair price shops. State governments often strengthen this effort through what has come to be known as an expanded-PDS (ePDS), wherein states plug their own funds to extend subsidized ration to households and individuals who may have been excluded from central PDS.
However, the penetration of the country’s PDS in target communities is compromised by practical difficulties in proving eligibility for the scheme, and further in accessing the relief. Under the present system, the national and state-wise coverage of the PDS is decided by the central government, with support from NITI Aayog, based on the latest national census and consumer expenditure data. As of now, up to 75% of the rural population and 50% of the urban population is to be covered under the PDS. While the center determines the share of people at the national level and state level that are to be budgeted for in the PDS allocation, identifying beneficiary households for ration entitlements is the purview of the various state governments who do so on the basis of state specific exclusion criteria such as ownership of assets like a refrigerator or a sizable piece of cultivable land, or government employment of one or more members of the household. But the census and consumer expenditure surveys, which are the source of this data, are conducted every ten and five years respectively, which means we are unable to identify and subsequently extend relief to those in need of support between survey cycles for unforeseen reasons, such as loss of livelihood due to death or accident of head of household.
Not just that, the dependence of beneficiary rosters on census and survey data also means migrants could get left out of the census completely if they happen to not be in either their home state or place of work at the time of data collection. In fact, until 2019, entitled households could collect their ration supplies only through local ration dispensaries, effectively excluding most of the country’s domestic migrants from being able to access what was lawfully theirs. Although family members other than the head of the entitled household have always been allowed to procure subsidized ration under the PDS, this excludes families that have migrated leaving no one behind. Even when a family member left behind does secure the family’s ration, there is no economical way to transport it to the rest of the household. And the acuity of their plight worsens if there is no one back home to receive the benefits they are entitled to either. As per the latest National Census Survey of 2011, over one-third of all Indians are migrants and 10% of all migrants are economic migrants. According to more recent estimates from the Economic Survey (2016–17), the migrant workforce in India could be over 100 million, making this an important concern.
One nation one ration card — the incantation to fix PDS gaps?
The large-scale inaccessibility of the PDS by migrants pointed to the need for decentralization of ration distribution i.e., freeing it from confines of individual states so as to allow entitled households to procure ration from anywhere in the country with their ration cards. In response to this need, May 2019 saw the launch of the One Nation One Ration Card (ONORC) plan. As of today, all except four States and Union Territories (Assam, Chhattisgarh, Delhi and West Bengal) have been connected through it. ONORC attempts to address barriers in the way of welfare access for migrant workers through an approach based on the creation of a central database of ration beneficiaries, thereby allowing the beneficiary and their family to collect ration from anywhere in the country. It is also meant to allow multi-state withdrawals if the dependents of the ration card holder are back in the home state while the head of the household has migrated to an urban dwelling for work. Building a centralized database that records ration procurement against each ration card also prevents the possible misuse of double procurement in different states or from different ration dispensaries as well as bureaucratic leakages.
A central database for public distribution is also a step towards a relational database management system (RDBMS). As of now, the plethora of welfare programs spanning our country is managed by several different ministries, divided between the central and state governments. Schemes call upon independent databases that often do not interact with each other. A central relational database system consisting of scheme-specific rosters linked on a unique key (such as Aadhaar in the Indian context) would therefore lead to a better understanding of welfare coverage and dependence, and aid a more equitable distribution of welfare funds. It would also help identify those who might have fallen through the cracks. This would be especially beneficial for migrants.
The need for a central database has been made all the more evident during the pandemic with reports of huge amounts of undistributed ration in several states. However, creating one central database impinges upon near-universal coverage of a national identifier similar to a social security number. The leading form of national identification in India is currently the Aadhaar card with coverage standing at about 90% with some variation across states. This puts India in a great place with respect to building an RDBMS, but currently the Aadhaar is only part of the welfare infrastructure. There are several other National and State IDs that are mandatory for availing essential welfare services such as the MGNREGA job card (which is required to avail 100 days of government guaranteed work at minimum wage in the rural areas in case of unemployment) that do not enjoy similar uptake.
In June 2020, Caritas India interviewed 700 migrants and about 50 other stakeholders from the northern and north-eastern parts of India to understand the extenuated struggle of migrant life through the lens of the pandemic. It found that, although the coverage of Aadhaar Cards, Ration Cards, and Voter Cards in the sample was quite promising, only 34% of the sample had MGNREGA job cards. The high coverage of the former might have to do with the recent government emphasis on registration for Aadhaar Cards as well as the push for opening bank accounts under the Jan Dhan Yojna. In which case, similar government impetus towards job cards would be hugely beneficial for bringing more people into the MGNREGA safety net.
Real-time updation of data through self-targeting and blockchain
To avoid the large numbers of beneficiaries (mostly migrants) getting left out due to the use of the national census and consumption expenditure surveys, it would be beneficial to move as close to real time updation of data as possible. One way this can be achieved is through establishing feedback loops where beneficiaries can self-report when they are left out. The Food Ordinance of 2013 established food as a legal right, giving households legal recourse to obtain ration cards if they feel entitled to them. This added an element of self-targeting in a scheme otherwise based on external targeting i.e., identification of beneficiaries through government surveys. This was a welcome change since it not only helps strengthen the external targeting system by drawing attention to its blind spots, but also helps keep rosters more up to date by reducing dependence on census and survey data.
Adding more such feedback loops will not only help keep rosters more updated still but also bring in more accountability. This was recently corroborated by economists Karthik Muralidharan (UC San Diego), Paul Niehaus (UC San Diego), Sandip Sukhtankar (University of Virginia) and Jeffrey Weaver (University of Southern California) in their paper titled ‘Improving Last-Mile Service Delivery using Phone-Based Monitoring’. They found that reaching out to beneficiaries via SMS or call and communicating this outreach to engaged government officials led to an almost eight percent decrease in incidence of non-receipt of relief. Similarly, having a helpline number where beneficiaries can call or send an SMS will further strengthen this process.
