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POLICY PERSPECTIVE 
Evolution Of Social Protection
Anurag Priyadarshee, Director - Rural Business & Planning, Department of Posts, Govt. of India    5/30/2011 11:17:40 PM

Social protection has become a buzzword among policymakers, particularly in low-income countries, engaged in designing measures to reduce poverty. Justification of social protection is often premised on the argument that it may not be possible to address the structural causes of poverty within the prevalent political and economic environment of many low-income countries. Most important structural causes of poverty are associated with unequal distribution of factors of production, mainly, land and capital Such unequal distribution results in poor facing a limited supply of the factors of production making it very difficult for them to participate in the process of economic growth. Poor are also unable to adequately access the health and educational infrastructure due to their assetlessness and thus most often fail to build up their capabilities. The situation is compounded due to continued social exclusion and discrimination. Although a section of advocates of social protection acknowledge the structural cause of poverty they also argue that absence of social protection measures and safety nets for the poor and vulnerable perpetuates poverty among them. As the policymakers find it infeasible to correct the distributional aspects of poverty in the given politico-economic environment, they are increasingly realizing that availability of social protection measures may help in reducing the severity of the poverty situation to a large extent.

This paper attempts to analyze evolution of social protection mechanisms in India through various historical phases in the political economy perspective. The following section captures the developments and debates in the field of social protection that constitute theoretical background to this work. While concluding, the paper argues that much of current emphasis on social protection in India reflects the realization that economic growth in itself does not contain mechanisms to make it inclusive.

Social Protection
 Social protection is an overarching term that includes ‘public actions taken in response to levels of vulnerability, risk, and deprivation which are deemed socially unacceptable within a given polity or society’ (Norton et al. 2001: 7). Social protection uses ‘social means to prevent deprivation, and vulnerability to deprivation’ (Dreze and Sen 1991: 5). Thus it has a ‘strong poverty focus’ (Barrientos and Lloyd-Sherlock 2002: 1). According to Avato et al. (2009: 456), social protection ‘includes interventions and initiatives that support individuals, households, and communities in their efforts to prevent, mitigate, and overcome risks and vulnerabilities, and that enhance the social status and rights of the marginalized’.

Three broad sets of programmes, viz. social assistance, social insurance, and labour market regulations constitute social protection. Social assistance programmes are designed to support poor households, while social insurance programmes aim to provide protection against contingencies such as unemployment, maternity, sickness or old age. Labour market regulations enforce minimum wages for work and basic standards for working conditions (Barientos and Hulme 2008). Social protection evolved in the late 1980s and early 1990s as a comprehensive set of programmes to respond to multidimensionality of poverty. Such a response also reflected an increasing recognition of the perceived inadequacy of social safety nets, which were criticised as ‘residualist and paternalistic’ (Sabates-Wheeler and Devereux 2008: 64).

According to Munro (2008), justification of social protection policies are justified on the basis of three different discourses. The risks and market failures discourse provides reasons of failures in insurance markets often due to informational issues, along with the failures in credit, human capital and labour markets to justify provision of social protection. The rights-based discourse advocates for social protection to fulfill the obligations to grant legally enforceable social and economic rights to its citizens on the part of the state. Needs-based discourse on the other hand invokes practical and moral arguments in favour of reducing and alleviating chronic poverty, and promotes employing social protection measures in achieving that. The constraints that the poor face may have different explanations resulting in different approaches towards social protection as means of addressing such constraints (Barrientos and Hulme 2008a). Thus the role and purpose of social protection may be to reduce social risk and market failures, satisfaction of basic needs, or contribute to human development through rights-based approach depending upon the strategies the policy makers adopt while addressing the aforementioned constraints. For example, market failure discourse was largely responsible for enhanced social and economic roles of the State and thus the growth of the modern welfare state.

