As published in the Volume 2(1) of Ramjas Political Review
Abstract
This essay explores the evolution of the welfare state and examines the specific trajectory of the Indian welfare state, tracing its development from the post-independence period to the present day. In the Indian edition, the essay examines how welfare measures, initially limited to food security, expanded their role to include health, education, and employment. The essay critiques the limitations of India’s welfare state, highlighting challenges posed by social cleavages, insufficient local governance resources, and flawed assumptions about human nature. Through this analysis, the paper argues that while India has made strides in welfare provision, it faces persistent barriers in translating public goods into meaningful social outcomes, especially in areas affected by societal norms and local governance weaknesses.
Keywords: Welfare State, Economy, Society, Public Provisioning, Local government
Introduction
The idea that the state is or should be the agency of human welfare is nothing novel. Aristotle (350 BC) asserts that a state is a natural outgrowth of human social life and its primary purpose is to promote the common good and enable individuals to live a life of virtue and fulfilment. It arises out of the need to fulfil human desiderata which cannot be met by individuals alone. Thus, the state exists for the purpose of allowing men to achieve eudaimonia, the just state must therefore be one that allows its citizens to flourish (Yian, 2021), i.e., a state originates for the physical welfare of human beings but continues to exist for their moral welfare. The Shanti Parva of Mahabharata (Vyasa, n.d.), too explains the ideal state as one where the ruler’s governance aligns with the broader principles of dharma, leading to a just and harmonious society. It states that the state came into origin when sinfulness prevailed in the world and thus, the maintenance of Dharma by the King meant protection of the social order of family wealth, property, and communities (Garg, 2004).
What is novel about it is the coinage of the term where the state is not regarded as the agency of moral welfare but as an instrument of economic welfare. It is evident from the multiple definitions of what constitutes a welfare state. For instance, Dr Abraham defines it as a community where state power is deliberately used to modify the normal play of economic forces so as to obtain a more equal distribution of income for every citizen, a basic minimum real income irrespective of the market value of his work and property (Ghosh, 1954, p. 328). This emphasis on the economic aspect of the welfare state is historical but does not express the welfare state in its truest sense. The essay will deconstruct the meaning of the welfare state in the following sections.
Origin and Evolution of Welfare State
Historically, the individualistic political setting enunciating equality and liberty coincided with an unprecedented period of prosperity. The nations were moving towards a force of industrialisation, but this prosperity came into the hands of a few at the cost of many. And these fortunate few who held material power wielded social power in similar proportion. This negatived equality and liberty becomes a myth in the absence of equality. These few, in possession of wealth, at the cost of the liberty of many, diluted the concept of freedom — and redefined it as freedom from state interference. Due to this, they could run unencumbered factories of exploitation and injustice (Ghosh, 1954). This reduced the role of the state to what Nozick (1974) called a “night watchman”. It allowed the market economy to operate with individuals who, at least theoretically, were considered free. But even when Adam Smith advocated for free markets in his The Wealth of Nations (1776), he expounded on the limited but necessary role of the state. He expanded on three duties of the government – protecting the society from violence and invasion of other independent societies, protecting every member of society from injustice and oppression of others by proper administration of justice, and erecting and maintaining public institutions for the greater welfare of the society (Patton & Lipford, 2020).
Gradually, the realities of injustice within social order became clear. Problems of insecurity, inequality, and instability were produced by capital accumulation and market processes. The depressions of the 1890s and 1930s made the belief in a laissez-faire market weak and the political class all across advocated for stabilised markets and assured full employment. But to be ‘for’ the welfare state did not mean being against capitalism; it just meant the social control of economic processes for stability. Keynes too, when propounded for a broader role of the state for this purpose, observed that welfare states were not a means of destroying capitalist market processes; they were a set of collective action techniques for its more efficient management (Garland, 2016).
