Inclusion and exclusion errors in social security

| Updated on January 30, 2020 Published on January 30, 2020

Issues brought up in welfare payouts for farm widows are a throwback to the ‘universal basic income’ debate

Two recent BusinessLine reports have pointed to the difficulties arising out of targeting welfare schemes to the intended beneficiaries. In the case of farm suicide widows, one report (January 29) highlights the case of a 38-year-old widow from the Osmanabad district in Maharashtra, whose husband committed suicide about eight years ago but she is yet to receive the ex-gratia compensation; she has also not been receiving the annual payout of ₹6,000 under the PM Kisan Samman Nidhi Yojana despite the land having been transferred to her name. The second report (January 22) refers to the slow progress in verification of land titles, a pre-requisite for accurate targeting under PM-Kisan, which extends relief to farmers holding land up to two hectares. It is time to reflect on whether schemes should be re-tailored in order to reduce scope for mistargeting. The bureaucracy, as researchers have observed, tends to suspect that regular deaths are projected as suicide cases to avail of the ex-gratia amount. This sort of uncertainty gives rise to errors of both inclusion and exclusion, of which the latter is morally more troublesome. The use of the Jan Dhan-Aadhaar-Mobile (JAM) trinity, to use the expression of Economic Survey 2015-16, has helped the beneficiaries by eliminating the ‘cut’ of the middleman in many cases; but instances of MGNREGA payments not reaching the workers concerned have persisted where the population is not socio-economically empowered. There have been reports from central and eastern States of the Aadhaar becoming a hurdle to receiving entitlements. Perhaps realising the prospect of exclusion, the Economic Survey 2016-17 floated the idea of ‘universal basic income’ to supplement the JAM model, which is the genesis of the PM-Kisan scheme or its variants in States such as Telangana and Odisha.

The challenge today is to minimise both inclusion and exclusion errors by making self-selection and easy identification a feature of social security programmes. This calls for a redesign of these programmes. PM-Kisan should be expanded to include tenant farmers and landless workers, enhancing its inclusive character. It should be possible to introduce a broad UBI for easily identifiable beneficiaries, such as women above 60 years of age, widows, persons with disability and pregnant women, doing away with micro-targeting schemes such as those for farm suicide widows.

The Centre provides an old-age pension of ₹200 to a “destitute” or an individual with no source of income, a sum that has remained unchanged since 2006. States such as Tamil Nadu and Odisha supplement this demeaning sum. These groups are deserving of support in order for them to live with dignity, as they cannot earn for themselves. The MGNREGA is an option for the working poor. As for the fiscal challenges involved here, it should be possible to reallocate resources, as pointed out by the 2016-17 Survey, to meet essential obligations.

Published on January 30, 2020
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