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Summary

Governance Class 08

## Welfare Schemes: (1:04 PM)

- To overcome the problem of the vicious cycle of poverty it is suggested that there should be a limit on the life span of **welfare schemes.**
- For example, they can be implemented for a **period of 25 years.**
- If a child is taking birth today, he/she must be in a position to get gainful employment within 25 years.
- The amount of subsidies should be reduced progressively during this period.
- Amount saved by the government should be spent on capital expenditures.
- As suggested by the **2nd ARC, NITI Aayoga, pay commissions**, and other commissions, the number of centrally sponsored schemes should be reduced to less than 10.
- At present more than 580 schemes are implemented by both central and state governments.
- For example, in the agricultural sector itself, many schemes are implemented including fertilizer subsidies, subsidized credit facilities, irrigation subsidies, insurance schemes, storage and marketing subsidies, **DBT (PM Kisan),** power and water subsidies, MSP, and food subsidies.
- Identifying beneficiaries, according to a recent report of NITI Aayog around 14% of our population is living below the poverty line.
- However, under the **Food Security Act, almost 67% o**f our population is given subsidized food grains.
- Expenditure runs into lakhs of crores of rupees.
- If the exclusion principle is followed, most of the undeserving beneficiaries can be removed, from PDS.
- It helps the government in saving huge amounts of taxpayers’ money and it can be used for capital expenditure.
- **Subsidies in kind** can be replaced with subsidies in cash.
- For example, over a period of time, food subsidies can be replaced with cash transfers.
- India has built world-class digital public infrastructure in the last 10 years, and it can be used for **Direct Benefits Transfers.**
- It can help in saving huge amounts of administrative expenditure and also in eliminating corruption.

## FRBM legislation: (1:58 PM)

- **FRBM Act** can be amended by including the following:
- 1) It should be mandatory for the state governments to spend at **least 6%** of their GDP on education.
- 2) Similarly, another **6% should** be spent on health.
- 3) India is one of those countries wherein emphasis on **social capital and human resource development** has not been given any significance in the overall growth and development of the country.
- Changes should be made to the education system with a focus on skill training.
- Education institutions should be connected to industrial organizations so that the gap between demand and supply can be reduced in the labor market.
- **Citizen Charters** should be made mandatory for all developmental and welfare schemes.
- It helps in the participation of stakeholders, in governance, and also in improving service delivery mechanisms.
- **Social audits** should also be made mandatory for welfare schemes to transform the moral responsibilities of bureaucracy into legal accountability.
- **E-governance s**hould also be made mandatory from the lowest level to the topmost level of administration.
- It can help in overcoming the problems of **Red Tapism and corruption.**

## Direct Benefits Transfers: (2:15 PM)

- Immediately after independence, India had opted for a welfare state.
- **Directive Principles of State Policies** and the Preamble emphasise on socialistic ideas of our constitution.
- From the 1970s onwards, there was a radical shift in the economic policies of the government from the production of goods and services to the redistribution of income and wealth in favor of weaker sections of society.
- However, these welfare schemes proved to be not so successful due to very high administrative expenditure and systematic corruption.
- Improvement in digital public infrastructure has helped the governments to identify beneficiaries and also to link them to their bank accounts.
- Jan Dhan Aadhaar and Mobile is an administrative innovation to remove leakages in the implementation of welfare schemes and also to reduce corruption.
- **DBTs** can be done either in kind or in cash.
- For example, the PDS system at present uses the technology to remove fake beneficiaries, and also to reduce leakages.
- **DBTs** in cash can help the poorer sections during times of economic distress.
- It can help them to satisfy their basic needs and also to come out of poverty.
- It can also help in reviving consumer demand during times of economic recession.
- But at the same time, there are many **negative consequences of DBTs in cash:**
- **1) The money** may not be spent on the purpose for which it has been given.
- For example, money is transferred to be spent on the education of children but can be utilized for daily consumption purposes.
- **2) Transfer of money** into the accounts of people can lead to an overall increase in money supply within the economic system.
- If there is no corresponding increase in the supply of goods and services, it would automatically lead to demand inflation.
- **3) Financing these DBTs** is also a major problem because if the governments borrow to finance DBTs, it can result in a debt trap.
- It may not be sustained for a longer period of time.
- **4) Digital divide:**
- In spite of a drastic improvement in digital public infrastructure in the last decade, there is at least a significant portion of our population, who are yet to become part of the formal banking system.
- They are mostly from poor, backward, and vulnerable sections of society.
- If they are excluded, the entire welfare administration would become meaningless.
- **5) Digital literacy** in India is also very low.
- Which again is a major problem for DBTs.

