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Dvara Research Blog | What should social protection do?


Author

Anupama Kumar

In our last post, we set out some questions that would guide us in framing a working definition of social protection. In this post, we set out our vision for what social protection in India should aim to do, and then pose some questions on how we might achieve this.  

In the short-to-medium term, we agree with Guhan (1994) that policymakers in India must address absolute poverty and deprivation. We hesitate to arrive at a prescriptive definition of poverty and deprivation, as there are a number of different metrics used in various settings. The World Bank has calculated India’s poverty headcount ratio at 22.5% of the population. Meanwhile,  according to the NITI Aayog, 25% of Indians are classified as multidimensionally poor in 2021, based on data from the National Family Health Survey. Many more Indians may experience transient poverty as a result of financial shocks. We acknowledge that poverty can be context-dependent, and we suggest that policymakers use a dynamic definition of poverty, to account for changing social needs. Having said this, we believe that at the very least, policymakers should aim to ensure that all persons are able to access enough to meet their basic needs.  

Social protection should aim to fulfil the following objectives, namely: 

  1. To meet basic minimum needs of all persons, including nutrition, clothing, housing, basic healthcare, and basic education for children: The first goal of social protection should be to prevent absolute deprivation. The first of the UN’s Sustainable Development Goals is to “end poverty, in all its forms, everywhere,” and ILO’s Recommendation No. 202 states that at the very least, states must provide a minimum basket of goods and services and access to basic healthcare for all people. This is the first, and most essential component of a social protection net. We agree with ILO’s Recommendation 202 that the primary responsibility for ensuring a basic social safety net should lie with the state, and that the state must ensure a minimum basket of goods and services. These goods and services must, at the very least, enable households to exit a state of multidimensional poverty.  
  1. To have the means to access these basic minimum needs, such as financial services to access cash transfers, or functioning internet connections to access other government services:  As we discussed in the last post,  in this series, policymakers may choose a variety of ways to deliver social protection measures. This may be as commonly available goods, or as targeted cash transfers, or through a variety of other means. They may be mediated by digital identities, private actors in the financial system, or other agents. We note that there may be costs associated with each of these measures, in the form of time or money taken to actually receive a benefit, For instance, in India today, many services are delivered through a network of private and public actors. A person seeking to withdraw a cash benefit may at various points interact with a banking correspondent, a village-level entrepreneur, or a bank branch. They may need to use a cell phone with a data plan or pay commissions to these private actors. Similarly, people may need to travel to healthcare or education facilities, or to fair price shops to access food rations. They may incur other costs to find out about and enrol into a scheme or to receive redress for grievances. These costs can erode the value of the underlying benefit provided. We believe that it may not always be possible to remove all barriers to access, however, we believe that the cost of accessing basic minimum goods and services should not be unduly burdensome for those seeking to use them.  
  1. To provide households with access to coping mechanisms against potential shocks to income: Social protection must protect against risk. Financial shocks can push households into poverty, and it is vital that households are protected against this. Some of these risks can be anticipated, such as the risk of illness or death of the main income earner in a household. These require systematic risk protection. In the past, we have referred to old-age pensions and life insurance as vital parts of the social protection net in India. We believe that creating adequate risk pooling mechanisms is key to a social protection net. 
  1. To enable households to build long-term wealth: Long-term, we believe that the goal of social protection today is to enable households and families to have the means to consistently meet their needs and protect themselves against risk. ILO (International Labour Organization) Recommendation 202 provides that states must aim to eventually provide their populations with a comprehensive social insurance net, as set out in ILO’s Convention No. 102 on Social Security. This is an important aspirational goal, and we note that the recent Code on Social Security has made attempts to extend formal social safety nets to those working in the unorganized sector. However, more than 50% of India’s workforce engaged in self-employment, and many others face periods of cash flow poverty, which in turn may mean that any risk protection mechanisms built on existing cash flows may become more difficult. Rather, we believe that social protection mechanisms should aim to provide households with the means to build up long term wealth. The goal of promotive social protection measures, such as livelihood generation measures is to enable households to build livelihoods and to stabilize incomes. This, in turn, will allow people to access adequate risk protection and remain out of poverty, and should be the long-term goal of social protection measures.  

In our view, these objectives lie at the core of social protection, and policymakers must ask how any measure– might help achieve these. In practice, policymakers must choose between a variety of tools and measures to achieve these outcomes. Social protection measures might be designed to protect against a shock that has already taken place, to prevent the consequences of a future shock, or to promote more stable incomes (World Bank 2017).We will continue to refer to these objectives in subsequent posts.  


Cite this Item:

APA

Kumar, A. (2022). What should social protection do? Retrieved from Dvara Research.

MLA

Kumar, Anupama. “What should social protection do?” 2022. Dvara Research.

Chicago

Kumar, Anupama. 2022. “What should social protection do?” Dvara Research.



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