Artifical Intelligence (AI) for Inclusive Societal Development - Viksit Bharat 2047

NITI Aayog on October 8 released a pioneering study, AI for Inclusive Societal Development. The roadmap proposes a national mission "Digital ShramSetu" that leverages AI and frontier technologies to overcome systemic barriers faced by informal workers and can be harnessed to transform the lives and livelihoods of India’s informal workers. The five key components of roadmap:

1. Develop a national blueprint
2. Coordinate fragmented stakeholders
3. Catalyse strategic partnerships
4. Translate innovation into impact
5. Provide policy and regulatory support

Ecosystem 

India has one of the largest informal economies in the world, with about 90% of the workforce employed under informal arrangements, contributing nearly half (around 45-50%) of the country's GDP having 490 million informal workers. The informal sector includes unregistered enterprises, self-employed workers, casual laborers, domestic workers, and informal service providers, often lacking social security benefits. India's e-Shram portal, launched in August 2021 to create a National Database of Unorganised Workers (NDUW), has registered over 30.98 crore unorganised workers as of August 2025.

Migration and urban informal work are intertwined, with informal jobs. The informal sector poses challenges like poor working conditions, job insecurity, and exploitation, especially for migrant workers. Indian MSMEs employing informal workers also suffer on a competitive scale is the quality of talent. Businesses compensate for inferior quality labour with depressed wages which in turn creates an unattractive career pathway; hinders upward mobility; and disincentivizes talent.

Additional Reading: Why do rural enterprises remain small ?

Challenges

1. Harassment of MSMEs by labour inspectors is a reported issue in India, reflecting concerns over misuse of power, frequent inspections, and arbitrary penalties. The complex regulatory environment and multiple overlapping laws cause delays and create opportunities for rent-seeking behaviors from officials.

2. Workers with limited digital literacy become more dependent on intermediaries (officials, cybercafe operators, CSC operators) who can extract rents. This will create new rent-seeking opportunities. Local officials could charge fees for "faster processing" of digital IDs or demand bribes

3.Bureaucrats resist change, preferring to maintain their power and scope. Incentives encourage expanding departments and budgets rather than achieving efficiency. The administrative state centralizes power among unelected officials. The same bureaucrats who struggle with existing schemes will be tasked with implementing AI-powered verifiable credentials and smart contracts. 

4. Drawing from James C. Scott’s work, the discussion delves into how increased state legibility—enabled by systems like Aadhaar and UPI— have enabled government to operate from 2009 to 2024 without Privacy Law. The 15-year gap since Aadhaar’s launch without a privacy framework underscores systemic neglect. India currently lacks a fully enacted constitutional act specifically dedicated to AI regulation akin to the European AI Act.

5. Even if there is motivation in the government at top tiers, there is not always capacity to understand complex technological systems by frontline user.  India's DPI success (UPI, Aadhaar) succeeded because they involved standardized, high-volume transactions with limited discretionary implementation. Digital ShramSetu requires complex, discretionary decision-making at the local level—exactly where Indian state capacity is weakest and most corrupt.

6. Like poverty status, the classification of workers as formal or informal is fluid. Workers may shift between informal and formal employment due to job transitions, gig economy roles, and contractual changes. This fluidity complicates policy design, social protection coverage, and statistical measurements, demanding adaptive, inclusive frameworks.

7. India's skill development ecosystem reveals a systematic corruption pattern that AI implementation could either amplify or mitigate, depending on design choices.

Suggestions

1. AI algorithms can be used to match registered workers with job opportunities in their skill areas and geographic locations, optimizing employment pathways and reducing informality and underemployment. This can be initiated from Polytechniques and ITIs in the initial phase and gradually used for unorganized workers.

2. e-Shram portal must provide AI-facilitated interoperability with other government benefits like UDYAM, e-Pension, post office and healthcare schemes can offer a seamless experience for workers, facilitating holistic social protection. 

3. When an informal worker registered on e-Shram secures formal sector employment, their verified credentials and employment history can be linked to EPF enrollment processes, helping with identity verification, tracking contributions, and ensuring portability of social security benefits.

