Why is India not Doing Well in Social Sector?

It is a matter of concern that India’s pace of improving the social indicators is much slower than countries poorer than India, such as Bangladesh and Vietnam. In addition to overcoming the well-known constraints of poor governance and weak accountability, India needs to allocate more funds for social sector by improving its tax collection and correct the design flaws in certain flagship programmes, such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), rural sanitation, PDS, urban housing and ICDS. These three broad directions of reforms are discussed below:

Low Tax Base Impinges on Social Spending

The overall expenditure on social sector is constrained by the low tax collection, as the Tax:GDP ratio in India is just about 17 per cent, as opposed to 31 per cent in South Africa, 32 per cent in Russia and 34 per cent in Brazil. This is the main factor why investment in health, education and social protection in India does not reach the level of other middle-income countries. The total expenditure (counting both plan and non-plan) by the Centre and the State governments combined as a percentage of GDP on education and health has been only around 3 and 1.2 per cent respectively, as against the global norm of 6 and 3 per cent respectively. Poor revenues do not permit government to substantially enhance financial allocations for social sector. Let us hope that the new government’s priority on controlling black income and introducing GST results in more funds in future for the social sector.

Design Flaw in Key Flagship Programmes

In addition, some of the main social protection programmes are not doing well, as these require a basic change in their design by the central government.

MGNREGA – MGNREGA does not work well in many poorer states, such as Bihar, Odisha, Assam and UP and hence its impact on poverty reduction is marginal. For instance, the total expenditure on MGNREGA in Bihar in 2015-16 was Rs 1,025 crore, in Tamil Nadu it was more than four times at Rs 4,633 crore, whereas the number of rural poor in Bihar is more than six times the number in Tamil Nadu. This leads to a bizarre situation where in 2015-16 government spent Rs 9,045 under MGNREGA on each rural poor in Kerala—the least poor state in India—against a paltry Rs 320 in Bihar! Government of India (GoI) needs to earmark MGNREGA funds for states, on the basis of poverty, just as PMGSY allocations are in proportion to state-wise shortage of rural roads. ‘Free-for-all’ approach punishes poorer states as they are not able to compete with better-governed states in attracting funds from GoI.

Moreover despite the fact that MGNREGA mandates that 80 per cent of works must be related to local water conservation and drought proofing, the sustainability and productivity of assets created is never monitored with the result that the programme is reduced to creating short-term unproductive employment with no focus on asset creation or soil and water conservation. Its impact on agriculture may even be negative, as alleged by the Ministry of Agriculture. MGNREGA is characterised by irregular flow of funds and high percentage of incomplete works. As works are left incomplete, bunds are washed away during the monsoon, which gradually accumulates as silt in the river-bed downhill, which in turn affects the nearby check dams with negative impact on agricultural productivity.

Rural toilets – There are several design issues that need attention. First, expecting MGNREGA to fund construction of toilets is not practical. It is almost impossible at the village level to converge and get funds from the two schemes quickly and this was the biggest dampener for the programme in the last four years. Before convergence, the implementation of MGNREGA and Nirmal Bharat Abhiyan (predecessor of Swachh Bharat Mission (SBM) were undertaken by different departments, which had their own systems of fund-flow and work-flow. Sanitation and MGNREGA guidelines are conceptually different from each other, as sanitation guidelines give money only as incentive, whereas MGNREGA gives money for construction. Moreover toilet construction is not a labour intensive activity, as total labour cost in toilet construction is less than 30 per cent.

Another challenge to convergence is the huge paperwork that de-motivates the implementing stakeholders. As one toilet is regarded as a single project under MGNREGA, huge paperwork was needed to record the processes.

Second, size of the pit is not being monitored; technically there should be two small pits of only 50 cubic feet capacity. Unfortunately, adoption of the twin pit model is very low in rural India and often only one pit is constructed. Moreover, the size of pit is almost ten times the recommended size to ensure that the pit never gets filled up in one’s lifetime. The demand for very large pits and septic tanks drives up the cost of constructing a latrine considerably. States should monitor the size of the pit and withdraw subsidy if it is more than 100 feet in size.

