How COVID-19 Could Change Social Protection in India

By Raka De, Anjani Balu

Ever since the World Health Organization declared the COVID-19 outbreak a pandemic on 11th March 2020, the ongoing discussions and debates have centred around scrutinizing the effectiveness and adequacy of government emergency responses.  In this blog post, we explore how last-mile delivery systems have adapted to the slew of relief measures introduced, and provide recommendations on how these adaptations and innovations can create a robust and sustainable welfare infrastructure. 

Key Recommendations

Developing new systems to meet the demands of the pandemic could prove challenging – adapting welfare delivery mechanisms to meet the needs of the crisis would allow for improvements in existing systems. 

  • Targeting should be made more inclusive; Tamil Nadu has relied on the ownership of ration cards for doling out benefits as opposed to having a specific type of bank account. The utilization of a job card (MNREGA) can also be considered for this purpose.
  • A unified mobile platform where beneficiaries can receive information and opt-in to all available measures may help improve ease of access to government entitlements by enabling self-service to mobile phone owners.
  • Governments can look to leverage community organizations for diffusing information to help with the delivery of relief measures and advocating for better services.

In India, the pandemic has brought to the forefront the chronic poverty and inequality that already plague the nation, where more than 21.9% of the population lives below the poverty line. The implementation of nationwide lockdown measures has caused factories to shut down and interrupted supply chains, rendering migrants and non-migrant employees jobless. With no source of income and information on the pandemic swarming in from every direction, these citizens have turned to their government for streamlined and authenticated information, guidance and relief. 
The pressure on governments to act is enormous. The Central Government initially responded with a Rs. 1.7 lakh crore relief package for citizens under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). Further social assistance measures were included in the Atmanirbhar Bharat package announced in mid-May. Simultaneously, state governments have introduced additional measures for migrant workers, construction workers, below poverty line (BPL) individuals and low-income households. They have also demanded an array of schemes for the citizens in addition to fiscal and financial aid from the Centre. However, the reach and effectiveness of such schemes rely heavily on the infrastructure of existing delivery systems

Photo credit: Seva Mandir

Challenges in Delivering Entitlements at Scale: Pre-COVID

Even before the pandemic, the effective and smooth distribution of social protection benefits has been hampered by barriers such as insufficient staffing, funding, and training of local-level government bodies and organizations (including SHGs and NGOs). These barriers further exacerbate issues such as information asymmetry and the insufficiency of performance-based incentives for local agents, which affect their motivation and performance as well. 

Common Service Centres (or CSCs) that are front-end channels for delivering services at the last-mile have their fair share of problems, associated with weak connectivity, poor infrastructure, minimal incentives and a lack of automated backend processes. 

While the JAM trinity and the increasing reliance on Direct Benefit Transfers have been a step towards automating the existing structure, leveraging technology for targeting comes at its own cost – beneficiaries are often excluded, preventing such systems from working efficiently:

A Massive Modification: Delivery Mechanisms in a Post-Pandemic World

Plenty of existing literature looks at how India’s welfare delivery infrastructure has held up to the demands of a pandemic. In this section, we examine what these adaptations and shortcomings mean for welfare delivery in a post-pandemic world. 

Targeting is a key issue to consider when designing inclusive social assistance programs in developing countries with large populations. In India, PDS beneficiaries are bracketed on the basis of a poverty line that may not reflect the accurate socio-economic status of a household. A recent study found that the usage of 2011 Census data to calculate state-wide PDS coverage has led to large-scale exclusions from the program. 

The use of Direct Benefit Transfers to transfer relief funds may also exclude citizens without active Jan Dhan accounts. Typically, strict targeting guidelines are employed to tackle inclusion errors, i.e. reducing instances where ineligible beneficiaries receive benefits, in order to minimize leakages and keep programs cost-effective. However, during a crisis of this magnitude governments should seek to optimize delivery mechanisms by: 

  • Shifting priorities and erring on the side of being inclusive, i.e. recognizing the scale of the economic losses that the population faces and focusing on plugging exclusion errors that deny benefits to eligible beneficiaries. 
  • In practice, by relaxing the criteria of having a specific type of bank account, targeting can be made more universal; Tamil Nadu has disbursed cash and ration-based commodities to ration card owners. The utilization of a job card (MNREGA) can also be considered to make targeting more inclusive. 
  • Utilizing last-mile agents to increase the efficiency and cost-effectiveness of social assistance programs can be considered as well. 

Last-Mile Agents

Banking agents have long been used to reach customers in rural areas, where there are fewer bank branches present, and citizens are less likely to be digitally and financially literate. According to the Business Correspondents Federation of India, 80-85% of BCs were active as of June 2020. These agents have played a vital role in ensuring last-mile access to Direct Benefit Transfers under the PMGKY. However, incomes from these transactions may be insufficient for BCs as their revenue depends on the number of transactions they facilitate. A study conducted by Dvara Research found that provision of weak incentives to private agents can lead to suboptimal outcomes. The provision of safeguards for agents varies across banks – the Bank of Baroda, for instance, has provided additional incentives to BCs who worked during the pandemic. To this end, the BCFI has appealed to the Ministry of Finance to provide incentives to the tune of Rs. 5000 per agent, along with health and life insurance for six months. 

