Pooran Chandra Pandey is the Adviser for the UNESCO Inclusive Policy Lab in Paris, France.
Situational Context
India is the largest functioning democracy with diversity and pluralism like no other anywhere in the world. Multiple communities, languages, traditions, and weather conditions at the federal and sub-national levels further shape and underpin its geographical expanse more uniquely on an unprecedented scale. The country also stands out on its population, currently at over 1.4 billion people spreading across the length and breadth of rural, semi-urban and urban centres. This side of the issue presents multiple and simultaneous opportunities and challenges for the nation – demographic dividends as well as potential challenges such as poverty, vulnerability, and subsistence issues across a substantive expanse of the country. These issues are dynamic and tend to abate and aggravate with changing situations across the economy, health and employment statuses. They need policy responses from both federal and sub-regional governments and positive collaboration between the government, private sector, and civil society to address issues and provide solutions that serve the poor and the vulnerable in a time-specific manner.
Poverty Eradication through Welfare
Out of the country’s more than 1.4 billion people, about 15 per cent in 2019-21 (down from about 25 per cent in 2015-16) are multidimensional poor, according to NITI Aayog National Multidimensional Poverty Report, 2023. This exceedingly high percentage of poor people is putting pressure on public finances and instruments of the governments – both federal and sub-regional – in being able to take care of welfare measures and schemes effectively.
There are multiple pathways to satisfactorily work the solutions, not through a charity or corporate social responsibility mode alone, but by introducing smarter solutions aimed at solving the issues of poverty and vulnerability before the twin issues take an adverse toll both on the social and economic dimensions of the human well-being and their welfare, including economic development to stay healthy.
It is worth mentioning that there are about 1000 welfare programmes and schemes respectively administered by the federal (300 welfare schemes) and sub-regional (650 welfare schemes) governments, incurring about INR 14 Lakh Crores, over USD 200 billion in dollar equivalent, making India one of the largest welfare-oriented nations in its class and category in the world.
The fact that the Indian Government feeds over 80 crores of poor and vulnerable through its targeted schemes and welfare measures is a feat in itself. This welfare scheme that started during the pandemic will continue till 2028. The Union Ministry of Social Justice and Empowerment has played a critical role in improving the plight of the poor and the vulnerable. It has achieved this by supporting welfare schemes spanning education, social, and economic parameters. The Ministry has successfully addressed challenges such as ghost beneficiaries and duplication of schemes and their recipients by leveraging technologies and implementing targeted benefits and cash transfers. This is no mean task by any stretch of the imagination.
The Indian Government introduced the mandatory provisions of Corporate Social Responsibility under Section 135 by modifying the Companies Act of 1956 in 2013. Operational since April 01, 2014, provisions mandated the private sector to spend up to 2 per cent of their profit on areas and issues related to community and human welfare. Over time, despite multiple amendments and expansions, the initially well-intentioned CSR provisions have gradually been diluted beyond recognition in both scope and vested interests. The concept has also evolved into a different form, with competing claims on private sector finances under CSR provisions and their overall utility.
Public Finances and Private Sector
A task of this magnitude cannot be achieved by the government alone, given the scale and size of the challenges, the state of public finances and population growth going forward. It is an accepted fact that public finances are in short supply around the world. These finances are to be raised, better leveraged, and put to better usage by targetting and removing duplication in welfare schemes, targetted cash and welfare measures. This involves taking out those moving upwardly across socio-economic indicators in a time-bound manner and bringing in those at the cusp of multidimensional poverty remit in time.
This complex challenge faces governments in India and globally. Welfare schemes and programmes need repurposing to function more effectively and extend greater coverage to the poor and vulnerable within the constraints of available public finances. In addition, the situation is also likely to warrant more and better collaboration between the federal and the sub-regional governments with the private sector through a win-win route. There are multiple pathways to satisfactorily work the solutions, not through a charity or corporate social responsibility mode alone, but by introducing smarter solutions aimed at solving the issues of poverty and vulnerability before the twin issues take an adverse toll both on the social and economic dimensions of the human well-being and their welfare, including economic development to stay healthy.