Then the question arises: what, in fact, is really a welfare state? Some of the misunderstandings come from the term ‘welfare’ in the phrase which often leads to the misconception that welfare states primarily focus on aid for the poor. However, they are fundamentally about social insurance, social rights, social provision, and the social regulation of economic action — the chief beneficiaries of which are not just the poor but also the middle classes and those in employment (Garland, 2016). Second, the welfare state does not constitute the whole state; it is a specific mode of governing. Therefore, the welfare state is just a function of a larger state which engages in other activities too, such as expenditure, trade, and defence. Third, welfare states evolve and undergo over time to suit the needs of relative states of which they are a part. The welfare state of a developed country differs from that of a developing country based on the needs and conditions of its population. Welfare states take up various forms, some are more generous than others, while some have a fixed role to play; nonetheless, they have become an indispensable part of modern states.
In 1909, a young Beveridge published his Unemployment - A Problem of Industry advocating for an active role of the state in correcting the market failures. With time, it came to be accepted that unemployment has not only to do with individual capabilities but also with the organisation of society and the state, and that, the state could no longer disown it as a problem of the free market. After the two world wars, the Labour government with conservative ideas implemented various social security policies, such as those which catered to full employment, health services, and food subsidies. Lord William Beveridge’s Social Insurance and Allied Services (1942), also known as the Beveridge Report turned out to be influential in the foundation of a welfare state in Britain. In the development of the idea of a welfare state, one thing has been made very clear — the emphasis on the economic aspect of welfarism.
Welfare State: The Indian Edition
The modern idea of a welfare state in India is a foreign import. And with this, the limitations of welfare states in the state of origin are also incorporated in the Indian form. Shedding light on the Ajmer resolution (1954) which says, “This necessarily involves the elimination of unemployment, the production of much greater wealth in the country, and the proper and equitable distribution of this among the people. For this purpose, the present social structure, which still continues to be partly based on an acquisitive economy, has to be progressively changed into a socialised economy” (AICC, 1954). This clearly puts emphasis on the economic side of welfare. Not only this, it also reveals some confusion between a welfare state and socialism. If socialism could be accepted by countries all across as a medium to achieve ultimate human welfare, there would not be a need to create a welfare state. As Ghosh (1954) puts it, a welfare state is a social service state within the philosophical framework of individualism and institutional organisation of the private economy, though planned. The United States is a welfare state in the sense that it provides some considerable social services to its citizens — health, food subsidies, old age pensions, et cetera but to no stretch of definition, it is a socialised economy.
Historically, India’s welfare measures have been based on calorie-centric and money-metric assessments, limiting the scope of human prosperity (Rahman & Pingali, 2024). Consequently, the Public Distribution System was first launched after World War II as a centrally-sponsored scheme for food rationing. The Maharashtra Employment Guarantee Scheme, launched in 1973, is a forerunner to the famous Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). However, these schemes lost their importance after the nation became self-sufficient in food grains during the Green Revolution, and were re-designed. Despite high levels of malnutrition in the country, nutrition did not emerge on the policy agenda until the mid-1970s. The Integrated Child Development Scheme was introduced in 1975 on a pilot basis, and its effectiveness remained limited due to poor implementation.
Until the 1990s, social welfare policy was centred around food security. It is evident from the fact that the poverty line was based upon the ‘minimum calorie requirement’. The policy focus had been rural areas and food security, largely due to the history of famines in India (Rahman & Pingali, 2024). Even after the 1990s, with increased focus on fiscal responsibility, the Public Distribution System was restructured and made more targeted. For the first time in 1997, the concepts of Below Poverty Line (BPL) and Above Poverty Line (APL) with ration cards were introduced. It still lingers in the policy space in terms of priority and non-priority households, respectively, in the National Food Security Act, 2013.
As the Indian economy grew in the 2000s, the consistently high poor child nutrition began to attract policy attention, and the Integrated Child Development Scheme saw an expansion. Similarly, a need to strengthen measures against classroom hunger was also felt, which led to the launch of the Mid-Day Meal Scheme (an extension of the erstwhile National Programme of Nutritional Support to Primary Education, 1995).