Public Distribution System (PDS) – All is not well with the PDS in India. Weaknesses in the distribution system include ration cards being mortgaged to ration shop owners, large errors of exclusion of BPL families, prevalence of ghost cards, with weaknesses in the delivery mechanism leading to large scale leakages and diversion of subsidised grains to markets and unintended beneficiaries. These problems arise because grain is given to the shopkeeper at the subsidised rate, which leads to leakages. Government should abolish the dual pricing system in PDS and sell stocks to the fair price shop dealer at the market price, say Rs 24 for wheat. The consumer would go to him with only two rupees in cash as before and her/his UID card to buy a kg of wheat but the rest Rs 22 would get transferred to the shopkeeper through the card. This will vastly reduce leakages and subsidy as well as improve the dealer’s attitude towards the buyer. As of now the dealer avoids the consumer as his main interest is in selling the grain in the open market. Once he is given grain at the market price he would be forced to welcome the card holder and persuade her/him to come to his shop at the earliest so that the transfer of subsidy could take place.

This would not only ensure that the right person gets their rations, but would also free entitlement holders to buy their rations from any FPS and not be tied to a single vendor. In other words, it would ensure ‘entitlement portability’ that will allow PDS entitlements to be accessed anywhere in the country and greatly help the poor migrant workers, who are unable to access their entitlements now. This would revolutionise the PDS by providing genuine choices to entitlement holders. It would also cut down significantly on corruption.

Urban housing – Ninety nine per cent of the urban housing shortage is from the economically weaker sections (EWS) and the low-income group (LIG) households. Though there is negligible housing shortage for the high income group (HIG) category, most new houses are meant for them, leading to a situation that the rich own more than one house that remain unoccupied, thus leading to wastage of a scarce resource. At today’s prices, even a modest tenement of 300 square feet would cost close to ten to thirty lakh rupees, well beyond the reach of poor residents. These are then allocated to ineligible households, or worse they stand vacant and gradually fall into disuse, as monuments of official waste, because in the classic mode of bureaucratic failures, those for whom they are intended cannot afford them and those who can afford them, do not want them.

Public rental was the social solution to housing during inter-war and post-war periods in Europe and elsewhere and very large housing estates were built in several countries. It is now increasingly targeted towards low-income earners and those with social problems. India too should shift the focus to promoting rental housing.

The focus on provision of rental/social housing stock for the urban poor and migrant population should be a critical element in making the cities more inclusive. It must include individual rental units, shared rental units as well as dormitory and night shelter options. The poorest such as beggars, rag-pickers and unskilled wage earners cannot afford even houses on a rental scheme. For them the scheme of night shelters should be revived as a centrally sponsored scheme. Such shelters should be built close to place of employment, as the poorest cannot afford even travelling by public transport.

ICDS design needs a change – The ICDS has not yet succeeded in making a significant dent in reducing child malnutrition, as the programme has placed priority on food supplementation rather than on nutrition and health education interventions and targets children mostly after the age of three when malnutrition has already set in. Very little of the ICDS resources, in terms of funds and staff time, are spent on the under-three child and this low-priority must be reversed.

The focus in ICDS programme should be on components that directly address the most important causes of under-nutrition in India, specifically improving mothers’ feeding and caring behaviour, improving household water and sanitation, strengthening referrals to the health system and providing micronutrients. The basic nature of the programme should be changed from centre-based to outreach-based, as the child under three cannot walk to the centre and has to be reached at his/her home. Another advantage of visiting homes is that the entire family, not just the mothers, are sensitised and counselled.

GoI should discourage the distribution of manufactured ‘ready-to-eat’ food, as it leads to grand corruption at the ministerial level, but unfortunately GoI has encouraged such tendering by laying down the minimum nutritional norms for ‘take-home rations’ (a permissible alternative to cooked meals for young children), including micronutrient fortification, thus providing a dangerous foothold for food manufacturers and contractors, who are constantly trying to invade child nutrition programmes for profit making purposes. ICDS should learn from the success of hot freshly cooked mid-day meals programme that runs fairly well even in states not known for efficiency, whereas the supply of packaged food in ICDS even in efficient states is not popular with the children, besides being irregular and discouraging local participation.

A recent evaluation of ICDS in UP by the National Human Rights Commission showed that despite Supreme Court orders to provide hot cooked meals, all centres supplied only packaged ready-to-eat food, containing only 100 calories, as against a norm of 500 calories and 63 per cent of food and funds were misappropriated. The food being unpalatable, most of it ends up as cattle feed. People have started calling it “Pashu Aahaar” rather than “Paushtik Aahaar”.

