Welfare Economics

Prime Minister Modi has secured voter trust through his agenda of welfare programmes.

Among the programmes that stand out in the overall welfare bouquet are: One, Ayushman Bharat has improved capacity utilisation of healthcare infrastructure through better monitoring. Combining insurance and technology, the scheme has revolutionised delivery of free and quality healthcare services. 40 lakh poor Indians have availed free insurance benefits in less than a year, without having to do any paperwork. Two, Swachch Bharat is changing the behaviour towards cleanliness and hygiene. India is now an ‘open defecation-free’ country, as declared by Prime Minister Modi on the occasion of the 150th birth anniversary of Mahatma Gandhi. It’s only a matter of time when this achievement will lead to improvements in health outcomes. And three, PMGSY, DDU-GKY and other rural schemes for low-cost housing, electricity connections, cooking gas connections, no-frills bank accounts and MUDRA loans.

These schemes for skilling, physical and financial rural infrastructure will unleash entrepreneurial energies in the villages and unlock the economic potential there, reducing the India-Bharat divide.

Key Issues:

  • Are welfare schemes sustainable without supporting systemic reform for ensuring there’s no undue pressure on state and central government finances and future liabilities?
  • Having got the key welfare schemes right, should the next logical steps such as convergence of schemes and a complete digital delivery be taken?
  • If despite a host of welfare schemes rural consumption is slowing, then does the approach need a re-look?