Financing Welfare Session 4-A

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Questions and Answers

What was the primary aim of Sir William Beveridge’s report published in 1942?

To eliminate unemployment entirely.

To provide a comprehensive system of social insurance. (correct)

To promote free market principles.

To reduce government expenditure on welfare.

In the context of the welfare state, what does Article 16(4) allow for?

Elimination of quotas for government jobs.

Reservation of appointments for all citizens.

Disbanding public sector employment.

Reservation for weaker sections in education and employment. (correct)

Which of the following was a major change in policy priorities recognized in the 1944 White Paper on Employment Policy?

Emphasis on privatization of industries.

Reduction of social security contributions.

Expansion of military funding.

Commitment to maintaining high and stable employment. (correct)

What was one of the significant distortions caused by state-controlled development?

Stifling of public sector industries. Signup and view all the answers

Which of the following benefits were proposed by the Beveridge Report?

Pensions for retired citizens. Signup and view all the answers

What does the term 'welfarism' generally refer to in the context of the welfare state?

Government programs aimed at improving social conditions. Signup and view all the answers

What was the primary focus of the Planning Commission in the welfare state context?

Centralized economic planning for development. Signup and view all the answers

Which welfare measure does the government typically implement for agriculture?

Providing subsidized fertilizers and free resources. Signup and view all the answers

Which Article states that childhood and youth should be protected against exploitation?

Art 39 Signup and view all the answers

Which provision ensures the right to education and makes it a fundamental right?

86th constitutional amendment Signup and view all the answers

Which Article promotes the educational and economic interests of the weaker sections of society, especially SCs and STs?

Art 46 Signup and view all the answers

What provision has been made for women in the workplace as part of the directive principles?

Maternity relief Signup and view all the answers

Which act was initiated to provide free and compulsory education to children?

Sarva Shiksha Abhiyan Signup and view all the answers

Which Article emphasizes that the state shall endeavor to implement a Uniform Civil Code?

Art 44 Signup and view all the answers

What is a significant feature of the Panchayati Raj as outlined in the directive principles?

Constitutional status given to Panchayati Raj Signup and view all the answers

What does Article 47 focus on in the context of state policies?

Improving public health and nutrition Signup and view all the answers

What was one of the first major acts following the Labour Party's victory in 1945?

National Insurance Act 1946 Signup and view all the answers

Which of the following industries was nationalised in 1948?

Electricity Signup and view all the answers

Which constitutional article in India pertains to promoting social, political, and economic justice?

Article 38 Signup and view all the answers

What is one interpretation of a welfare state?

Comprehensive responsibility of the state for citizen welfare Signup and view all the answers

Which principle emphasizes distribution of wealth so that it does not concentrate in a few hands?

Article 39 Signup and view all the answers

What aspect of welfare does the welfare state NOT provide according to the content?

Private housing for the wealthy Signup and view all the answers

What does Article 45A of the Indian Constitution advocate for?

Right to education for children below 6 years Signup and view all the answers

Which of the following is NOT included in the welfare provisions mentioned?

Income tax reduction Signup and view all the answers

What was a significant issue noted during the Nehruvian era in policy-making?

Undue influence of bureaucrats on politicians Signup and view all the answers

What was one of the notable consequences of the 6th Plan initiated in 1980?

Famine conditions in several states Signup and view all the answers

What was the main focus of the 7th Plan from 1986 to 1992?

Food, work, and productivity Signup and view all the answers

What major economic developments occurred in India in 1991?

Liberalisation, Privatisation, and Globalisation Signup and view all the answers

What was one reason for the failure of the Planning Commission's approach?

Bureaucratic resistance to change Signup and view all the answers

What did Nehru acknowledge as his greatest failure regarding governance?

Continuance of a colonial administration Signup and view all the answers

Which of the following was a direct result of the economic challenges posed by globalization?

Ineffective bureaucratic responses Signup and view all the answers

Before the 1970s, what primarily characterized policy analysis in India?

Policy-making issues Signup and view all the answers

Which commission is primarily responsible for the centralized planning through five-year plans?

Planning Commission Signup and view all the answers

What percentage share do Special Category States receive according to the Gadgil Modified Formula?