In 2008, the Indian government launched the Rashtriya Swasthya Bima Yojana, which aimed to provide health insurance coverage to below-poverty-line families. It was also expanded in 2018 under the Pradhan Mantri Jan Arogya Yojana with a larger beneficiary focus. This short introduction to various policies allows one to appreciate the growth trajectory of India from a narrow focus on food security towards an aim of a broader safety net. Many state governments too, have generously implemented such welfare schemes, upholding distinct welfare practices of their own.
Although India has created a strong structure for extending social protection to a large section of its population, its schemes so far have been working as a band-aid to the developmental challenges it faces. For instance, data from India's National Family Health Survey (NFHS) between 1992–1993 and 2015–2016 showed some progress. For example, the prevalence of stunting among children under five fell from 52 per cent to 38 per cent, and the percentage of underweight children declined from 53 per cent to 36 per cent (Nie et al., 2019). However, recent data from NFHS 2019–2020 highlights that progress remained slow. The national rate of stunting marginally improved from 38 per cent to 36 per cent. A state-level comparison of NFHS-4 and NFHS-5 shows that only three states—Bihar, Manipur, and Sikkim—experienced a meaningful decline in stunting rates by at least 3 percentage points, with Bihar's rate falling from 48.3 per cent in 2015–2016 to 42.9 per cent in 2019–2020. Alarmingly, thirteen states and union territories saw an increase in stunting (Vir & Suri, 2021, pp. 8–10).
Why India’s Welfare State Fell Short
This section aims to point out the performance of the Indian welfare state, specifically looking at the paradox of its effectiveness in some areas against inadequacies in others. It argues that India has performed relatively well in macroeconomic indicators, such as Gross Domestic Product (GDP) growth and controlling inflation, but has faced difficulties in addressing microeconomic issues that require improving individual living conditions. It has struggled in areas deeply affected by social divisions, such as caste and patriarchy, and where the local government machinery was required. The slow pace of development is also attributed to India's early transition to democracy and faulty assumptions of human nature, which may have influenced these shortcomings. The following is the explanation of the same.
A Distinctive Democracy
The distinctiveness of the Indian democracy explains the heterogeneity in the performance of the welfare state. This distinctiveness can be explained in three points. Firstly, in the West, the universal franchise was slowly given to people, from property-holding men to all men and then to women, whereas in India, the universal franchise with a democratic setup came in the wake of independence while literacy was just 18 per cent and the life expectancy was 32 years. In both Western democracies and East Asia, universal franchise came after the state had laid the foundations of public goods in education and health, and the structures of the welfare state were built gradually on these foundations (Kapur, 2020). However, in the case of India, public provisioning was followed by redistribution. It is evident from the fact that we had the National Policy on Education (1968 & 1986) and Operation Blackboard (1987) before we had the Right to Education (2009), finally making education a fundamental right for all children.
Since the country had a history of famines, the state chose to focus on vulnerable groups rather than providing everyone with basic amenities. As a result, not everyone benefited from the government’s actions, as the state focused on aiding those most affected. This selective approach led to a loss of trust in the state from those who had means and wealth (the middle and upper class), leading to an inclination towards the private sector for the provisioning of goods combined with a reluctance to pay taxes.
Second, electoral mobilisation along social cleavages; India is a vast country with diverse social groups (based on caste, class, religion, et cetera). This division on various lines, many a time, affects how politicians respond to voters’ demands. So instead of trying to establish a consensus on broad policies and public services that benefit everyone, politicians focus on programs that target specific groups. Due to multiple instances of corruption, the voters have also lost trust in the political class, and because of this distrust, voters prefer to get what they can in the form of targeted subsidies rather than waiting for broader services that might never arrive.
Third, a trend can be witnessed where non-credible politicians tend to emphasise the provision of public goods that are visible and can be provided quickly, like infrastructure over improvement in human capital. It is also because such goods are tangible, easy to monitor, and measurable — the number of toilets built can be counted, but the improvement in the health of the children will take a long time to manifest into measurable results. This trend of subsidised public provisioning of essential goods and services, normally provided by the private sector, such as bank accounts, cooking gas, toilets, electricity, housing, et cetera, has come to be known as New Welfarism.