4. The roadmap assumes informal workers want to transition to formal systems. Application of the technology must necessarily be accompanied by design of transparent processes.  AI can be used for self-certification, digitization of compliance to reduce physical inspections, and stronger grievance redressal mechanisms to protect MSMEs from excessive or unfair enforcement. This is important to create pathways for the informal worker to initiate the journey into an entrepreneur integrated into formal economy. 

5. Labour courts and dispute resolution mechanisms are increasingly exploring the use of AI to improve efficiency, reduce backlogs, and enhance fairness in labour law enforcement. AI can analyze large volumes of workplace cases, assess precedents, and suggest outcomes based on legal principles, helping resolve disputes like wrongful termination more systematically.

6. Rather than voluntary adoption, India can consider sector-by-sector mandatory digitization starting with high-impact areas like contractual workers of PSUs and PM Vishwakarma beneficiaries. 

7. Last but not least, India must separate policymaking, implementation, and oversight functions.  There must be creation of an independent ombudsman systems for digital services and platform involved in gig economy. 

8. The mission should operate in true mission mode: establishing autonomous implementation units at state level with direct resource allocation, hiring authority, and performance accountability, bypassing traditional bureaucratic hierarchies that create implementation bottlenecks.

Global Lessons

Estonia’s government ministries are required to appoint AI officers and create AI implementation plans, effectively making AI adoption in public sector organizations a regulated requirement. In summary, Estonia mandates AI adoption and implementation plan within defined sectors such as education and government administration. Yet, Estonia's digital success required complete administrative restructuring before technology deployment.

Inside Amsterdam’s high-stakes experiment to create fair welfare AI: Even though Netherland Government worked hard to build a fair AI system to detect welfare fraud, the algorithm still showed bias against people with non-Dutch speaking migrants and those with lower incomes. Ethical AI needs ongoing human oversight, community involvement, and understanding that automation has limits when dealing with complex social fairness issue.

Conclusion

India's Digital ShramSetu mission confronts a fundamental paradox: it requires sophisticated state capacity to implement solutions for populations that exist precisely because of weak state capacity. India's Digital ShramSetu mission could indeed be transformative, but success requires acknowledging current limitations rather than assuming technological solutions will overcome social and economic realities. The Digital ShramSetu mission's success depends on recognizing that technology is a governance multiplier, not a governance substitute

Building Inclusive Digital Futures: The Role of Digital Public Goods and Infrastructure

Here is a blog post based on the learnings of Digital Public Infrastructure(DPI) and Good(DPG) for Impact with a special focus on India's digital ecosystem and global perspectives. 

The digital transformation of societies and economies hinges increasingly on foundational systems that provide open, trusted, and interoperable digital infrastructures. Digital Public Goods (DPGs) and Digital Public Infrastructure (DPI) are emerging as critical enablers of inclusive growth, transparency, and innovation at scale. This blog dives deep into how these concepts are shaping India’s digital landscape and what lessons the world can learn from India’s pioneering efforts.

The rapid growth of Digital Public Infrastructures (DPIs) and digital platforms is driven by a convergence of policy shifts, technological evolution, and societal demands. At the same time, data-based governance has become central to policymaking, with real-time analytics enabling targeted welfare delivery, fraud prevention, and performance monitoring. These forces, combined with advances in cloud, open-source software, and API-driven architectures, are creating a virtuous cycle of adoption where DPIs and digital platforms are not just tools, but foundational enablers of inclusive, transparent, and efficient service ecosystems.

What Are Digital Public Goods and Infrastructure?

Digital Public Goods (DPGs) are open-source software, data, standards, and AI models that are freely available for anyone to use, adapt, and scale. They serve as building blocks for creating digital services that are inclusive and scalable globally. Examples include India’s Aadhaar biometric identity system, UPI payment platform, and open protocols like Beckn for commerce.

