ABSTRACT
There are new initiatives undertaken since Prime Minister Modi’s government assumed responsibilities in 2014. The Pradhan Mantri Jan Dhan Yojana (PMJDY) is an innovative scheme to qualitatively expand financial inclusion and link with pension payments, subsidies, and other benefit payments in a secure and reliable manner. The Atal Pension Yojana (APY) combines elements of defined benefit and defined contribution from the government for pensions primarily for informal sector workers. The MUDRA (Micro Units Development Refinance Agency) is intended to facilitate provision of credit to small enterprises in India, to help realise the potentials of self-employment, and to generate additional jobs in micro and small enterprises.
Under the umbrella of Skill India, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is also an innovative program for improving skill levels of the existing and future labour force. In addition, there are initiatives such as the Swachch Bharat Mission (SBM), meant to improve public and private hygiene and cleanliness. Substituting cleaner fuel for biomass through PMUY represents an Indian context-specific initiative to improve health and nutrition of women and children; and potentially facilitate earning of additional income by women. The Mission Indradhanush (MI) is a health initiative to immunise all pregnant women and children against vaccine-preventable diseases.
A clear linkage needs to be established between a specific initiative and the impact on socio-economic indicators given the peculiar characteristics of the country. The federal structure, with diffusion of responsibilities for design, implementation, and evaluation of the programs between the Union government and the States; diverse socio-economic characteristics; the informal nature of the labour force; and the nature of poverty pose considerable challenges for policy coherence, and organisational coordination. To overcome these challenges, the chapter emphasises the need for good quality ‘plumbing’ of these social protection schemes for better expenditure management and targeting, hence for better outcomes from a given level of expenditure.
This chapter suggests that India will need to generate between 2 to 4 percent of GDP of additional fiscal space by the year 2030 to fund pensions alone. If other social protection elements are included, the fiscal needs will be higher. The Indian government may generate fiscal space for its social protection initiatives through various means: procurement reforms to achieve savings; widening of the tax base by better tax design, and through the more strategic use of data analytics and other digital techniques; monetising government’s physical assets; and harnessing synergies of public infrastructure and social investment to generate higher growth. Many newer initiatives have co-contribution by the beneficiaries as an integral part of the scheme, making schemes more financially sustainable, and improving financial literacy and practices.