## Solutions:

- 1) The focus should be on bringing the entire population into the **formal banking system.**
- 2) **Digital Security** is also a very important factor in expanding digital infrastructure.
- 3) Overall subsidies (in kind and in cash) should remain the same.
- 4) There should be a shift towards subsidies in cash to reduce administrative expenditure.
- **5) Technology** should be used to identify real beneficiaries so that overall subsidies can also be reduced.
- 6) Lastly, DBTs can only be a short-term welfare measure, and cannot substitute or replace **citizen empowerment** in the long term.

## Citizen's Charters: (3:32 PM)

- Representative democracy along with **colonial bureaucracy** meant that there was no scope for citizen participation in governance.
- India also has opted for a centralized top-down approach to development after independence.
- Bureaucracy was given an absolute monopoly over the development process.
- In a **parliamentary democracy,** bureaucracy is not directly accountable to the citizens.
- It has resulted in the failure of development administration.
- Outlays could not be transformed into outcomes.
- Development administration was characterized by inefficiency, wastage of resources, corruption, and failure to provide quality service delivery mechanisms.
- **Citizens Charters** had their origins in the **United Kingdom.**
- The welfare state in the UK was also a failure due to the monopoly of public service enterprises and the dominance of Weberian bureaucracy.
- **In the 1980s,** economic reforms were implemented wherein the country had opted for a neo-liberal state.
- Public sector enterprises were forced to compete with the private sector to provide services to citizens.
- The state considered itself as a service provider and treated citizens as customers or **consumers (neo-liberal state).**
- Bureaucracy was forced to improve its efficiency, and also to make itself accountable to citizens in service delivery mechanisms.
- In order to realize these objectives, the then prime minister, **John Major** introduced the Citizen's Charter.
- In 1997, Chief Ministers Conference was held in Delhi, to discuss the issue of corruption.
- The conference recommended the implementation of Citizen's Charters.

## Objectives of Citizen's Charter: (3:43 PM)

- To ensure the participation of citizens in formulating programs and also in deciding the quality of service delivery mechanisms.
- To transform the **moral responsibility** of bureaucracy in realizing the objectives of development administration into legal accountability.
- To improve the quality of the service delivery mechanism.
- To ensure effective grievance redressal mechanisms in case of **failure of bureaucracy** to provide services mentioned in the Citizen's Charters.
- To transform representative democracy into participatory governance.
- **What is a Citizen's Charter?**
- It is a voluntary commitment made by bureaucracy towards citizens regarding the services to be provided by them, within a stipulated time period.

## Importance of the Citizen's Charter: (3:57 PM)

- Citizen's Charters are formulated by bureaucracy in **consultation with stakeholders**.
- They provide information about the money to be spent on a particular purpose.
- Services to be provided are defined in quantifiable terms.
- Service standards are defined in terms of **global standards.**
- Citizen's Charters also define the time period during which the citizens are expected to receive the services.
- They also provide information about the beneficiaries.
- Citizen's Charters also contain **Grievance Redressal Mechanisms** in case of failure of bureaucracy to provide services.

## Topic for the next class: Citizen's Charter, continued.