Governance Issues

Some do-able reforms are suggested below:

Re-structure bureaucracy – There are too many government servants in the support positions, such as clerks, orderlies and drivers, who are now not needed in this era of advanced technology and too few people in the line positions, such as teachers, nurses and policemen, who are meant to deliver public services. Key public services – education, healthcare, police and judiciary are starved of regular employees, whereas many wings are overstaffed with Group C & D support staff that has become mostly irrelevant in view of computerisation and changing techniques of information management. Efforts should therefore be made to identify surplus support staff, set-up an effective re-deployment plan and devise a liberal system for exit. There should be incentives for clerks and class IV staff to become teachers and constables.

It is instructive to look at inter-state availability of regular government employees. Table 1 compares the number of state government employees (including state PSUs and local bodies) in Bihar with Tamil Nadu.

Thus as compared to the global average of more than 30, Bihar has only 2.4 employees per thousand population. No wonder all schemes are in disarray there!

Focus on accountability – As a consequence of its colonial heritage, as well as of the hierarchical social system, administrative accountability in India has always been internal and upwards and the civil service’s accountability to the people has been very limited. With politicisation and declining discipline, even internal accountability stands seriously eroded today, while accountability via legislative review (as state legislatures hardly meet) has not been sufficiently effective. But strengthening internal administrative accountability is rarely adequate by itself, especially when the social ethos tolerates collusion between supervisors and subordinates.

‘Outward accountability’ to the public, therefore, is essential for greater responsiveness and improved service quality. To achieve this, outcomes such as quality of learning in schools, actual use of toilets and degree of satisfaction with government services must be measured regularly. States must set up effective mechanism for evaluation of flagship programmes and link promotions etc, with performance.

At present, officials at all levels spend a great deal of time in collecting and submitting information that is not used for taking corrective and remedial action or for analysis. It is forwarded to a higher level or used in answers to Parliament/ Assembly Questions, but not much more. Although some Ministries do concurrent evaluation and engage professional organisations to prepare impact studies, such reports are hardly read by policymakers and corrective follow-ups are rare. Ultimately, the process of hiring a professional for an impact study degenerates into another patronage activity, where favourites are chosen and the quality of the report is a secondary consideration.

Check inflated and incredible reporting – Equally, state governments do not discourage reporting of inflated figures from the districts, which again renders monitoring ineffective. As data are often not verified or collected through independent sources, no action is taken against officers indulging in bogus reporting. The practice is so widespread in all the states, presumably with the connivance of senior officers, that the overall percentage of severely malnourished children, in case of 0-3 years according to the data reaching GoI from the states is only two per cent, as against 9.4 per cent reported by UNICEF in a recent survey. The field officials are thus able to escape from any sense of accountability for reducing malnutrition. Figures from some states show their children to be as healthy as in Denmark and Sweden!

One District Collector, when confronted with this kind of bogus figures, told me that reporting correct data is “a high-risk and low-reward activity”! Dr Manmohan Singh as Prime Minister called government’s performance in combating malnutrition a ‘national shame’, but he was not able to persuade the states to accept that the problem exists! Forget about the solutions.

Control absenteeism – A World Bank study showed that the bulk of expenditures in education and health typically flow to the salaries of teachers and health workers, yet rampant absenteeism and shirking by these service providers means that no services are effectively provided in many cases. That is, governments use these resources to provide (targetable) jobs rather than (less targetable) high quality services. System exists for the service providers but not for service provision. Field investigations in rural areas of Indian states, particularly in the north, reveal that teacher absenteeism is endemic, with almost two-thirds of the teachers employed in the sample schools absent or not teaching at the time of the investigators’ unannounced visits. A study found that the average rate of teacher attendance was 65 per cent in UP but the average rate of teacher activity (i.e., active engagement in teaching-related activities) was only 27 per cent in UP. Similarly rural health care in most states is marked by absenteeism of doctors/health providers, inadequate supervision/monitoring and callous attitudes. A study by the Planning Commission described the physical availability of doctors at the Community Health Centres (CHCs) at the sub-district or block level was less than 30 per cent in Bihar and Rajasthan.

All ministries/departments should collect quantitative data on absenteeism of both service providers and service receivers (students in classrooms, or women turning up for institutional deliveries) as it throws a great deal of light on the quality of service. Through a carefully designed methodology backed by technology, it is quite possible to measure the performance of all service providing agencies, such as police stations, health and anganwadi centres, Panchayats, etc and to what extent they are responsive, efficient and participative. Technology should be used to monitor not only attendance but performance of field staff.

Teacher absenteeism and lack of accountability has to be addressed by not only by greater community involvement in management and ownership of schools, but also through better oversight mechanisms and measurement of achievements of each student, on the basis of which teachers’ performance should be assessed.