Social Protection in Low-Income Countries
 Social protection as a major attribute of the welfare state has existed in the industrially developed countries in the form of social welfare assistance, insurance, and employment generation and protection. Fallouts of structural adjustment programmes, economic crises, and effects of globalisation have motivated the low- income countries too to incorporate social protection programmes within their policy frameworks since the early 1990s. Recurrent global economic crises and effects of increasing globalisation in trade and services have deteriorated the economic condition and bargaining power of the poor in low-income countries (e.g. Bardhan 2006; Basu 2006; Stiglitz 2002; Pritchett 1997). Structural adjustment programmes and influence of neo-liberal discourse have also limited the state’s role in providing health education services that adversely affected the informal sector workers and the poor (van Ginneken 1999). Social protection in such countries is therefore largely focussed on poverty reduction and relies increasingly on transfer of incomes in conjunction with employment generation, creation of assets and provision of basic services (Barrientos and Hulme 2008a).

Politics of Social Protection
Hickey (2008: 247) argues that the dominance of economics especially in the field of development studies has led to a more ‘technocratic focus’ on the social protection policies at the cost of political and political economic analysis of how such policies originated and were shaped. According to him, such an analysis is important as different forms of politics shape different dimensions of social protection programmes; the political factors responsible for initiating a programme may be very different from the politics needed to sustain them and that, in turn, may be different from the political issues associated with the identification of programme recipients. While analysing the social protection policies in Britain, France, and the US, Atkinson and Hills (1991: 105) also point out the ‘need for the analysis to range outside the purely economic’ factors and extend it to ‘understand the political influences on the design of policy’. Political support for a particular programme is very important for its sustenance. Political economy is thus crucial for the social protection (Atkinson and Hills 1991). It is also important, in relation to social protection, to distinguish a person’s entitlement and her being able to effectively enforce such entitlement. A person’s ability to effectively enforce her entitlements is influenced by a range of political economy considerations (Agarwal 1991).
 
The political and political economy aspect of social protection may be better understood in a framework of a social contract between the State and its citizens (Graham 2002) to consistently strive to improve the overall well-being and opportunities available to all the citizens (Barrientos and Hulme 2008). Expansion of tax-financed social protection after early 1980s in countries, such as Brazil can be interpreted as a consequence of a renewal of such a social contract (Barrientos and Lloyd-Sherlock 2003). Hickey (2008) argues that lack of such a binding contract may result in social protection policies being initiated due to factors such as political risk mitigation and become counterproductive. The concept of social contract is increasingly employed in social policy debates to justify State’s mandate to prevent injustice and promote equality (Jayasuriya 2002), while also justifying measures such as social protection (Ramia 2002). Thus, social contract not only offers an analytical tool to study the relationships of poverty with reduction of poverty, it also relocates social protection within the ambit of State policies to promote justice and equality (Ramia, 2002). Such understanding of social protection is important for it to be employed as a long-term measure to alleviate chronic poverty (Hickey and Bracking 2005) and promoted as a normative policy response to deprivation and vulnerability. A key challenge, in this regard is ‘to identify and support ‘politically progressive constituencies’, or drivers of change, that might begin to provide the forms of mobilization required to secure political contracts for social protection’ (Hickey 2008: 260).

Thus, to understand and contextualise the recent trends and developments within social protection, it is important to analyze them in microeconomic and political economy perspectives (Barrientos 2008). Against this background, this paper presents an analysis of the evolution of social protection programmes in India in the political economy perspective.

Social Protection in Ancient and Mediaeval India
There has been a considerable debate on whether social protection systems existed in the precapitalist societies in the ancient and mediaeval historical periods. Moral economy approach, propounded by Scott (1976) argues that social protection systems encompassing all their members were inherent in the structures of such societies. Such a thesis is however strongly refuted by Popkin (1979) who insists that social protection was almost totally absent in many precapitalist societies. Platteau (1991) suggests taking a middle path while acknowledging that several social protection mechanisms were available in precapitalist village societies. Such systems had their own limitations but were still the ‘second best optima given the many constraints confronting these societies’ (Platteau 1991: 161). These systems however weakened due to emergence of modern forms of market and State. Moreover, the new economic realities, particularly those caused by market forces, generated new vulnerabilities, which could not be addressed through traditional systems (Gilbert 1976).

