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IJSSP
34,3/4
Welfare schemes in India:
decentralization dynamics
and stakeholder influences
154 Anjula Gurtoo
Indian Institute of Science, Bangalore, India, and
Udayaadithya A.
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Abstract
Purpose – The purpose of this paper is to provide a background to the special issue on welfare
schemes in India. After 25 years of decentralization of governance and structural adjustments
implemented in the 1980s and 1990s, have welfare schemes implementation and execution become
more accountable and efficient? This paper seeks a critical look at the welfare schemes and its
relationship with decentralization and stakeholders’ dynamics.
Design/methodology/approach – The paper is based on a review of studies post 1990s.
Papers representing all main stakeholders are reviewed, namely, politicians and political parties,
bureaucrats, beneficiary, and civil society organizations. The inclusion/exclusion decision for the
papers was taken on two criteria: the paper/document had to explicitly investigate decentralization,
and had to include welfare scheme as the overall theme under which decentralization was
investigated.
Findings – The paper summarizes the new complexities in the system. Stakeholder behaviour is
driven by several factors external to the traditional social and economic diversities that signify the
Indian sub continent. For example, the authors see the lobbying process shifting to the local level,
increasing importance of the local politician and the significance of forming local coalitions and
partnerships for better resource allocation.
Originality/value – The paper attempts to provide an overview by going beyond a critique of
development to focus on the perils of operating within a socio-economically complex society.
Keywords India, Stakeholders, Decentralization, Welfare schemes
Paper type Conceptual paper
1. Introduction
Over the last five decades India has made systematic efforts at removing poverty and
increasing the well-being of its citizens through targeted welfare programs (Appendix).
Table I gives the budget allocations and expenditure of the welfare schemes run by the
central government, as an indicative of the nature of expenditure on welfare schemes in
India. Subbarao’s (1997) estimation of the marginal odds of participation in India using
three poverty alleviation program interventions (the public food distribution system,
the public works programme and the rural development) found them to be most effective
for those living at the poverty line (roughly the 40th percentile). This lends support for the
contention that welfare programs often gainfully redistribute employment within
underprivileged groups.
International Journal of Sociology However, with poverty levels still at 32.7 percent (World Bank, 2012), research has paid
and Social Policy
Vol. 34 No. 3/4, 2014
increased attention to issues of access and accountability in the welfare schemes. Inefficient
pp. 154-165 practices and systems undermine access to public schemes, and lead to wasted resources
r Emerald Group Publishing Limited
0144-333X
(DeSouza, 2000; Crook and Manor, 1995; Fisman and Gatti, 2002). In the modern era of
DOI 10.1108/IJSSP-02-2014-0017 changed demographic trends, international advocacy for transparency and accountability,
and high economic growth scenarios, can we expect better and more efficient welfare Welfare schemes
systems as well? in India
This question becomes more significant with the passing of the 73rd and 74th
amendment to the constitution in April 1993. These Amendments made it mandatory
for each state to constitute local self-government institutions (called Panchayat
Raj Institutions, in rural areas) at the village, intermediate and district levels.
They represent a significant change from a two-tier centralized system of governance, 155
to a decentralized, local empowerment oriented governance system, where locally elected
representatives take most decisions for their areas. The local elected representatives
further select a chairperson who becomes a member of all government Davits and
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Advises. This significantly reduces the power of the bureaucracy and the state politicians.
The role of the bureaucracy, consequently, becomes more of assistance to the elected
representatives, than the primary decision makers. The state politicians share resources
with the local elected representative, reducing their powers to take financial and planning
decisions on development, including running of the welfare schemes.
Twenty-five years into this change, has welfare scheme implementation and execution
become less socially and culturally embedded, and more transparent and efficient? While
decentralization has led to significant support to the socio-economically marginalized,
a high level of socio-economic influence on the system can undermine the efficiency and
effectiveness of welfare implementation and allocation (Blair, 2000; Meenakshisundaram,
1999; Subbarao, 1997). For example, on one side decentralization of welfare schemes
provides people with a platform to voice their needs and design their own support
systems (Marsden and Oakley, 1990; Meenakshisundaram, 1999; Moris, 1991), on the flip
side it shifts the politics to the local micro level making the dynamics murkier
(Udayaadithya and Gurtoo, 2010; Crook and Sverrisson, 2001; Moe, 1990). Moreover,
recent studies on social and economic outcomes establish a weak correlation between
democratic decentralization and poverty reduction (Crook and Sverrisson, 2001; Gopal,
2005; Heller et al., 2007; World Bank, 2012).