Digital Public Infrastructure (DPI) refers to large-scale, interoperable digital platforms built on foundational DPGs that enable ecosystems of public and private actors to deliver services. DPI represents the "railways" or highways of the digital economy—open, shareable, secure, and enabling many-to-many interactions. India Stack, which powers Aadhaar, UPI, DigiLocker, and Account Aggregator frameworks, is a prime example.

India’s Digital Leadership: The India Stack and Beyond

India Stack integrates several layers of DPI, each designed to solve key challenges of identity, payments, data exchange, and commerce:

These layers underpin numerous government and private sector services, creating a robust digital ecosystem promoting financial inclusion, transparency, and new business opportunities.

Emerging Innovations: AI & Language Technology

New digital layers harness AI and natural language processing to serve India’s digitally underserved populations:

1. BHASHINI (Bhasha Interface for India): A multilingual AI-powered language platform offering translation, speech recognition, and voice-enabled digital services across 22 Indian languages, breaking down language barriers and enabling greater digital participation.
2. AI-driven Personalization and Fraud Detection: Embedded in services across healthcare, financial inclusion, and governance, AI models enable predictive analytics, user-tailored experiences, and automated compliance, enhancing service quality and security.

Global Perspectives on Digital Public Infrastructure

Digital IDs generally fall into two categories — foundational and functional — and different countries implement them according to their governance and service delivery priorities.

Foundational digital IDs serve as universal, multipurpose identifiers that legally establish an individual’s identity and enable access to a broad spectrum of services such as banking, healthcare, voting, and welfare. Their primary purpose is to act as the central proof of identity recognized across multiple sectors. Notable examples include India’s Aadhaar, which combines biometric and demographic data to facilitate services like e-KYC and subsidies.

Functional digital IDs are sector-specific and designed to verify eligibility or access within a particular domain rather than serving as a universal identity. They function within defined service areas and often rely on foundational IDs for authentication. Examples of functional IDs include India’s ration card and voter ID, which are primarily used for food subsidies and electoral processes, respectively.

These initiatives underline the global recognition that public digital infrastructure is foundational to modern governance and economic development.

Benefit of Digital Public Goods and Infrastructure

DPG is a public, private, and government read, which means that public citizens and everybody else also participate into building it, maintaining it, and enriching it. And private players make use cases, make business cases out of it, make money out of it, and help to translate those government benefits to the citizens and in turn, making a win-win situation for everyone. As the cost of acquisition goes down in digital mode, and the moment the cost of acquisition goes down, the cost of serving becomes easier for the private companies, for government, and also for citizens to access those services. 

MahaAgri‑AI Policy 2025–2029

India's agricultural transformation is being driven by digital innovation, inclusive finance, and structural reforms. Initiatives like the Digital Agriculture Mission and Agristack are expanding crop intelligence and enabling data-driven decision-making. Technology is being leveraged to increase yields without raising input costs, while AI tools are helping small and marginal farmers manage risks and improve profitability. AI can help in all stages of farming right from predictive analysis of weather/soil to irrigation management and crop health monitoring to dissemination of information and packaging and storage of commodities.

MahaAgri‑AI Policy 2025–2029 approved by the Maharashtra Cabinet in June 2025, is truly a game changer for the agricultural sector due to its bold, technology-driven vision and actionable roadmap. It is India’s first dedicated artificial intelligence policy for agriculture, setting a benchmark for other states and the nation. This is India’s first comprehensive AI policy focused exclusively on agriculture.

Key Goals and Vision: 

• Make Maharashtra a national and global leader in AI-enabled, farmer-centric, and sustainable agriculture.
• Address challenges like low productivity, climate risks, water scarcity, market inefficiency, and lack of real-time decision support.