Inadequate Local Government Resources
The local government expenditure of India in comparison to its counterparts is somewhat skewed. Local government expenditure is 3 per cent of the total government expenditure in India, compared with 27 per cent in the United States and 51 per cent in China (Ren, 2015). Moreover, according to the economic survey (2017-18) by the Ministry of Finance, the reliance of India’s rural local governments on its own resources is just 6 per cent (compared to 40 per cent for third-tier governments in Brazil and Germany), and they raise a meagre 4 per cent of their overall resources as direct taxes (compared with about 19 and 26 per cent in Brazil and Germany, respectively). As a result, central and state governments in India spend on average 15–20 times more per capita than local governments (Kapur, 2020). Given that the basic public goods — from primary health to education, from sanitation to water, and from policing to urban planning — are to be supplied by local governments (although the policies are created by the centre), poor delivery of services in India can be attributed to the lack of resources (both financial and human) at the lowest level of government. India has always been known for its robust bureaucracy and exceptionally good plans for development but the lack of manpower and funds at local levels hinders the developmental process.
Faulty Assumptions of Human Nature
A major flaw in the welfare ideology stems from the faulty assumptions of human nature. Humans tend to work till they can satisfy their needs. Beyond that, they work depending on the availability of material resources to achieve pleasure in the form of comfort and luxury. However, if the basic minimum needs are fulfilled by the state, the individuals would prefer to not work. Venkataraman (1994) argues that one of the assumptions behind the theory of the welfare state is that the individual would transform the socio-economic benefits provided to them by the state into tangible economic wealth as they tend to be productive. Yet, the experience shows that the vast number of beneficiaries neither became productive nor did they contribute to the collective good. The ancient Indian state used to be run by a king considered a paternal figure or provider. Although the figure of a king has become obstinate, the paternal qualities continue to be looked upon and are promoted by the party politics in the country — this creates a receiver-and-giver relationship between the leader and citizens. Moreover, the idea of looking up to someone for the fulfilment of all wants encompasses a spirit of dependence and complacency and a lack of initiative and enterprise. It also generates a kind of superiority in the provider and inferiority in the receiver.
Concluding Thoughts
It is clear from the various examples that the Indian state has been able to perform comparatively well in areas where reliance on local government was less in terms of delivery and accountability and on those goods and services where societal norms and values concerning hierarchy and status matter less. It explains why the Indian state has been able to provide “hard” goods rather easily. For instance, India has seen a multi-fold increase in food production but is still not able to improve malnutrition outcomes, which are affected by intra-household decisions. India’s state is even less effective in improving worrisome sex ratios, low (and declining) female labour force participation, or generalised societal violence against women — all of which are rooted to varying degrees in social norms (Kapur, 2020). In these cases, state failures reflect societal failures, and it does so because the state is a natural outgrowth of human social life.
In this decade, India’s state has successfully opened bank accounts for over 350 million people covering almost 78 per cent of the eligible population, delivered gas connections to more than 80 million households, built around 100 million toilets reaching 600 million people. However, access to the toilet does not mean that there is no open defecation. Around 11.1 per cent of our population still defecates in the open. Having access to gas connections does not mean that people have stopped cooking on fuelwood. The opinion in remote areas that fuelwood is better than cooking gas constrains the change along with the cost of refilling the cylinder. Bringing about a societal change is a long process. However, it can be achieved by a mix of advocacy, education, policy and legal mechanisms, economic empowerment, cultural and social shifts, technology, and inclusive participation by all stakeholders. Not to forget it also comes with intangible benefits and is hard to monitor and measure. The data points throughout the essay are not to paint a bleak picture but to show that some improvement has been achieved and there’s scope to achieve a lot more. There is no denying that the Indian state is building capacity for transforming the inputs into output; and transforming these outputs into outcomes is yet another potential step.
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The author, Khushi Kukreja, is a student at Ramjas College, Delhi University.
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