This paper seeks a critical look at the decentralization dynamics and its relationship
with various stakeholders, with reference to welfare schemes in India. We review the
stakeholder responses to decentralization specifically with two goals in mind. First,
we believe the informal social and political system dynamics are different when
interacting with decentralization, and hence require perspective consolidation.
Thus, we seek to present a comprehensive review of this interaction. Our second
goal is to relate the results to maximise understanding of the current diversity
dynamics in India. We aim to provide an overview by going beyond a critique of
development to focus on the perils of operating within a multi socio-political society.
not been so much on the ability of the institutions (the “decentralized system”)
to impact the decision making of the vulnerable (Savale, 2006; Crook and Manor, 1998).
The most common argument being, that decentralization, by definition leads people to
become more knowledgeable and thereby system gets more responsive (Crook and
Manor, 1998). However, direct participation though public meetings or similar channels
does not ensure empowerment and need not necessarily facilitates further “democratic”
processes to be followed (Rigg, 1991; Evans, 1996). Hence, further investigation into the
socio-economic dynamics of decentralization per se is required.
We found around four authors who have investigated this in India in detail.
The most comprehensive studies have been by Crook and Manor (1995, 1998, 2004).
The authors have investigated decentralization in developing countries of Asia and
Africa to highlight a gamut of transparency and accountability issues including
bureaucratic and political complexities. Their focus has also been on institutional
performance. Studies by J. Echeverri-Gent (1988, 1992, 1993) look at poverty alleviation
through decentralization. These studies investigate issues like political influence,
public participation and empowerment. Drèze and Sen’s (1996, 1997, 1999, 2002)
studies take a macro developmental perspective. Issues like employment, economic
development and inequality has been their focus. H.W. Blair (1981, 1996, 2000) looks at
the political economy of participation in developing countries of Asia.
Drawing from these studies the paper proceeds as follows: the next section outlines
the methodology. This is followed by a summary of the debates and challenges found
with (and for) the various stakeholders. The last section discusses these debates and
challenges and concludes the paper.
2. The methodology
Outlining of an optimal strategy was imperative for developing this conceptual paper.
Several studies investigate stakeholder dynamics from various perspectives. Earlier
sociological studies focus on beneficiary demographics and social divisions (Srinivas,
1976, 1980; Sangave, 1980). Economists investigate welfare scheme performance and
poverty impacts (Herring and Edwards, 1983; Ravallion, 1995; Gaiha, 1993). Political
science and economics also looks at political influence (Esping-Andersen, 1989; Rose,
1984). A shift towards complex conceptualizations and capture is seen in the studies
after 1990s. Post 1990s studies after 1990s capture dynamics like elite capture,
bureaucracy-political tensions and negotiated dynamics between social classes, and
are the focus for this paper. Papers representing all main stakeholders are reviewed,
namely, politicians, bureaucrats, beneficiary and civil society organizations.
Political party dynamics are captured as well. Political parties operate at the macro
level while decentralization has put politics at the micro level, making the individual
politician more significant in the scheme of things. We wanted to look at this interplay.
The inclusion/exclusion decision for the papers was taken on two criteria: the Welfare schemes
paper/document had to explicitly investigate decentralization, and had to include in India
welfare scheme as the overall theme under which decentralization was investigated.
at the executive level (Migdal, 1988; Udayaadithya and Gurtoo, 2011). The social
capital literature argues for development of social capital (trust and group
cohesiveness) of a region for ensuring efficiency of the bureaucratic system and
reduction in political-bureaucracy alignment. The argument is that higher social
capital reduces cost of monitoring and shrinks principal-agent relationship thereby
leading to better government performance (Moe, 1989, 1990). Dasgupta et al. (2007)
highlights that good leadership (social capital), along with procedural restrictions
(scheme rules), can significantly influence government efficiency.
The higher authorities in bureaucracy also play a major role in successfully
countering elite capture. They act as counter-elite to local elite, thereby encouraging
civic participation (Echeverri-Gent, 1992; Bardhan and Mookherjee, 2005).