Technologically, the next step in real-time updation of data are blockchain-based solutions. Blockchain technology, at least in theory, seems to be an all-encompassing solution for all our welfare woes. It promises the whole utopia from real-time updation to privacy, and its hallmark immutability almost makes it the gold standard for system strength against leakages and laundering. Although blockchain-based public welfare solutions are still in the experimental phase, we have quite a few success stories to take this new innovation seriously; case in point being the United Nations World Food Programme (WFP) using a blockchain platform to deliver aid to Pakistani and Syrian refugees without requiring a financial intermediary. WFP, the largest agency delivering humanitarian cash globally, is actively advocating for the use of blockchain technology as it is safe, efficient, and allows them to offer beneficiaries more control over how they receive and spend their cash benefits — at ATMs, as mobile money, or at shops.
NREGA not enough — second largest welfare infrastructure that falls short
Though not a substitute to subsidized ration, but a definite complement, Employment Guarantee Programs (EGPs) are a classic instrument of self-targeting which is known to have been successful in several developing countries. They allow unemployed individuals of working age to register themselves for state-assigned work at minimum wage rate. Employment under EGPs usually comprises manual labor support for ongoing public infrastructure projects. The limiting reagent in state provisioning of work is the availability of it. The demand for it, on the other hand, is a good indicator of its need.
India’s flagship and only Employment Guarantee Programme (EGP) is the Mahatma Gandhi National Rural Employment Guarantee Programme (MGNREGA) This is a rural EGP and only provisions work in rural India. As per official numbers, April 2021 saw a 91% increase in demand for work under MGNREGA over April 2020. This increased demand strengthens the case for self targeting as a form of welfare and calls to question the absence of an urban counterpart for MGNREGA in a country like India where casual labor makes up nearly 11% of the total urban labor force. An Urban Employment Guarantee Programme (UEGP), if done right, could supplement private job opportunities in urban areas with an employment guarantee that would act as a safety net for those seeking work but unable to find it due to skill gaps or seasonal lows and demand slumps.
The promise of an Urban Employment Guarantee Program
Several experts have vehemently emphasized the need for a central urban EGP in India since pre-COVID times and the use case could not be stronger than now with the COVID-induced migrant crisis having become the banner image of India’s plight last year. One among them, Jean Dreze, Professor of Economics at India’s Ranchi University, put forward in August 2020 a model for an urban job provision program called the Decentralized Urban Employment and Training (DUET) Scheme wherein ‘job stamps’ are issued by the government to public works organizations, liable for use against employment provision by the organization to an otherwise unemployed worker. An article by Shivam Vij in The Print about DUET suggests the creation of a centralized mobile application such as Urban Company to allow hiring of contractual labor in an organized way. This would also encourage workers to fast-track getting themselves formal identification, since it would be tied to employment opportunities and thereby facilitate expansion of the welfare state.
In recent times, several state government sponsored urban employment guarantee initiatives have come up but not only are they fairly new, they are also limited in funds. While they do make for more than a dent, they cannot supplement the need for a centrally funded scheme.
Critics of a UEGP warn that it would lead to burdening the urban infrastructure due to increased migration to UEGP cities. But this has been countered by proponents of the scheme, firstly, by emphasizing that the employment offerings under an UEGP could include “green jobs” directed towards greening urban spaces and thereby building urban infrastructure rather than encroaching it. Secondly, they suggest focusing on employment guarantee provisions in Tier-2 and Tier-3 cities, just as much as in Tier-1, so as to prevent incentivizing urban-urban migration.
Another argument against a UEGP is that it would crowd out private sector jobs, an argument against all employment guarantee programs. However, setting wage rates in a manner that renders going for employment support a fallback option rather than the preferred one is key. Wage rates under UEGP might thus need to differ based on the remuneration offered for the same work in the private sector. Eventually, as UEGP infrastructure strengthens, it could be used as a minimum wage enforcement tool. Additionally, a study by Karthik Muralidharan, Paul Niehaus and Sandip Sukhtankar, based on the MGNREGA in the Indian state of Andhra Pradesh shows that EGPs have spillover effects in the form of higher consumption due to increased market wages and private sector employment that outweigh direct gains in earnings from the program itself.
Conclusion
Evidently, when it comes to providing relief to the urban workforce in India, the issue is not a dearth of policies. The grand network of welfare schemes in India houses, within it, as many as 492 centrally-sponsored schemes and 55 state-sponsored schemes. As the pandemic has shown, what we need is deepening and widening coverage of existing schemes through efforts to improve targeting, awareness and accessibility. We should not shy away from embracing radical innovation and technology to achieve this. More importantly, while doing so, we need to focus equally on strengthening community engagement, local leadership and building awareness at the grassroots level. A shining example of this is the work done by Aajeevika Bureau, a grassroots organization working in select areas of Rajasthan, Maharashtra and Gujarat since 2004 to provide migrant workers a plethora of essential services such as assistance in obtaining formal identification, access to financial, legal and healthcare services, vocational training as well as creches at construction sites for workers’ children. It also works to empower workers by encouraging collectivization, particularly among women through peer leaders and critical thinking training programs. Furthermore, smaller efforts by private enterprises can also go a long way in solving this problem, as shown by Haqdarshak, an Android mobile application, that informs users of the welfare schemes they are eligible for based on their demographic details and educates them on the application process.
Welfare schemes are the lifeline for millions of workers affected by the pandemic, and improvement needs to be a constant endeavour; one that is spearheaded by the government and supported by private enterprises and local communities.
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This article was also published on Medium.