Major Features

• AI Integration Across the Value Chain: Adoption of AI, GenAI, drones, IoT, remote sensing, and data platforms for precision farming, crop and soil monitoring, water management, and market access.
• Digital Public Infrastructure: Launch of Agricultural Data Exchange (ADeX) for secure data sharing, an AI Sandbox for startups, and a Geospatial Intelligence Engine for climate/crop monitoring.
• Real-Time Advisory Platforms: AI-powered Multilingual “VISTAAR” platform for personalized farmer advisories, integrated with Agristack, Bhashini, and national digital assets.
• Blockchain Traceability: QR code-based blockchain systems for export crops (e.g., grapes, bananas, pomegranates) to improve food safety and trace exports.
• Support for Startups & PPPs: Grants, hackathons, open calls, and public-private partnerships to foster innovation and market-ready solutions.
• Farmer Digital Literacy: Training, fellowships, demo farms, and community outreach to ensure inclusive, confident adoption.
• Governance: Robust oversight with a State-Level Steering Committee, Technical Committee, and a dedicated AI & Agritech Innovation Centre.

Broader Impact: 

• Supports national initiatives such as Agristack, Maha-Agritech, Mahavedh, CropSAPP, and Agmarknet.
• Designed to be inclusive, with special attention to reaching the last-mile farmer and ensuring ethical, responsible AI use.

Implementation Phases

• Phase I (0-3 months): Foundation and institutional setup
• Phase II (3-9 months): Pilot implementation and platform launch
• Phase III (9-12 months): Statewide scale-up
• Phase IV (12-36 months): Consolidation and policy evolution

Budget Allocation (₹500 Crore)

• Digital Infrastructure: ₹50 crore
• AI Projects Support: ₹350 crore
• Innovation Centre Setup: ₹30 crore
• Capacity Building: ₹50 crore
• Global Conference/Summit: ₹20 crore

This comprehensive framework positions Maharashtra as India's first state with a dedicated AI agriculture policy, creating a replicable model for digital transformation in farming. MahaAgri‑AI 2025–2029 is widely seen as a model for India and developing nations in harnessing AI for a sustainable agriculture future.

Why Government Schemes Fail? - 3

Over ten years and countless reflections, the third part of "Why Government Schemes Fail?" explores why government schemes often fail at the grassroots level. The first and second of "Why Government Schemes Fail" can be accessed. 

Government schemes are essential tools aimed at uplifting vulnerable populations and promoting inclusive growth. Yet, many schemes fall short of their intended outcomes due to a complex mixture of design flaws, governance shortcomings, and operational inefficiencies. Good policy, like good literature, takes personal lived experience as its starting point. 

Let me start with Scheme Design: The Blueprint for Success or Failure. Policy design is inseparable from governance outcomes. Schemes structured with complex rules, poor monitoring, unclear eligibility criteria, or ambiguous grievance mechanisms open doors to inefficiencies and corruption. Government schemes often lack transparency while in the design. Greater openness and participation before launching schemes can ensure better planning and public trust.  

Bringing together insights from practical experience, internet research, and foundational economic policy thought leaders like Vijay L. Kelkar and Ajay Shah, please find some insights: 

1. Leakage (Inclusion Errors): When benefits reach ineligible individuals, wasting scarce resources and weakening political support for programs.  Governments often focus on reducing leakages because they represent immediate financial losses and corruption. 

2. Exclusion Errors: When eligible individuals remain unserved due to bureaucratic failures and lack of social awareness which hurts the very citizens these schemes intend to help. 

3.  Poor state capacity means that government institutions struggle to properly plan, carry out, and track policies.  Indian states face challenges like excessive power in hand of the few skilled bureaucrats, lack of technical staff, and very poor institutional memory. 

4. Many poorly paid ad hoc staff and officials juggling multiple tasks reduce the overall effectiveness of government. Additionally, frontline workers are often overworked with high workloads, which strains their ability to perform efficiently and weaken government service delivery.

6. Weak incentives for better work hinder efficient government service delivery. Issues like poor monitoring of vendors and delays in payments reduce motivation for timely and quality performance.

7. Poor public procurement procedures in the government add to inefficiencies and reduce accountability. Complex, inconsistent, and bureaucratic procurement rules limit competition, cause delays, and enable corruption through practices like favoritism, bid-rigging, and limited vendor participation. 

