The time for a universal welfare agenda is now

Source: By Suvojit Chattopadhyay , Radha Khan: Mint

The world over, the covid-19 pandemic crisis has re-established the writ of the state. States have galvanized hundreds of healthcare and social workers to fight this crisis. Even the world’s most developed economies have been struggling to manage. They have imposed restrictions on movement of people and goods announced relief measures, and in many instances, taken charge of private establishments as quarantine or recovery facilities, or to manufacture essential goods and services. The welfare state is back in fashion.

The economic crisis brought upon us by covid-induced lockdowns has laid bare the quality of public services especially in developing countries. It is now obvious that we have been building up to this scenario. Developing countries suffer from poor quality public services in general; public health infrastructure or rather the lack there of, is in the spotlight at the moment, but other critical functions of the government such as social safety nets, public works, and law-and-order suffer from systemic weaknesses. For example, an earlier article by one of us, highlighted how India spends a shockingly low percentage of GDP, just 1.28% on health. It has been pointed out that India has one government doctor for nearly 11,000 people. The World Health Organisation standard is one doctor for 1,000 people. Even with private-sector doctors, India does not meet that minimum.

Take another example: the Indian state appears to have overlooked the needs of a significant section of its most vulnerable population—migrant workers often on daily-wages—when it announced the country’s first 21-day lockdown, and so again when it was extended until 3 May. While relief measures were announced, it was largely left to ordinary citizens and social activists to come to their rescue with soup kitchens and other aid materials. This pandemic has revealed that the vast majority of the informal sector workers, largely in cities, have no state support available. A vast number, it is now becoming clear, are undocumented and hence ineligible for even the meagre provisions announced by governments.

These are merely two examples that point to a wider trend across the social sector. A key reason cited for this neglect and inadequate levels of public expenditure is “fiscal discipline", which appears to have become an article of faith among some economists and policymakers. Budget cuts to social welfare are routinely passed off as “reforms". The Fiscal Responsibility and Budget Management Act (FRBM Act), 2003, was passed in Parliament to bind the government to a “glide path" of gradual reduction in the fiscal deficit. Over time, the FRBM was seen forcing the hands of governments, and more often than not, their response to revenue deficits was to squeeze social welfare schemes.

The mitigation measures against this raging pandemic entail heavy human costs. As countries implement evermore strict lockdowns, social safety nets (and more broadly, social welfare policies) have emerged as one of the key policy levers in the hands of governments to address the immediate effects of the economic downturn. These schemes range from cash transfers to transfers in kind, such as food grains and other goods for essential consumption, attempting to ensure food security for all. These welfare schemes are targeted at the poor and the lower middle class, and informal sector workers, who make up a large proportion of the labour force in developing countries.

A welfare agenda is one that creates “capabilities" among the less privileged, weaves a social safety net that provides security to the poor, and adopts policies of positive discrimination to enable groups of people to overcome the disadvantages of long-standing social and economic deprivations. It is what Amartya Sen and Martha Nussbaum advocated when they spoke of the “capability approach". The welfare agenda is not about “freebies". It rests on ensuring equal access to quality healthcare and education and equitable access to economic opportunities.

A universal welfare agenda can also make for good politics. Building a wide coalition of people who benefit from a pro-poor welfare agenda creates a strong link between the government and citizens. It sets expectations for what governments can be held accountable for. Universal welfare schemes, such as the old-age pensions in Uganda or Nepal are relatively straightforward to implement. India’s national jobs guarantee scheme is a self-selecting programme that provides minimum wages on demand for unskilled labour. There is now substantial evidence from across the world that for basic social security schemes such as old-age pension, universal coverage not only scores higher on equity, but is also administratively efficient and cost-effective.

This is the right time for governments to commit themselves to a sustained welfare agenda. An economic recovery will require much more than just social welfare policies. The adoption of immediate relief measures is an acknowledgement that fiscal spending must aim to secure the well-being of the worst off first. But beyond immediate measures, there is an urgent need to remodel social welfare and social sector policies to cater especially to the most vulnerable in our society.

Informal sector workers, irrespective of whether they work in their home states or are economic migrants, need social housing that includes basic essential services such as regularised water supply and electricity. Public health infrastructure has to be improved significantly so that pandemics do not overwhelm our health systems. Far-reaching governance reforms are needed to ensure that public services are controlled and delivered by agencies at the appropriate level (national or sub-national) with clear mechanisms for social accountability.

These proposals are not new. A crisis of these proportions is an opportunity to rethink policy.Securing commitments to increase the level of social sector spending and to implement far-sighted and transformative reforms will prove vital in determining how prepared we are for the next crisis.