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% of 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 should 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.