In traditional Indian society, parental responsibility as a value of joint family system was of paramount importance in protecting all family members (Bhattacharya 1970). Many social mechanisms also developed to protect the people from adversities. An example of such mechanisms was Shreni (guild) system prevailing during fifth century B.C. until about second century B.C. it provided decent livelihood to all its participants (Thaplyal 2001). State was also actively involved in securing the lives and livelihoods of its citizens in the ancient India as can be made out by Arthashastra, Chanakya’s treatise on finance, politics and public administration in the fourth century B.C. He advises the king that ‘in the happiness of his subjects lies the king’s happiness; in their welfare, his welfare. He shall not consider as good only that which pleases him but treat as beneficial to him whatever pleases his subjects’ (cited in Kannan and Pillai 2007: 8).

Kannan and Pillai (2007: 8-9) also describe Chanakya’s ideas on public welfare that made the king as well as the people responsible for such welfare. It was the responsibility of the head of the family to provide for the whole family. Nobody was allowed to become ascetic before ensuring the continued well-being of the other family members. The king was required to maintain social order, promote economic activities, protect weaker sections of the society, prevent their harassment, protect the consumers, and take care of aged people, children and women. King was also advised to ensure welfare of even the slaves and prisoners. The State was required to bear the maintenance cost of the family of a government servant dying in harness. Chanakya also advised the king to remain prepared to protect his subjects from the natural calamities. Extensive famine relief measures, such as public distribution of food grains and seeds at concessional rates, initiating public works and providing food as wages, were also suggested in the Arthshastra. Many remnants of public works created as measures of famine and hunger relief are still found all over the country. Interestingly, Chanakya was against giving any doles, and the people receiving State help (such as widows, old prostitutes and convicts) were required to work in State-run cloth spinning units. In spite of such elaborate mechanisms described for public welfare, Chanakya does not mention provision of health and education as the duty of the State (Kannan and Pillai 2007).

Such ideas continued to guide the State throughout the ancient period after Chanakya as is borne out by Shukracharya’s treatise on justice, Shukraneeti, in the eighth century A.D. He further expanded the system to also include comprehensive welfare of the servants. It was suggested that the servants were entitled to old age and maintenance allowances. Servants were required to be paid three-fourths of their usual wages for a maximum period of six months in case of their falling sick and being unable to work. Premature death of servants entitled their families an allowance equivalent to half of their salaries (Bhattacharya 1970).
Not much account is however available of the State’s role towards general welfare of the people during mediaeval periods. Such role is found increasingly performed by the religious organisations, charities, trusts, caste associations and the village communities during Mughal rule and post-Mughal period (Kannan and Pillai 2007).

Social Protection in Colonial Period
 Colonial system witnessed a disruption in the traditional social fabric due to introduction of capitalistic mode of production and promotion of export of raw materials for the British industries. Such a change brought with it institutional developments such as modern legal and judicial systems, uniform administration, standardised land revenue systems, railways, and Posts and Telegraphs. These initiatives paved the path of uniting the Indians as a nation as pointed out by Karl Marx (1853), and raised their collective strength to demand more rights and greater welfare. Changes in agricultural production systems and production relations, along with some of the foreign policies of the British government in India, led to massive and recurrent famines (Bhatia 1985; Sen 1982). After initial reluctance, the government initiated famine relief measures that were successful in reducing mortality and frequency of famines and no major famine was encountered between 1902 and 1943 in the country. The last major famine that affected Bengal encouraged the government to control the trade in food grains and expand the urban public distribution system (Kannan and Pillai 2007).

The mainstream struggles for Independence, whether peaceful or armed, had reduction of large-scale poverty and inequality as part of their objectives, but the overarching objective was to achieve Independence. Although many movements including peasant movements in various parts of the country at different points in time did focus on economic issues affecting the common people, such issues were largely left to be addressed after the achievement of Independence (Nath 2006).

