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Challenges for Social Policy in India

August 2, 2012

Atul Sood Jawaharlal Nehru University

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Social Policy

What matters for Developmental Outcomes? Money Flow of funds / Incentive Structure Implementation Issues Content of programs Orientation of Development or

Content and Direction of Policy

Poor Outcomes: Does Growth Matter?

Poor Outcomes, HDR 2011 – MDG progress M (0.29) – Bangladesh, Egypt, Bhutan, Brazil, Iran, Thailand, Malaysia

PCI Growth – Highest after China and Vietnam

Whose Responsibility? Quantum and Flow of Funds need to

understood together.

Important to understand the Statutory Fiscal Framework

India - Quasi Federal Structure

States Shares in Expenditure: Health, Education, Total

Health And Education Expenditure % of GDP

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How is this being done? Content and direction of policy

Change in the meaning of Policy

Through Institutional Change Complex set of changes brought

together in the norms and criterion related with how resources are mobilized, transferred and utilized

Introducing New Instruments - PPP

Content and Direction of Policy

Current policy approach privileges a privatized method of development and problem-solving while ignoring and aggravating social inequalities

Meaning of Policy - Technocratic View

Policy is about? – what needs to be done to develop efficient market economy is by and large known.

Only concern of Policy is -Implementation

Shortcomings in implementation Weakness in policy

design Poor

implementation capacity

Disruptive power of short term transition problems

Lack of political will

Way out of implementation problems?

Failure due to weak institutions, therefore, strengthen the institutional capacity of the implementing agency, encourage good governance (co-ordination, accountability, managerial propriety)

Rhetoric of ‘selectivity’ and objective conditions of ‘good governance’

Institutional Change Fiscal Restructuring

transfers from the central government to the state governments are based on mobilisation of own resources by the state governments;

economic sustainability appears as the chief criterion for ‘success’ of programs, schemes, grants;

there is a dominant concern with efficiency in financial allocations, even in the social sector, leading to privatisation via public-private partnership;

attempt is to do such institutional reform that creates enabling environment to attract outside funds in support of development efforts

Centralization There is a inherent process of centralization in

place with increasing control of the Centre as reflected in nature of grants decline in overall transfers increasing expenditure responsibilities of the states increase in committed expenditures increase in relative command over total resources by

the Central government in relation to its expenditure

There is accentuation of imbalances both vertical and horizontal imbalances

Statutory and Non Statutory flows from Center to States: 1951-2007

Resource Transfers

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Another Dimension of Institutional Change - PPPs

To meet the challenges of ‘implementation’ seek partnership from private sector and civil society.

National Rural Health Mission; In education; Urban Governance and Reform

When and Where do PPPs Work?

Technically - key concern with PPP is whether the efficiency gains in a PPP more than offset the higher private sector borrowing costs

PPP cannot be viewed as substitutes for good governance. Rather good governance is a pre-requisite for the success of PPPs.

PPPs are perhaps more appropriate for economic infrastructure projects that yield high returns, rather than purely social infrastructure projects.

PPPs PPP is different from participation by grass root

actors; PPP requires governance reforms

Several states in India have taken the lead in using PPP approach, without making the effort to set up the necessary institutional framework as has been done in other countries

If PPPs functions in non-competitive environment statutory regulatory bodies need to be set up; Other issues - risk allocation, designing of PPP agreements and choosing the right areas in which PPP approach is valid

Defense of Growth The legislative changes along with new principles of

governance like decentralized decision-making, public private partnership, and stakeholder consultations for the Indian state, together provide a defense for 'growth'.

It is believed (?) implicitly in these legislative and institutional change that adequate response to the widespread discontentment of a population distressed with methods of land acquisition, underemployment, food insecurity, limited benefits of growth, poverty, poor infrastructure of water, public health, sanitation, housing, education and food is to build to highways, bridges, dams, malls, supermarkets, condominiums, gated communities, airports, parks, private cities and so on.

Growth or Social Welfare?

In this neoliberal phase 'growth' is the legitimizing principle that the state uses to rationalize its actions in comparison to 'social welfare' in the earlier years. The regulatory changes are made to meet this challenge and not the challenges of water scarcity, loss of habitat and livelihood for the forest dwellers or displacement and dislocation of rural poor from their lands, lack of education or health.

Challenges and Questions The idea of 'public interest‘is often in opposition to

the interest of the poor, marginalised, Dalit and tribals.

Has public interest become a euphemism that stands as a proxy for the interests of national and global capital?

Are democratic decentralization and stakeholder claims the institution and process through which this 'public interest' reworks itself?

What are we seeking? Partnership in Development

The policy process has to be inclusive, transparent and participative.

A relook at economic Reform process not in technocratic terms -- Reform as a bargaining process

Not farewell to Growth but think beyond Markets.

Politics in Command Politics is at the Centre of policy making

process

Lack of political will is not slippage but calculated response to local political realities – wisest course of action in given circumstances

Development perspective (goals) and instruments cannot be outsourced