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Measuring wellness of welfare schemes: A case of M.P.

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Last year witnessed a heated debate over the subject of “freebies” and their distinction from legitimate welfare programs. Ultimately even the most astute experts could only provide a murky distinction. In a crux, welfare schemes are those expenditures that benefit society as a whole, such as public distribution systems, expenditures on health and education and employment guarantee programmes. ‘Freebies’ technically are goods and services that recipients receive for free, regardless of how beneficial or detrimental they are. 

A year later a scheme that can be fitted in both the definitions has been one of the main topics of local discussions in Madhya Pradesh. The ‘Ladli Behna Yojana’ was launched by the state’s Chief Minister Mr. Shivraj Singh Chouhan on 15 March 2023.

In essence, disadvantaged married women would receive Rs 1000 per month to enhance their health, nutrition, and economic independence. The program, aiming to empower women, has a provisional budget of 60,000 crores rupees. 2.6 crore women voters of the state will play a significant role in the upcoming state assembly elections for 230 seats in November 2023.

Expectedly Mr Kamal Nath, a major leader of the opposition, rapidly stated, if elected, he would increase this amount to 1500 rupees. While the state CM declared, that he would eventually increase the amount to 3000 rupees.

Regardless of the upcoming election’s outcome, the Ladli Behna Yojana has been implemented, and a second instalment of 1000 rupees has been deposited in the accounts of the eligible women on July 10th. Sitting in a small town in Madhya Pradesh, I witnessed conversations on the ground level which highlight all of the major challenges plaguing even the best welfare initiatives in India.

  1. Underprivileged and lesser educated women having a difficult time comprehending all the required criteria and getting their Adhaar e-KYC.
  2. The availing of the benefits by many otherwise privileged women who were simply able to get the required documentation.
  3. A great deal of interest displayed by the husbands of the eligible women as many of them controlled their wife’s accounts.

The most intriguing reply, however, came from my housekeeper who, amid the political saga, ecstatically proclaimed that she would resign from one of her jobs if she began receiving rupees 1500 per month. This straightforward claim reveals why boosting societal welfare by merely disbursing money to individuals is fundamentally improper.

Consider the situation of my housekeeper. Her anticipated actions will cause her net financial gain from the scheme to approach zero depending on the income she is ready to forgo. In a state like Madhya Pradesh, with a largely impoverished population, one thousand or fifteen hundred rupees per month is a big enough amount for many to alter their behaviour. Thus if more women adopt the same strategy, their average labour force participation rate might even decline.

The second problem is people are not rational in real life. Given a specific amount of money and the freedom to spend it, there is a good possibility that the majority won’t use it most efficiently or towards the intended purpose. 

This is not meant to imply that the Ladli Behna Yojana is wholly pointless or a gratuitous freebie. India is a developing nation, each buck spent on welfare, especially on women and disadvantaged groups is essential for its development and benefits society in some manner. This specific program is no different. But the central issue continues to be which course of action is best given the scarce resources and numerous allocation alternatives.

The most ideal welfare schemes enable their beneficiaries the ability to gradually fulfil their own needs, allowing an eventual reduction rather than expansion of resources necessary to support them. Mr. Ronald Regan put it brilliantly “Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.”

The focus of a discussion on welfare initiatives should be on the actual impact that a given government plan or even a freebie will have in comparison to all other activities that could be undertaken with the same funds. Let’s go back to the context of Madhya Pradesh. The Ladli Behna Yojana has all the right goals on paper and will benefit a good portion of women. But when you compare its benefit to all other strategies that could’ve been utilised to empower women with the same budget, reasons for doubts arise.

Madhya Pradesh is one of India’s more underdeveloped states. Its per capita income is lower than the national average. According to Niti Aayog’s Multidimensional Poverty Index, 36.65% of its population is multidimensionally poor. Snail-paced recruitment in state government jobs has led to a major section of struggling unemployed youth. Expenditure (excluding debt repayment) of the state is estimated to be Rs 2,81,552 crore, a 12% increase over the revised estimates for 2022-23. 

In addition, the debt of Rs 24,551 crore has to be repaid. Receipts (excluding borrowings) are estimated to be Rs 2,25,843 crore, an increase of 11% as compared to the revised estimate of 2022-23. While in revised estimates, the fiscal deficit is expected to be 3.6% of GSDP.

The state has been performing fairly well in several sectors and has several appreciable programmes that have been helping its citizens. But hasn’t yet advanced to the point where it can support all of its residents’ needs out of government funds the majority of which come from taxpayers.

Resources are severely constrained for both the state and its citizens, making their allocations a matter of grave concern. Prioritising and implementing only the best welfare measures out of all options is crucial. 

A similar situation can be witnessed in many Indian states. As the election season kicks off every leader in the nation has something fresh to offer to the public for the future. Politics is, by its very nature, a popularity contest rather than an abilities test. Thus, as citizens, we must assess our alternatives based on more than just our short-term gains, but rather with a well-informed, long-term, impersonal and logical perspective. Only then we can assess the true wellness of our welfare policies and help define their optimum future framework.

– Miss Swarnim K.

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