8. Elite capture of public policy and bureaucratic dominance in decision-making lead to the control of resources and benefits to serve their own interests. Powerful local elites often sideline the poor, which fosters corruption. The corrupt money is then transferred back to the elites and bureaucrats, perpetuating the cycle.

9. Insufficient integration across government departments leads to siloed implementation. Schemes are often designed for the convenience of departments rather than focusing on the needs of the users. 

10. Schemes do not operate in an apolitical vacuum. Political incentives often favor launching high-visibility programs over investing in challenging, long-term institutional strengthening.

11. Especially, there is an 'ABCD' culture from top to bottom in rights-based services—A stands for Avoid, B for Bypass, C for Confuse, and D for Delay. 

No amount of sensitization can hope to overcome resistance from vested interests. be it of a financial, power, or political nature. The government scheme is doomed to fail but those who have designed the scheme will not be made to own the responsibility for its failures.  In conclusion, it is important to approach case studies based on "success stories" with caution, as they often emphasize positive outcomes while overlooking challenges. There is a lot of talk about an ‘action-oriented government,’ but it often involves dramatic announcements praised by a media that rarely asks follow-up questions. 

A note on Public Procurement

In a feat of digital procurement, Central Public Sector Enterprises (CPSEs) witnessed a staggering Rs 1 lakh crore procurement in FY 23-24 through Government e-Marketplace (GeM). A commendable achievement. Now, that the good news is settled, we will be discussing insights on public procurement below:

Given the enormous size and the stakeholders' vested interests, public procurement is entangled in unfair practices. This leads to an entry barrier and a cause for significant transactional costs arising from, for example, delays in payments and bribery required to get them released. One can read Insights into cartels, bid rigging, fr, ads and other corrupt practices: Collusions in Public Procurement (cag.gov.in).

Among the serious issues highlighted by private companies that work on government projects is receivables because the Indian government is an all-powerful entity with the ability to delay/deny payment. Pavithra Manivannan and Bhargavi Zaver who are the researchers at the CMI-Finance Research Group have authored a blog post: How large is the payment delays problem in Indian public procurement?

The government allocations for social welfare have increased over the years, although the utilization of funds has remained low due to procedural difficulties, straitjacketed rules, delays in payments, corruption, and political interference. This disrupts nonprofit operations and undermines nonprofits’ attitudes towards working with the government, which has a more detrimental effect on public service delivery.

This reflects the dichotomous principle of government which on the one hand advocates for greater transparency and efficiency of government organizations and on the other hand refuses to penalize these organizations for huge delays in the payment to the vendors.

Issues created due to poor public procurement:

1. Many firms do not take part in public procurement as the government procuring entities often delay releasing the payments. The firms that are part of the public procurement face working capital shortage since delayed payment affects companies' cash flows negatively. Unless this money is unlocked, the problem of the payment percolates and is reflected in banks' stressed assets.

2. This is like Gresham's law (Bad money drives out good money) but in the public procurement domain. The payment delays impose an unnecessarily heavy burden on small firms, potentially knocking them out of the competition and discouraging them from participating in other procurement processes. Now all that is left are the big firms that are either immune to corruption or the firms that adopt corrupt practices. The more valuable 'good money' gradually disappears from circulation.

3. The government is legally liable to pay on time but the firms don't enter into a dispute for the delayed payments. The dispute with the government creates bad faith for future bids and contracts. If the procuring officials are themselves responsible for causing grievance, there is little chance of the aggrieved bidder getting his due from such a redressal system. In addition to that India does not have an Independent Grievance Redressal Mechanism in the procurement system.

4. It is worth noting that India hasn’t even signed the Government Procurement Agreement (GPA) as a member of WTO. Only recently, India has included government procurement in the India-UAE Comprehensive Economic Partnership Agreement.

5. Public officials also determine which vendors will thrive and which will fail by setting the terms and conditions under which public procurement takes place. This situation creates a situation of cartelization from the supply side.

Remedies:

1. Every organization has an incentive to conceal perceived areas of poor performance in public procurement. The government has to create independent and effective oversight processes where data on delayed payments is openly & easily available for public scrutiny.

