A new Indian welfare state IN THE MAKING



The United Progressive Alliance has been busy rewriting the rules of interaction between the Indian state and the Indian people in several important ways. It has enacted legislation that guaran- tees 100 days of employment on demand in rural areas and has made education a fundamental right. A law to provide food se- curity to the poor is also in the works.

The moral case for such sup- port is very strong. But these le- gal amendments will inevitably change economic incentives, in- crease fiscal stress and test the capacity of the Indian state to deliver on these three new promises-- leading to many un- intended consequences, both good and bad. Much has al- ready been written about these issues.

The policies seem to derive their philosophical direction from the work of Nobel econo- mist Amartya Sen, a friend and contemporary of Prime Minister Manmohan Singh. Sen pio- neered what has come to be known as the capabilities ap- proach to development. The un- derlying idea is that the essen- tial goal of development is not economic growth, but an expan- sion in the capabilities of indi- viduals to lead a good and pro- ductive life. The courts have already broadened the scope of Article 21 of the Indian Constitution --on the right to life--to include issues that affect the ability of an individual to lead a life of digni- ty, which means access to food, medical facilities, livelihood, residence, etc. The underlying assumption in many judicial de- cisions is that the right to life does not only mean the right to not be killed, but also the right to lead a life of dignity. This is a vision of positive liberty as op- posed to negative liberty (the absence of restrictions or vio- lence), a distinction framed by Isaiah Berlin.

Sen and his collaborator Jean Dreze have also drawn a distinc- tion between “growth-mediat- ed“ and “support-led“ develop- ment. The first is a process by which higher growth rates cre- ate higher incomes and employ- ment while the second is a pro- cess by which the state inter- venes through health, employ- ment and social security schemes. There are no prizes for guessing which path the current government is going down.

The capabilities approach is not without its critics, and Sen himself has pointed to several limitations. There is also little empirical proof to show that growth-led development is infe- rior to support-led develop- ment. Successive governments will now have to be careful in deciding which are the capabili- ties beyond employment, food and education that need to be given as a matter of right.

Medical care?

Housing?

Transport?

Clothing?

This could be the birth of a new statism.

Will support-led development spur growth?