Furthermore, state’s willingness to devolve powers and resources coupled with
a well-developed civil society are identified as enabling conditions for effective
participatory governance (Heller et al., 2007; Sabatier, 1988). Where the state is able to
establish and maintain a reasonable amount of autonomy from powerful social actors
and forces, the effectiveness of welfare schemes increased (Ghatak and Ghatak, 2002;
Migdal, 1988). More poor and the vulnerable participate, positively influenced by this
autonomy (Crook and Manor, 1998; Blair, 2000; Heller et al., 2007). Sabatier (1988)
has expressed the importance of strong advocacies and civil society support for the
targeted groups. The author highlights social capital of the community and strong
social networks as determinants of formation of advocacies and pressure groups,
which, in turn, can result in participation in decision making.
the success of local governance is highly dependent on engagement and the capacity
of local actors to hold individual politicians accountable (Heller et al., 2007).
Within the local political scenario, asymmetry of bargaining powers among the
legislators can lead to misallocation of resources (Persson and Tabellini, 2000).
The agenda-setter’s district usually gets more allocation than the social optimum
(Crook and Manor, 1998).
4. Discussion
Diversified interests and preferences of stakeholders decide their individual course of
actions. Within decentralization, we observe stakeholder behavior being driven by
several factors external to the traditional social and economic diversities that signifies
the Indian sub continent. Studies on the dynamics of decentralization, therefore, look at
loss and gain from a particular set of institutional opportunities, in relation to the
purpose of the decentralized scheme. For instance, studies show active lobbying at
the local level. Similarly, decentralization drives resource allocation to be driven by the
IJSSP local elite and powerful. Several studies establish how the poor and the disadvantaged
34,3/4 get limited benefits of participation due to powerful local elite or traditional
socio-economic situation of the agrarian societies (Echeverri-Gent, 1992; Heller et al.,
2007; Tendler and Freedheim, 1994).
So, can the negative impacts of elite capture be nullified? The degree of elite control
was observed to be significantly dependent on the existence of mass participation
160 at the local level (Meenakshisundaram, 1999; Udayaadithya and Gurtoo, 2013).
Rising education, intensified political competition, availability of other job
opportunities, technological support in agriculture, and group mobilization are other
factors that were observed to impact elite capture (Dasgupta et al., 2007; Robinson,
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1988; Karuna and Sowmya, 2007). In literature, as we have seen earlier, the government
is seen to play a significant role as counter-elite to these local elites, encouraging civic
participation (Echeverri-Gent, 1992; Bardhan and Mookherjee, 2005). However, the
power struggle between the two still remains (Shahrawat and Rao, 2012).
Separating the socio-economic variables demonstrates the importance of administrative
variables. While overall socio-economic dynamics are still significant, administrative and
institutional variables became more important in several contexts. For instance,
political environment influences scheme performance. Where the large groups are
politically organized, political affiliations of the region become the significant entrants in
the decentralization dynamics. This is seen through literature on political forces,
and bureaucratic forces as well. Local groups’ affiliations (alliances with bureaucrats and
politicians) led to better resource allocation (Karuna and Sowmya, 2007).
Looking for an explanation to draw a reliable scenario of decentralization dynamics
we found research that provides explanations where administrative premises were
seen to contradict normative explanations (see Lloyd et al., 1980; Holden, 1966;
Kaufman, 1969; Moe, 1989, 1990). Searching for explanations led to an understanding
of the politics of institutional choice, that is, decision making through one set of rules
that is part of a system also depends on which other rules are in effect. This configural
nature of decision making drives larger group choices. Called “institutional” rules,
they refer to shared concepts organized by norms, and strategies (Ostrom, 1999).
Analyzing decisions under institutional rules, the concept of rules-in-use is stressed
rather than rules-in-form. Depending on the active status of shared beliefs and
understandings, the rules-in-use are identified and decisions taken accordingly.
These institutional choice rules can be observed from the review of decentralization
dynamics. When a decentralized welfare scheme is launched, the beneficiaries
(actors in the system) make assumptions or evaluations of the resources and the
situations. These assumptions then act on the selection of a particular course of action
(Ostrom, 1999). For instance significance of the local variables leads them to form
collectives for better bargaining and start lobbying on one hand and form bureaucratic
and political affiliations on the other hand. These decisions together lead to normative
and economic equilibrium. Another example can be seen in the behaviour of the
bureaucrats. As they are no longer the main decision makers, resource allocation
dynamics and political alignments take precedence in order to preserve their power.