2. Strengthening the monitoring mechanisms must lead to the creation of a strong knowledge management system for establishing best practices and creating institutional memory.

3. A lot of issues can be resolved if dispute resolution and claim settlement are faster.

4. Opening up government procurement to global competition with best-in-class project management and governance practices will help improve the quality of government projects.

Good Governance & Public Policy

What is Public Policy ? Public policy focuses on the processes by which various types of policies and regulations that affect members of the public are created and enforced. Public Policy deals with public goods delivery – political economy, taxation, law and order, good social and physical infrastructure, including better education and health facilities – and facilitate provision of private goods (cheaper power, flexible labour laws and other subsidies). The guiding principles for better public policy include building people’s ownership and participation in the governance and decisions affecting their lives. Regulation, Redistribution and Equity came to the forefront of policymaking.

Resources be it human, natural or financial are limited in a country and a government must utilize them in the most productive manner can achieve the best possible growth. That is the essence of good governance. The first and foremost requirement of good governance is broadly distributed political rights among citizens and the government accountability and and transparency in public administration. An ideal public service institutions will be decentralized, professional and autonomous management structures.

The theoretical framework however doesn't work smoothly in the real world. Governments in many developing & underdeveloped countries are corrupt and never work in favor of the people. They work for the interests of specific groups. It would be naive to think that governments work for the public all the time. Economics works alongside and interacts with social and political forces framing the policy. Politically motivated decisions, the undisclosed profiteering, the conflicts of interest, the vested interests, & the bad experiments with good intentions can lead to the flawed policy making process. So how the end objective is achieved ?

Policy makers must be open-minded and open-armed to combat such conflicting interests arising due to potentially corrupt motivation. They must have sound knowledge of the local context of a community – its history, politics, social structure, and culture, along with its economics. More the diverse the stakeholders in policy making, the probe in the issue will examine ground realities, re-validate assumptions on which our policies rest, and evaluating  new initiatives. The real impact of policy decisions are measured by three factors:

* Number of beneficiaries covered under the policy
* Number of beneficiaries who experience a positive change with the implementation
* Participation of the people and innovation springing from the outcomes.

Public opinion is varied and contested space, continually shaped and reshaped over time. Popular opinion in India generally overlook corrupt vested interests or don't want to go for long term reform. Hence, Indian state has always insulated public policy from open debate. The bureaucracy in India has never let the control of policy shifts to an autonomous institutions and public has suffered the ill results of lack of knowledge among civil servants. Bureaucracy seldom promotes creativity and, under the cover of neutrality, preserves the advantages of the powerful by dominating the weak. In the government systems, professionals are always crowded out by the imprisoning logic of bureaucracy. As described aptly by Prof Ajay Shah: In the West, leaders choose the direction of public policy. Government is like a car, which goes where the leader directs. But in India, the car is broken, and just turning the steering wheel is ineffective. To do public policy in India, the skill required is that of an engineer and not the driver. It is about opening the hood, understanding what is wrong with the institution, and fixing it.

Each policy must face several test: Are the policies realistic? How will they be implemented? What results will they produce in the long run? Were there more reasonable, less risky, cost effective, user friendly, & more inclusive policy measures that would have yielded as much benefit as the rolled out one ? There is no ultimate policy measure but always a solutions-oriented approach means more innovative outreach and trade-offs in a wiser way. I will be putting more on the non academic and self learned diagnosis of public policy in coming days. Watch this space and hear buzz words like committees, accountability, check and balances, transparency. Have I lost you yet? I will.

Mid Day Meal (MDM) Program

Theda Skocpol, Professor of Government and Sociology at Harvard, notes that spending on education and family health care is especially likely to generate social and economic returns. Midday Meal (MDM) program is a school meal programme of the government of India designed to improve the nutritional status of school-age children nationwide. India's MDM program feeds 120 million children and employs 2 million women. It's an initiative that changes lives and provides human-capital investment in millions of children. 

