Technology comes to policymakers' help

ECONOMISTS and national budget makers have a new situation to reckon with - burgeoning welfare budgets. Over the past decade, many countries have had to step up steeply the allocation for support to the underclass. This has taken the form of cash benefits, healthcare subsidies, rebates on monthly expenses or subsidised supply of monthly needs, special support for education, tax reliefs, mass housing, etc. The number of heads has also multiplied, as country finance ministers cope with slow or no growth in income of the bottom percentiles of the population. That the issue has raised its head even in the face of benign inflationary conditions is part of the conundrum.

With huge outlays on such expenditures, the question remains as to what is the efficacy of these measures. At one level, there is the question of whether this becomes a permanent crutch. Equally pertinent concerns are whether the outlays reach the targeted people and whether there is inadvertent subsidy for the better off.

In recent times, India has taken on this issue squarely. The claimant groups are many - farmers, urban poor, educated unemployed, low wage workers, malnourished children, illiterates, people living in far flung under-developed geographies, government employees at the lowest cadre and some more. The size of these groups, the lack of a unified database covering all citizens and a government system that adopts a multilayered devolution system lead to important questions on how to maximise the efficacy of the schemes.