Corporate Social Responsibility and Section 135
In this context, it is worth noting that the Indian Government introduced the mandatory provisions of Corporate Social Responsibility under Section 135 by modifying the Companies Act of 1956 in 2013. Operational since April 01, 2014, provisions mandated the private sector to spend up to 2 per cent of their profit on areas and issues related to community and human welfare. These provisions are linked to their net worth, turnover, and net profit in a given fiscal year under the oversight of the regulatory bodies and agencies.
Over time, despite multiple amendments and expansions, the initially well-intentioned CSR provisions have gradually been diluted beyond recognition in both scope and vested interests. The concept has also evolved into a different form, with competing claims on private sector finances under CSR provisions and their overall utility.
The CSR provisions may need a thorough revisit to bring them under a different set of rules and conditions to repurpose existing welfare schemes and programmes to maintain the operational mechanism to secure the broad ambit for which financial resources are given and spent. This includes aspects less likely to be diluted by elements such as multiple reporting architecture and duplication of implementing agencies. It is crucial for maintaining transparency and trust purposefully. Considering the impact of technology and targeted welfare programmes and schemes, it should be workable to implement real-time monitoring and straightforward reporting. This applies to recipients and private sector donors for better understanding and transparency.
The UN-led 17 Sustainable Development Goals (SDGs) are clear. The first goal is Zero Poverty, with Goal 1.2 stressing the reduction of poverty by half in all its forms by 2030. Additionally, through the sub-set of Goal 16.9, providing a legal entity to citizens prepares India well. It can harness its strength in public digital infrastructure (PDI) and various welfare programmes and schemes. By uniting these efforts, India can leapfrog in a direction that offers a differentiated yet unique solution to inequality, poverty, and marginalisation. This can be achieved through a public-private partnership built on the foundational principles of intergenerational socio-economic equality and opportunities.
Need to Repurpose Welfare Schemes and Social Policies
Given the complex and multidimensional nature of poverty and vulnerability, it is necessary to develop new tools and mechanisms to alleviate poverty and strengthen safeguards against relapse into deprivation. This is particularly important for the majority of people in India who fall below the poverty line and require multiple simultaneous solutions to their problems. It is necessary to adopt a new approach to policy-making that considers implementing universal basic income tools in the current context. Repurposing welfare schemes and programmes and implementing new social policies to eradicate poverty in the digital age is crucial. This is not only necessary to address the marginalisation of communities but also to empower them long-term, and sustainably.
Global Goals
The UN-led 17 Sustainable Development Goals (SDGs) are clear. The first goal is Zero Poverty, with Goal 1.2 stressing the reduction of poverty by half in all its forms by 2030. Additionally, through the sub-set of Goal 16.9, providing a legal entity to citizens prepares India well. It can harness its strength in public digital infrastructure (PDI) and various welfare programmes and schemes. By uniting these efforts, India can leapfrog in a direction that offers a differentiated yet unique solution to inequality, poverty, and marginalisation. This can be achieved through a public-private partnership built on the foundational principles of intergenerational socio-economic equality and opportunities.
India’s Opportunity
India’s growing role and stature, both regionally and in the comity of nations, call for new paradigm shifts in how it matches its economic growth with the improved well-being of its people by repurposing its ongoing welfare schemes and programmes. These efforts can yield positive outcomes on the ground. But to truly make a substantial impact on people’s lives, it is crucial to explore public-private partnerships. Additionally, maximising the effectiveness of federal sub-regional collaboration and leveraging innovative policy instruments is essential.
India is currently in a better position to unlock potential economic opportunities for its poor and low-income groups through welfare programmes and schemes while conjoining its national goals with global sustainable development goals.