30% Signup and view all the answers

Which type of assistance is provided for the implementation of externally assisted projects?

Additional Central Assistance Signup and view all the answers

What does the term 'Discretionary Transfers' refer to in the context of the Planning Commission?

Transfers controlled by the Planning Commission's discretion Signup and view all the answers

What is the role of the Finance Commission in the context of federal transfers?

Assist in the distribution of financial resources between centers and states Signup and view all the answers

Under which article are Non-Plan Grants made available?

Article 275 (1) Signup and view all the answers

What does ACA stand for in the context of Plan Transfers?

Additional Central Assistance Signup and view all the answers

Which of the following is NOT a Centrally Sponsored Scheme?

State Employment Program (SEP) Signup and view all the answers

Study Notes

Session 4-A: Financing Welfare

Topic: Welfare State, Case Studies in Centrally Sponsored Schemes
Presenter: Prof Govinda Bhattacharjee

Session Structure

Welfarism and welfare state
Planning era distortions and Discretion Raj
Budget and Welfare Expenditure
Requirements of good policy
Case Studies: Centrally Sponsored Schemes, Bolsa Familia, Beto Bachao Beti Padhao

Fundamental Assumptions behind Policy Making

Welfare State: State controlled development for nearly 7 decades. Public sector dominates the economy, stifling the Public sector.
Soviet Model of centralised Planning
Planning Commission
Reservation for weaker sections in education and employment: SC/ST/OBC
Article 16(4): Allows state reservation of appointments for backward classes not adequately represented
Subsidies for the poor: Food, petroleum
Relief for agriculture: No tax, subsidized fertilizers, free electricity and water for farmers
Distortions caused

Origin of Welfare State: UK

On December 1st, 1942, Sir William Beveridge's review of social security was published in UK. It aimed to eliminate 'Want, Disease, Ignorance, Squalor, and Idleness'.
The Beveridge Report proposed a comprehensive social insurance system 'from cradle to grave'.
All working people contributed to the state for benefits for the unemployed, sick, retired and widowed.
Aims included maintaining an acceptable minimum standard of living in Britain.
Publication of Employment Policy White Paper in 1944 was heavily influenced by Keynesian ideas, aiming to maintain a high and stable level of employment.
British public support for the policy led to the Labour party's landslide victory in June 1945.
National Insurance Act 1946, National Assistance Act 1948, National Health Service 1948, etc. were enacted.
Nationalisation of industries (coal 1947, railways/gas/electricity 1948, steel 1951) followed.

What is a Welfare State?

Two interpretations:
- Comprehensive model: state assumes primary responsibility for all welfare aspects, considered a universal "right".
- Social safety net model: creating minimum standards of welfare (education, housing, sustenance, healthcare, pensions, unemployment insurance, etc.)

Welfare State in India

Part IV: Directive Principles of State Policy (Art 36-51): Not enforceable but fundamental to governance.
Principles promoting social and economic equality (Art. 39, 40, 41, 43A, 45A, 46).
State should ensure adequate means of livelihood, fair distribution of resources, wealth not concentrated in a few hands, equal pay, decent standard of life, education for children below 6, participation of workers in factory management, protection of SCs, STs.
Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989
Childhood/youth protected against exploitation.
State should ensure the right to work, education, and assistance in cases of unemployment/old age/sickness.

Application of Directive Principles in Public Policy

Minimum wages fixed, equal wages for equal work, rural employment programs, village Panchayati Raj, free/compulsory education, laws to protect children/women, welfare for poor/SCs/STs.

Historical Evolution of Policy Making in India

Nehruvian Socialism: Socialistic Pattern of Society
Elitist model: IIT, IIM rather than focusing on primary education, health.
Planning Commission led growth: Low growth, high unemployment, poverty, brain drain.
Futile bureaucratic reforms, strong vested interests/bureaucrats/politicians.
Emphasis on individual ability over systemic change from colonialism, inadequate governance.