5. Conclusion
Social and economic disparities were extremely high till the 1980s. Caste hierarchies,
authority of the elders and landed class defined the structures of control and their
decisions had passive acceptance. However, 25 years back, the government and
para-statal institutions started taking several significant steps to meet the disparity in
favour of backward regions, socially vulnerable communities and the poor. Institutions Welfare schemes
of local self governance like Panchayati Raj, and employment schemes like Jawahar in India
Rozgar Yojna were concentrated initiatives in this direction. Coupled with high degree
of economic liberalization and privatization, public awareness due to the information
technology and telecommunication revolution, and promotion of community based
projects by the government in the past decade, the traditional societies have moved
towards a social change, i.e. empowerment. Decentralization was meant to promote 161
equality and give voice to all classes of people, by challenging the traditional social
structure of control that emphasizes submission to social divisions. However, it has
created its own socio-political dynamics.
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Our review illustrates that empowerment has its own dynamics. While being
dependent of the social structures, they are independent of them as well. The actor
(an individual or a collective) is seen to make assumptions about resources, situation,
value assigned to the resources and the situation, use of knowledge and information.
These assumptions lead to the rules used to define relationships, understand attributes of
the world, and attributes of the community within which the decision occurs. And these
rules in turn act on the selection of a particular course of action through the social space
where individuals interact. Participants are motivated to select particular strategies or
chains of actions that jointly lead to stable equilibriums. The review reflects the new
dynamics which follow democratic initiatives. Particular configuration of globalization and
empowerment initiatives seems to have produced new kinds of decentralization scenarios.
It is our hope that the special issue will further this dialogue of these dynamics in
implementation of welfare schemes in India. The studies in this special issue look at
various schemes, in their performance, impact and efficiency, providing a way forward
in social policy points to approaches more embedded with the strategic changes in the
Indian society. The contributors of the special issue pose some challenges questions for
a relook at the old order of thinking which governs welfare scheme implementation,
and provide directions for future research.
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Appendix
Child and Infants: Anganwadi Integrated Child Integrated Child Mid Day Meals
women Scheme; National Development Protection Scheme Scheme
Creche Fund Scheme
Gild child: Balika Women: Child Birth: Reproductive Juvenile Justice
Samriddhi Yojna; Development of and Scheme
Non-Formal Education Women and Child Health Program;
Centers; Kishori Shakti Children in Rural National Maternity
Yojana Areas Benefits
Family Counselling Janani Suraksha Awareness Generation Rashtriya
Centre Yojana Projects for Rural and Mahila Kosh
Poor Women
Condensed Course of Swayamsidha Vocational Rehabilitation Science and
Education for Adult Scheme; of Women with Technology for
Women Disabilities Women
Training and Rashtriya Mahila National Maternity NORAD Scheme
Employment for Women Kosh Benefits Scheme
Distance Education for Education Work Development of Swa Shakti
Women Development for Prevention of Women and Children Project
and Empowerment Atrocities on in Rural Areas
Table AI. Women
Some significant welfare
programs running in India (continued)
Beneficiary Schemes Schemes Schemes Schemes Welfare schemes
in India
Labourer and Employment Labour Welfare Food for Work Self Help Groups
unemployed Assurance Scheme Fund Program
poor
Employment Schemes: Jawahar Rozgar Yojana; Schemes for Training of
Swarnjayanti Gram Swarozgar Yojana; Rehabilitation of Bonded Rural Youth
Sampoorna Grameen Rozgar Yojana; Rural Labourers for Self-
165
Employment Gaurantee Scheme; Rural Employment
Employment Generation Program (REGP)
Rural areas Infrastructure Rural Water Supply Non-Lapsable Central Food for Work
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Corresponding author
Dr Anjula Gurtoo can be contacted at: anjula@mgmt.iisc.ernet.in
1. Paul Chaney. 2017. ‘Governance transitions’ and minority nationalist parties’ pressure for welfare state
change: Evidence from Welsh and Scottish elections – And the UK’s ‘Brexit’ referendum. Global Social
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