Social Protection Initiatives After Independence
Various aspects of social protection constituted an important part of the agenda of the Indian Freedom movement and the government of newly-independent India initiated several social protection programmes. Such programmes were considerably scaled up and new programmes were initiated in the late 1960s and early 1970s in response to various natural calamities, droughts and food shortages during that period. Next phase of spurt in social protection was witnessed in the later half of 1990s, when it was realised that the gains from economic reforms and increased globalisation of Indian economy were largely bypassing a large section of the society. Results of the 2004 general elections were largely seen in political and media circles as the rejection of ruling coalitions’ policies focussing more on economic growth and less on reducing poverty and inequality (e.g. Breman 2010) despite some analysts such as Panagariya (2008) arguing otherwise. The new government therefore committed itself to the ‘growth with human face’, scaled up various social protection programmes and launched new programmes such as an ambitious National Rural Employment Guarantee Programme (NREGP).

After Independence, the policymakers sought to achieve poverty alleviation by way of economic and infrastructural growth through planning processes. Redistribution was also attempted in the form of land reforms. Land reforms were however not successful in most states beyond zamindari abolition, partly because they were introduced without considering the social and economic relationships between the landowners and tenants, and the general power equations in the villages (Osmani 1991). Labour regulations, on the other hand, acquired increasingly pro-labour character in response to continued pressure exerted by the trade unions.

Natural calamities such as droughts and food shortages in the 1960s and early 1970s necessitated a direct attack on poverty. Such emergencies, combined with the political developments at the Centre, led to initiation of garibi hatao (eliminate poverty) campaign consisting of various anti-poverty programmes, targeting the small and marginal farmers, landless labourers, and drought prone areas. The campaign also reoriented the planning processes towards taking direct measures to reduce poverty along with the measures for economic growth.

The 1974-79 Five-Year Plan proposed a National Minimum Needs Programme (NMNP) and identified areas including rural health, elementary education, rural water supply, rural roads, rural electrification, nutrition for young mothers and children, environmental improvement of urban slums, and housing for rural landless labourers. The next Five-Year Plan resulted in implementation of Integrated Rural Development Programme (IRDP) targeting the BPL households for subsidised credit for creating assets, inducting technology and imparting trainings, and rural employment programmes involving public works, such as National Rural Employment Programme and the Rural Landless Labour Employment Guarantee Programme. Due to emphasis on poverty reduction and resultant programmes, a considerable reduction in rural as well as urban poverty was achieved between 1973-74 and 1986-87. The rate of poverty reduction has slowed down since then due to economic liberalisation policies adopted to address the low rates of economic growth (Deaton and Drèze 2002; Datt 1999).

Panagariya (2008) strongly correlates the increase in the rate of growth of Indian economy to the process of reform and liberalisation and claims that it has also led to substantial reduction in poverty. Reports of the National Commission for Enterprises in the Unorganised Sector (NCEUS)1 however clearly show that the people engaged in informal employment, constituting 93% of India’s total workforce, are steeped in poverty and that their deprivation has not been reduced substantially during the period from 1993-94 to 2004-05 associated with large-scale reforms in Indian economy. According to such reports, the employment growth rate plummeted during this period to 1.85% on an average from over two percent on an average in the immediately preceding ten years. More importantly, such growth in employment was almost entirely limited to the informal sectors of economy. This did not help the people, additionally employed during this period, to come out of poverty. Real wage growth rate also fell during this period. NCEUS thus concludes that the substantial jump in the economic growth was not translated into employment generation and enhancement of incomes for a large number of Indians.

Quality of employment was also found to be adversely affected in general during the period of high economic growth due to a process of informalisation of a section of formal sector workers, and job-cuts in government and public sectors. Increased tendency to outsource various types of work to contractors in the formal, including the government and public, sectors also contributed to this phenomenon (Breman 2010; Pais 2002; Visaria and Jacob 1995; Bhaduri 1993). Such informalisation, associated with low wages, longer working hours, and general lack of employment and social security further contributed to poverty among the informalised workers and deteriorated their living conditions.