Evolution of Public Policy

6th Plan (1980-81 to 1985-86): Increase in national income, technology, reducing poverty/unemployment, but led to famines.
7th Plan (1986-87-1991-92): Focus on food, work, productivity, but led to worsening economic conditions.
Severe distortions in Public Financial Management: Centrally Sponsored Schemes, Direct Off-Budget transfers, economic reforms of 1991.
Liberalization, privatization, globalization caused economic challenges.
Bureaucracy/government size/political will issues hindered reforms.

Indian Scenario: Case Study

Before 1970s, policy analysis focused on creation rather than implementation.
Implementation of policies done mainly via Planning Commission—centralized planning via 5 year plans with lack of accountability.
Many plan schemes examples of implementation failure.

Case Study: Plan Transfers

Federal Transfer of Resources: Finance Commission & Planning Commission Transfers (including Article 275 (1)).
Discretionary transfers of Planning Commission (1951-84) >60% of total.
Scheme of Plan Transfers: Normal Central Assistance (NCA), Additional Central Assistance (ACA), ACA for Centrally Sponsored Schemes, Special Central Assistance (SCA), Advance Central Assistance.

Centrally Sponsored Schemes (CSS)

Policies evolved from the Directive Principles of the Constitution, aimed at promoting welfare.
"Secure a social order for the promotion of welfare of the people", "early childhood care and education to children below the age of six", and the right to work are central points of the schemes.
Gol Resolution of 1950 noted the need for promoting welfare to advance living standards via resource exploitation.
No transfers from the Centre to meet the needs of the schemes are envisaged.
Direct Off Budget Transfers

Total Central Plan Assistance Received by States

Data on assistance to states and UTs, 1997-2012-13 BE (through budget/off budget).

Total Central Assistance (TCA) Received by States

Data on statutory transfers, plan transfers, discretionary transfers, and total transfer from 5th plan to 11th plan, presented in a table.

Number of Centrally Sponsored Schemes

Number of centrally sponsored schemes from 5th to 11th plans, from 190 to 147, presented in a table.

Aberrations of CSS

Questionable Schemes, corruption, leakages, waste, political factors, diversion of funds to ruling party.
Doling out funds to rural electorates.
Restructuring schemes to 6 core, 22 core, and 2 optional schemes.

Restructuring of Centrally Sponsored Schemes

Changes in the core number of schemes to 38 in 2022-23 and 41 in 2023-24 budget plus 700+ Central Sector schemes.
Core schemes, optional schemes, and funding patterns

Expenditure on Major Flagship CSS

Expenditure data for major flagship CSS in 2019-20 through 2024-25 BE (Rs Lakh Crore), presented in a table.
Expenditure and share (%) of expenditure on all schemes.

Designing Effective Public Policy

Focus on rationality and choice, consultation, building accountability, and acceptance from the people.
Successful policies address needs and use impactful methods such as evidence based design, well-targeted policies (e.g., Balika Cycle Yojana, Malaria control, Swacch Bharat), collaboration/institution building.

Rational Choices: Evidence-Based Design

Social policies beyond government assistance and proactive engagement, using string-attached conditional cash transfers to incentivize positive outcomes.
Examples: Conditional Cash Transfers (CCTs) in Brazil (Bolsa Familia), Progressa/Opportunidades in Mexico.
Importance of effective programme design and consideration of individual situations in terms of income.

Bolsa Familia, Brazil

Largest conditional program, addressing inequality, poverty, hunger across Brazil, including rural-urban gaps, with 75% beneficiaries being Afro-Brazilians and 54% being women by 2015.
Increased employment opportunities for women, especially through formal sector jobs.
Strong program design and management enabled success (coordination, evidence, support).

Reasons for Success

Clarity of objectives (reducing specific issues: hunger, inequality, poverty).
Program strength (evidence from other programmes).
Feasibility (rapid scaling up).
Alignment among government levels/agencies for consistent goals and implementation.
Robust multi-layered management and efficient use of resources.

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Description

Explore the complexities of welfare state financing in this session led by Prof. Govinda Bhattacharjee. This quiz covers key topics like welfarism, budget allocations, and various centrally sponsored schemes, including Bolsa Familia and Beto Bachao Beti Padhao. Test your understanding of the underlying policy assumptions and their implications.