[Answered] A unified welfare state could consolidate schemes from the Centre and states. Examine the administrative, fiscal, and political challenges of such consolidation in a federal system, and its potential impact on welfare delivery.

Introduction

India’s welfare architecture comprises a complex web of over 34 major social protection schemes, 24 pension programmes, and numerous state-level initiatives. The idea of a unified welfare state—pooling Centre–state resources into an integrated, rights-based framework—promises efficiency and universal coverage but faces significant governance challenges in a federal system.

Rationale for Consolidation

1. Efficiency gains: Avoid duplication, streamline administration, and optimise scarce fiscal resources.
2. Beneficiary ease: Single-window access through digital platforms reduces citizens’ transaction costs.
3. International precedents: Brazil’s Fome Zero and South Korea’s integrated pension and health insurance systems improved targeting and fiscal sustainability.
4. Digital India advantage: Use of JAM trinity (Jan Dhan–Aadhaar–Mobile), UAN (EPFO), and e-Shram for interoperability and portability.

Administrative Challenges

1. Data integration: Fragmented beneficiary databases (e.g., e-Shram for unorganized workers, EPFO for formal sector) have overlaps and gaps.
2. Interoperability issues: Different eligibility norms and IT systems across ministries and states.
3. Capacity constraints: Need for trained personnel at last-mile delivery points to manage integrated systems.
4. Standardization vs. local needs: Uniformity risks ignoring diverse socio-economic conditions across states.

Fiscal Challenges

1. Cost of transition: Harmonizing benefits and upgrading IT infrastructure requires substantial upfront investment.
2. Resource-sharing formula: Centre–state disputes over funding shares, especially for poorer states.
3. Sustainability: Expanding coverage without rationalizing entitlements could strain fiscal space; India’s social protection expenditure is around 1.5% of GDP vs. Brazil’s ~8%.
4. Leakage vs. exclusion trade-off: Over-tight targeting can exclude needy beneficiaries; loose targeting raises fiscal burden.

Political Challenges

1. Federal autonomy concerns: States may resist losing control over flagship schemes used for political branding.
2. Populist pressures: Election-time welfare announcements often conflict with standardized, long-term plans.
3. Consensus building: Requires cooperative federalism akin to GST Council, but welfare has stronger political sensitivities.
4. Regional priorities: Needs in BIMARU states (e.g., nutrition, maternal health) differ from industrialized states (e.g., skill-linked employment).

Potential Impact on Welfare Delivery

Positive Impacts:

1. Improved targeting: Unified beneficiary database enables better identification and portability of benefits.
2. Reduced duplication: Savings can be redirected to expand coverage or enhance benefit levels.
3. Holistic support: Linking entitlements (e.g., pensions with grandchildren’s education benefits) multiplies impact.
4. Ease for citizens: Single ID-based access improves trust and uptake.

Risks:

1. Bureaucratic centralization: May reduce state-level innovation in welfare design.
2. Implementation shocks: Transition errors could temporarily disrupt benefits for vulnerable groups.

Way Forward

1. Federated model: Central baseline guarantees, with states offering top-ups.
2. Institutional mechanism: National Social Security Council with state representation to oversee integration.
3. Phased roll-out: Begin with high-overlap sectors like pensions, health insurance, and food security.
4. Leverage Digital India stack: Ensure Aadhaar-based authentication, UPI-linked transfers, and NDHM integration.
5. Political consensus: Build on models like GST Council and PM-Gati Shakti for joint decision-making.

Conclusion

A unified welfare state can transform delivery efficiency, equity, and fiscal prudence, but success hinges on cooperative federalism, digital integration, and political consensus to balance national standards with local autonomy.