Improve flow of funds – Many state governments, especially the poor ones, are neither able to draw their entitled funds from GoI, nor are able to release these to the districts/villages in time, with the result that GoI is often constrained to divert the unclaimed funds to better performing states. The reason for poor performance by Bihar, Orissa (Odisha), UP and Assam is often due to the widespread shortage of staff at all levels that adversely affects implementation and supervision of programmes. An evaluation of ICDS in Bihar in 2007 by UNICEF showed that only less than 10 per cent of AWWs received honorarium regularly, most receive it only twice in a year rather than every month. Another study by UNICEF showed that only 18 per cent of officials in Jharkhand working at the grassroots level are paid their salaries in time.

Empirical studies are needed to suggest what changes are needed in financial procedures at the state level so that utilisation of funds improves, timely payments are made to the staff and utilisation reports are sent to GoI in time without delay. GoI’s own studies show that even electronic transfer takes months with the result that in Mid Day Meals programme ground staff such as cooks and helpers are not paid for months, FCI withholds supply of grain and mid-day meals are served only for 60-70 per cent working days in some states. Similar delays take place in supply of text-books in SSA, filling up of vacancies, especially in the remote and tribal areas, capital works, funds for maintenance, etc.

Empower women through land ownership and employment – Of all the disadvantaged people in rural India, interests of women have been least articulated, even by civil society. Ownership of land is concentrated mostly in male hands in our patriarchal society. Not more than 2 per cent land is exclusively in women’s names. Although Hindu Succession Act has been amended in 2005 giving equal rights to women in inheritance, yet none of the state governments have taken the new law seriously. Neither the Department of Land Resources in GoI nor the Ministry of Women & Child Development (MWCD) has issued a single circular asking states to implement the law. The result is that anti-women laws and practices merrily continue in the states. For instance, Section 46(1) of the Rajasthan Tenancy Act places women at par with lunatics and idiots.

The Department of Land Resources in the Ministry of Rural Development should launch a campaign to correct revenue records and ensure that women’s land ownership rights are properly recorded by the states with intimation to women. Monitorable targets should be set for the district collectors to ensure timely implementation of law. Further, civil society should prepare and circulate pamphlets to Members of Parliament that enable them raising concerns about women’s rights to land and property in Parliament.

According to National Sample Survey, Work Participation Rate for rural women in the age group 15-59 years has fallen from 34 per cent in 1983 to only 26 percent in 2011-12. Rural women are being displaced by growing mechanisation. Farmers are switching to mechanical rice transplanters and combine harvesters are spreading even in Bihar. Then, minor forest products that women used to collect are disappearing, as the preferred forest policy is becoming now more timber oriented. And lastly, non-farm jobs such as in construction, retail trade and hospitality sector are largely male oriented. These are generated some distance away from the village where men can go on a bike, but most rural women do not know how to ride a cycle. Prosperity in India has thus made women more disempowered and dependent on men. Special efforts are therefore needed to push women’s productive employment.

Stability of tenure – Appointments and transfers bring in huge bribes to corrupt officials and politicians. As tenures shorten both efficiency and accountability suffer. In UP, the average tenure of an IAS officer in the last ten years is said to be as low as four months. In the IPS it is even lower, leading to a wisecrack that ’agar hafte, hafte ki posting hogi to hafta banaya karenge’.

Several reforms are needed here. Powers of transfers of all class II officers should be with Head of the Department and not with the government. At least for higher ranks of the civil services, e.g., Chief Secretary and DGP, postings may be made contractual for a fixed period of at least two years (as is being done in GoI for Secretaries in the Ministries of Home, Defence and Finance). Stability index should be calculated for important posts, such as Secretaries, Deputy Commissioners and District Supdt of Police. An average of at least two years for each group be fixed, so that although government would be free to transfer an officer before two years without calling for his explanation, the average must be maintained above two years. This would mean that for every short-tenure someone else must have a sufficiently long tenure to maintain the average.

In the ultimate analysis, the constraints to human development are rooted in inappropriate government structure, badly designed programmes, lack of appropriate monitoring and evaluation and poor governance. Action is needed on all these fronts.

However, the above described policy reforms would require strong political support. In some rogue states political pressures for distribution of patronage are so intense that there is no time or inclination for the ministers and bureaucrats to do conceptual thinking, design good programmes, weed out those that are not functioning well and monitor the programmes with a view to improve the effectiveness of delivery. One can only hope that these states would learn from the positive example of other states where the Chief Ministers have overcome the anti-incumbency factor by improving governance and thereby achieving inclusive growth.