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Editorial Articles

Issue no 19, 05-11 August 2023

The Transition of Social Protection in India: From Schemes to Systems

Avinash Mishra & Madhubanti Dutta

Social security, as defined by the International Labour Organization (ILO), encompasses a wide range of protections provided by society to individuals and households. Its primary objectives are to ensure access to essential healthcare and guarantee income security, particularly in times of vulnerability such as old age, unemployment, sickness, disability, work-related injuries, maternity, or the loss of a breadwinner. Social security programmes encompass various benefits, including insurance, pensions, disability benefits, and unemployment benefits, among others. These instruments aim to establish a basic level of income and access to healthcare for all members of society while creating safety nets during times of crisis. The concept of social security is integral to achieving sustainable development and inclusive growth. It helps reduce poverty, inequality, and social exclusion, providing a foundation for individuals and families to live a dignified life and contribute to the economy. By providing income support and access to essential services, social security plays a vital role in promoting social well-being, economic stability, and human development.

In pursuit of the Sustainable Development Goals (SDGs), social protection serves as a critical tool for empowering people, enhancing human capital, and creating resilient societies. It fosters economic productivity by enabling individuals to invest in education, health, and entrepreneurship, while simult-aneously reducing the risk of falling into poverty due to unexpected events or economic downturns. Universal social protection is a shared responsibility, and its successful implementation requires the collaboration of governments, inter-national organisations, civil society, and the private sector. By joint forces, stakeholders can strengthen social protection systems, ensure their sustainability, and contribute to the achievement of the SDGs' broader objectives. In conclusion, social security, in its broad definition, plays a vital role in promoting social justice, economic stability, and sustainable development.

Sustainable Approach: A sustainable financing approach towards social protection is vital for ensuring the resilience and effectiveness of social security systems. By combining progressive universalism, balanced funding sources, inclusive design, effective delivery mechanisms, evidence-based policy, public-private partnerships, cost-benefit analysis, and long-term planning, countries can create social protection systems that provide equitable support to all citizens and protect the most vulnerable in society. A well-financed and efficiently managed social protection system not only enhances the well-being of individuals and households but also contributes to broader economic and social development goals. A sustainable financing approach towards social protection is essential to ensure the long-term viability and effectiveness of social security systems. As countries endeavor to establish robust social protection systems that enhance the economic resilience of vulnerable populations and offer equitable protection for all, careful attention must be given to financing considerations.

1.       Progressive Universalism: A sustainable financing approach should be grounded in the principle of progressive universalism. This means that social protection systems should strive to provide essential support to all citizens while targeting additional resources towards those who are most in need. By combining universal coverage with targeted assistance, countries can ensure that everyone has access to basic social security, while also prioritising support for the most vulnerable.

2.       Balanced Funding Sources: To achieve financial sustainability, social protection systems should strike a balance between state-sponsored and privately-funded schemes. Governments play a crucial role in funding social protection programs, but partnerships with private entities, non-governmental organisations, and the business sector can help diversify funding sources and ensure a more resilient financial base.

3.       Inclusive Design: The design of social protection programs should take into account the diverse needs of the population. Different demographic groups may require tailored solutions, and consideration should be given to the unique circumstances of women, children, elderly, persons with disabilities, and other vulnerable groups.

4.       Effective Last-Mile Delivery: Efficient and effective delivery mechanisms are essential to ensure that the benefits of social protection reach the intended beneficiaries through DBT. Digitisation, streamlined administrative processes, and robust monitoring systems can enhance the efficiency of delivery, minimising leakages and ensuring resources are directed to those who need them the most.

5.       Evidence-Based Policy:  A sustainable financing approach should be informed by data and evidence. Governments should invest in research and data collection to understand the needs and challenges of their populations accurately. Evidence-based policymaking can lead to more targeted and cost-effective social protection programs.

6.       Public-Private Partnerships: Engaging the private sector through public-private partnerships can bring in additional resources and expertise to support social protection initiatives. Collaboration with private entities can help design innovative financing models and expand the reach of social protection programs.

7.       Cost-Benefit Analysis: Assessing the cost-effectiveness and long-term impact of social protection schemes is crucial. Conducting rigorous cost-benefit analyses can help identify the most efficient programs and allocate resources strategically to achieve the desired outcomes.

8.       Long-Term Planning: Social protection systems should be planned with a long-term perspective, taking into account demographic changes, economic fluctuations, and evolving social needs. By adopting a forward-looking approach, countries can build sustainable systems that adapt to changing circumstances over time.

The global experience indicates that achieving universal and adequate social protection is challenging when there are numerous state and central schemes operating independently without coordination. Many emerging economies have recognized the importance of comprehensive coverage and have successfully pursued program consolidation and convergence to achieve their social protection goals.

For instance, countries like Brazil have streamlined their social protection initiatives by integrating various schemes into a cohesive system. This approach combines the delivery of cash transfers to impoverished households with the provision of health, nutrition, and education services. This integration allows for a more efficient and holistic support system for those in need.

Similarly, China and Indonesia have taken a focused approach by implementing fewer than ten national social assistance programs each. In contrast, India has historically managed many benefit-transfer schemes at both the national and state levels, which can lead to fragmentation and inefficiencies, if not monitored rigorously.

By streamlining and consolidating social protection schemes, countries can achieve several benefits:

1.       Enhanced Efficiency:  An integrated system reduces administrative burden and overlaps, leading to cost savings and better resource allocation.