Breman (2010) argues that the claims of poverty reduction due to economic growth caused by liberalisation of economy are largely based on the assessment of benefits accrued to the section of population possessing some means of production such as land, equipments or other forms of petty capital. Poor, however, lack resources and thus means of production, and sell their low-skilled or unskilled labour to earn livelihoods. They do not gain from increased growth rates in the economy. According to him, high levels of growth in Indian economy have greatly benefited the upper and middle classes, having means of production and/or formal sector employment, while a large section of population engaged in informal employment has not been able to participate in the Indian economic growth process. Increase in productivity with stagnating employment, during 1993-94 to 2004-05, as pointed out in the NCEUS reports, may also mean that the labour has been exploited even more during the period of high economic growth than before (Breman 2010). Topalova (2008) also demonstrated that the rate of reduction of poverty decreased substantially after introduction of the economic reforms.
 
Although economic performance of India has been observed to be much less affected by the global meltdown than most other world economies after 2008, the meltdown has severely affected informal sector workers adversely in terms of lack of employment opportunities and wage cuts, as is revealed by various micro level and sectoral studies (e.g. Hirway 2009; SEWA 2009). ‘In contrast to capital which is bailed out in the economic recession, labour seems to have taken the brunt in the policy dealing with the effects of the downturn (Breman 2010: 44)’.

On the issue of relationship of rising inequality with economic liberalisation, Panagariya (2008) does not have evidence to refute the claims of Deaton and Drèze (2002: 3740) regarding ‘strong indications of a pervasive increase in economic inequality in the nineties’. Deaton and Drèze (2002) further claim that this is an unprecedented development in the context of Indian economy. Role of capital, particularly in informal sector, may provide an analytical tool to explain the rising inequality in the face of economic growth. Due to greatly skewed bargaining power between the owners of capital and labourers in the informal sector, the labour gets paid meagrely and therefore return to capital is much higher in informal sector than the formal sectors (Breman 2010). Increase in informalisation associated with recent high growth rates in Indian economy is therefore likely to have contributed to increased inequality. ‘An unconditional reliance on the free interplay of market forces in order to maximize economic growth is adhering to a road map which produces more deprivation for the segments down below and more wealth for those higher up...(and additionally), the ongoing squeeze at the bottom is directly related to the accumulation of surplus at the top (Breman 2010: 45)’.

Concluding Remarks
This article has attempted to present an analysis of evolution of social protection in India through various historical eras in the political economy perspectives of such eras. It is argued that while labour regulations in the Indian organised sector were achieved due to a protracted struggle of workers, other measures of social protection involving workers in the unorganized sector were initiated after realizing that economic growth in itself does not contain mechanisms to make it inclusive. Variety and scale of such programmes was increased in response to the evidence that enhanced rate of economic growth caused by the economic liberalization is resulting in greater inequality. The recent initiatives towards social protection in India thus need to be viewed in the context of rising inequality due to economic reforms, persistent poverty in spite of the reforms, and the consequent political compulsion to provide additional policy spaces to those left out of the growth processes. However, as pointed out by Panagariya (2008), the economic growth did enable the government of India financially, with increased levels of government revenues, to initiate the new social protection programmes and upscale the existing ones. 

End-notes
1 Arguably ‘the largest single national effort in the world to encompass the characteristics and needs of what is known as the informal sector’ (an ILO official cited in Breman 2010: 46)

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(Anurag Priyadarshee is an Indian Postal Service officer of 1989 batch. During the course of his career with Government of India, he has held various positions with the Department of Posts at Bihar, Uttar Pradesh, Rajasthan and Gujarat states. He has also been on deputation with International Fund for Agriculture Development (IFAD), a United Nations agency, and Azim Premji Foundation, a Non-Governmental Organization. Before joining Indian Postal Service, he taught Physics at Kanpur University. He holds Masters degrees in Physics and Economics. He has recently completed his PhD at the Institute for Development Policy and Management (IDPM), The University of Manchester, UK. He has been published in international journals and has contributed chapters for edited books. He has also reviewed submissions to International Journal of Public Administration, published by Routledge, UK. Dr. Priyadarshee is currently looking after the rural network of India Post and is engaged in designing measures to revitalize this unique and hugely relevant rural infrastructure towards financial inclusion, delivery of social protection programmes, and overall social and economic development of rural India.

The views expressed in the article are personal and do not reflect the official policy or position of the organisation.)



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