  • By ensuring access to welfare finance, these agents are providing an essential service at the risk of being exposed to the virus. The BCFI’s appeal highlights the need to formalize systems that provide agents with adequate base pay and insurance so that their income is not vulnerable to shocks and demand fluctuations.

Community Involvement

Organizations at the community level – like NGOs, CSOs and Self Help Groups (SHGs) –  are also making efforts to reach beneficiaries, spread information and mobilize relief measures. In the wake of the COVID-19 crisis, SHGs have worked to circulate relevant health information using WhatsApp groups.  A study conducted by Gram Vaani found that when community volunteers intervened in escalating complaints about public schemes, there was an improved turnover in response from administrators.

  • Although social distancing may be the need of the hour, governments can look to community organizations to help with the delivery of relief measures by diffusing information and advocating for better services. 

The JAM pipeline and Direct Benefit Transfers

On paper, the government’s Jan Dhan-Aadhaar-Mobile (JAM) pipeline is an ideal conduit to facilitate contactless receipt of welfare funds. However, the Aadhaar Based Biometric Authentication (hereafter, ABBA) system can be a source of exclusion. To highlight this, Reetika Khera et. al compare ‘quantity transaction rates (QTR)’ of non-ABBA and ABBA states with the former recording a higher QTR than ABBA states owing to the use of non-biometric smart cards as a method of last-mile authentication. 

  • While monitoring attendance using Aadhaar authentication has already been discontinued for central government employees for fear of virus transmission, this should be employed as a long term solution for beneficiaries as well. Rather than relying entirely on ABBA transactions, recording transactions in offline mode where needed would prevent their exclusion. 
  • To mitigate the health risks of crowding in PDS centres, in-kind transfers can also be made through other means like door-step delivery through PDS trucks

Mobile/Online Platforms

Often, citizens are unaware of the relief measures available to them and how to access them. Digital platforms help alleviate this information asymmetry by aggregating relief measures and matching providers to beneficiaries.  

Mobile phones have played a key role during the COVID-19 crisis by enabling citizens to access services during lockdown when physical touchpoints were not easily accessible. Several innovative mobile applications have emerged to improve access to government rations, private relief efforts and information on COVID-19 schemes. 

Existing government service delivery systems like HESPL’s Haqdarshak and DEF’s Mera App rely on an ‘agent + technology’ model to overcome the barriers of financial and digital illiteracy. While agent involvement has been critical for enabling cash withdrawal, the COVID-19 experience has highlighted how this model may benefit from the development of simplified applications that enable self-service. 

  • The development of a unified mobile platform where beneficiaries can receive information and opt-in to all available measures may help improve ease of access.

To this end, the World Bank has introduced a $1 billion social security fund to help improve the efficiency of entitlement delivery by integrating 400+ social security schemes on a single digital platform. 

Grievance Redressal

In times of crisis, administrators need to take citizen feedback into account,  as vulnerabilities in the public service delivery infrastructure come forth when there is an additional strain on existing systems. 

Existing service delivery apps and agent-based mechanisms under the Government of India’s e-Governance initiatives include forms for beneficiaries to register feedback and complaints. The Ministry of Health and Family Welfare has also launched a Twitter account COVID India Seva (@COVIDIndiaSeva) that responds to citizen queries about the COVID-19 crisis daily. This sets a precedent for governments to develop a mechanism that brings transparency to how relief measures are being delivered during this time. 

  • A unified service delivery platform like the one mentioned above should also seek to provide information on the stipulated timeline for receiving a benefit and the procedure for filing complaints. This platform would also be in line with the principles expressed in the Right to Public Services/Right to Grievance Redressal legislation that is in force in several states. 

Way Forward

The COVID-19 health crisis has emerged as a test of India’s social protection mechanisms and in many ways, highlighted existing deficiencies in welfare delivery. However, the crisis has also caused the nation – and particularly, policymakers – to take heed of the plight of the poor and underserved. Debates around reducing the stringency of poverty tests,  expanding social assistance programs to cover a wider range of citizens and improving the ease of receiving benefits all point to the need of developing a more inclusive system of welfare support. To this end, the COVID-19 pandemic can act as an impetus to address the inadequacies of existing mechanisms and institutions and adapt them to not only suit the current situation, but also prove resilient in the future. 

About the Authors 

Raka De is a Research Associate working with the Financial Inclusion vertical in Bangalore. With an undergraduate degree from Ashoka University, she is looking to explore research in areas of last-mile delivery systems and gender. A creative person by nature, she is also passionate about using creative methods to understand ground realities and analyse data.

Anjani Balu is a Research Associate with the Financial Inclusion team. She has worked on projects in the thematic areas of agriculture, women’s empowerment and digital finance. She holds an Integrated Master’s Degree in Development Studies from the Indian Institute of Technology, Madras.