2.       Improved Targeting: Consolidation allows for more accurate identification and targeting of beneficiaries, ensuring that assistance reaches those who need it the most.

3.       Increased Coverage: Comprehensive programs have the potential to cover a larger portion of the population, reducing exclusion errors.

4.       Holistic Support: Integrating different services can lead to a more comprehensive support structure, addressing multiple dimensions of vulnerability.

5.       Sustainability: A consolidated system may be easier to manage, maintain, and adapt to changing circumstances over time.

However, it is crucial to recognize that each country's social protection needs and context are unique. While lessons from other countries can offer valuable insights, the design and implementation of social protection systems must be tailored to suit the specific circumstances and challenges faced by each nation.

Moving towards a more integrated and streamlined social protection system is a complex process that requires careful planning, coordination, and political will. It involves collaboration between various government departments, stakeholders, and civil society to ensure the effectiveness and success of the reforms.

Prime Minister Shri Narendra Modi’s  vision of tailored social protection schemes highlights the crucial importance of recognizing and addressing the diverse socio-economic circumstances of country's population. In the context of India, a nation known for its vast cultural, economic, and regional diversity, the government has implemented a range of social protection programs to uplift the disadvantaged, enhance livelihoods, and foster inclusive growth. These initiatives are meticulously designed to cater to the unique challenges faced by different segments of the population, ensuring a holistic approach to social welfare and development.

1.       Pradhan Mantri Ujjwala Yojana: PMUY is a social welfare scheme aimed at providing clean cooking fuel, primarily LPG, to women living below the poverty line. The scheme was launched to address the health hazards caused by traditional cooking fuels like wood and coal, particularly for women and children.

2.       Ration Distribution : The Public Distribution System (PDS) is a food security programme that provides subsidized food grains to eligible beneficiaries through Fair Price Shops. This initiative ensures that essential food items are available to economically disadvantaged households at affordable prices.

3.       MUDRA (Micro Units Development and Refinance Agency) Yojana: MUDRA is a financial inclusion scheme launched to provide loans to micro and small enterprises. It aims to support small entrepreneurs and promote self-employment by offering financial assistance through various lending institutions.

4.       Pradhan Mantri Gram Sadak Yojana: PMGSY is a rural road connectivity program aimed at providing all-weather road access to remote and unconnected villages in India. The scheme focuses on improving rural infrastructure and facilitating better connectivity for economic and social development.

5.       Pradhan Mantri Awas Yojana : PMAY is a housing scheme launched to provide affordable housing to the urban and rural poor. The initiative aims to address the housing shortage in the country and improve living conditions for vulnerable sections of society.

6.       Old Age Pension: The government provides various old-age pension schemes, such as the National Social Assistance Programme (NSAP), to support senior citizens who do not have sufficient means of income. These pensions act as a social safety net for the elderly, ensuring financial security during their old age.

7.       Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana: Ayushman Bharat is a comprehensive health insurance scheme that aims to provide health coverage to vulnerable families, especially those below the poverty line. PM-JAY offers cashless treatment for secondary and tertiary healthcare services to beneficiaries at empaneled hospitals.

8.       National Social Assistance Programme: The National Social Assistance Programme (NSAP) encompasses various pension schemes catering to the elderly, widows, and disabled individuals. This targeted approach provides a social safety net to the most vulnerable groups, ensuring they receive financial support during their old age or disability, preventing them from falling into destitution.

9.       Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana:  The Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) exemplify tailored social protection through insurance coverage. These schemes provide affordable accidental and life insurance to economically vulnerable sections of the population. In the event of unforeseen adversities, such as accidents or loss of life, these insurance covers offer financial support to families, easing their burden during challenging times.

10.   Pradhan Mantri Jan Dhan Yojana: Financial inclusion is a major challenge in India, particularly among the economically vulnerable sections. The Pradhan Mantri Jan DhanYojana this scheme is a tailored approach to tackle this issue head-on. By providing basic banking services such as savings accounts, remittances, credit, insurance, and pension to the unbanked and underbanked, PMJDY seeks to integrate millions into the formal banking system, promoting financial security and empowering individuals and families economically.

11.   Mahatma Gandhi National Rural Employment Guarantee Act: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a landmark initiative that directly addresses the issue of rural unemployment and poverty. Tailored to India's predominantly agrarian economy, this scheme guarantees 100 days of wage employment to every rural household, allowing them to earn a livelihood while creating productive assets in villages. This scheme not only uplifts the socio-economic status of the rural poor but also contributes to sustainable rural development.

12.   Triple Talaq (Instant Divorce) Ban: The government enacted a law to criminalize the practice of instant divorce (triple talaq) in Muslim marriages. The law was introduced to protect the rights and dignity of Muslim women and ensure gender equality in the realm of divorce.

Conclusion: Transforming from individual welfare schemes to integrated social protection systems represents the future of social protection in India. This transition aims to create a comprehensive and cohesive approach that addresses various social and economic vulnerabilities by moving away from fragmented initiatives. The vision includes greater integration, universality, and data-driven efficiency, enabling seamless access to essential services for all citizens. By shifting the focus from schemes to systems, India seeks to build a sustainable and adaptive framework that caters to the diverse needs of its population.

(Avinash Mishra is Adviser, NITI Aayog whereas Madhubanti Dutta is a Young Professional there. Views expressed are personal and do not reflect the official position or policy of the Employment News. You can send us your feedback on this article at feedback.employmentnews@gmail.com)