The poorest of the poor are defined as those who can eat only when they get work and who lack shelter, proper clothing, social respect, and means to send their children to school. They have no land, live on daily wages, and need to send school-age children to work in times of crisis. They send children to government schools as this is the only way to ensure one time meal to their wards and the best chance for children to break the cycle of poverty. MDM scheme has many potential benefits: attracting children from disadvantaged sections (especially girls, Dalits and Adivasis) to school, improving regularity, nutritional benefits, socialisation benefits and income support to women .

An impact study has shown that the food stamps alternative or the direct income support is not feasible, for it may lead to adverse consumption choices by the targeted households. This would happen, particularly in countries like India, where educational and awareness levels of the targeted households are low.

Learn more in this animation designed by Rhitu Chatterjee and Mathilde Dratwa.

SECC data is out.

As per Prof Cornel West, Democracy always raises the fundamental question: What is the role of the most disadvantaged in the public interest? The catch in the valid question lies in the definition of the 'Disadvantage Class/Caste'. The definition of "Who are they" varies among politicians, academics, and policymakers. Any major program in any sector can't be effective without a robust information system. The road to social justice for all should be based on solid data for understanding ground realities.

SECC data is out. This census takes caste into account for the first time in any such exercise since 1931. But the government is hiding OBC numbers. The previous government led by the Congress had also decided to conduct a caste-based census, but not to make the data public. The reasons for withholding this data can only be political.  Data on economic indicators, with special enumeration of SCs and STs, is done by the regular census as well. SECC was commissioned because many parties wanted similar numbers for the OBCs to pitch for political mileage. However, it is always tough to digest that SECC was done to mitigate the absence of large-scale, credible, and empirical data for public policy. But, it is a matter of time before the numbers are made public.

There was once a huge hue and cry over caste census as being labeled as divisive by upper caste-dominated groups. Prof. Kancha Ilaiah had explained this in his article: Who’s afraid of caste census? --- "Caste culture is all around us. In the dalit-bahujan discourse, the upper castes are being shown as constituting less than 15 per cent. This could be totally wrong. Even within the lower castes there are several false claims about numbers. Every caste claims that it is numerically the strongest and keeps asking for its “rightful” share. How to tell them that their claims are wrong? When caste has become such an important category of day-to-day reckoning it is important to have proper data at hand to tell communities that they constitute this much and cannot ask for more than their share. It is true that we cannot distribute everything based on caste. But caste census is the right basis for statistics such as literacy rate and issues like the proportion of representation. Once we cite the Census data there cannot be any authentic opposition to that evidence."

There is unquestionable value in a general policy of reservation as merit can't be the only criteria for granting subsidies and quotas. Social Justice and economic barriers also need to be fulfilled for deciding such national/state-level policies. Despite deep affiliation with caste groups, the public is ready and eager to advance toward a more transparent and accountable society. And, making SECC data publicly available would improve transparency in the political debates if not direct action leading to better governance.

The bigger question isn't the availability of the data but the lack of willpower to implement the policy. There is all the required data available for STs in the census yet there is a siphoning of funds allocated to SC/STs. (Systemic denial and diversion of budgetary allocations). Many departments have failed miserably in allocating funds and even spending that minor fund for the TSP as per the proportion of the tribal population of the state. The manipulation made by the bureaucracy and political leaders in making the decision to divert the TSP fund showed a huge contrast between public policy and data-based evidence. Also, there is a deafening silence on Gender Budgeting (GB) in the corridors of power. So we have a country where no one pays heed to independent minds seeking evidence-based policy in the social sector. In such a political system, one has to learn to manipulate rather than simply put the case.

A pure functioning meritocracy would produce a society with growing inequality, but that inequality would come along with a correlated increase in social mobility. Is this really happening across caste and religion? We can only guess policy as there is not yet sufficient data for planning on caste-based issues. SECC data would even regenerate healthy debate between two groups proposing - either 'caste-blind &class-based' or 'caste & class based' type of affirmative action. The best way to improve the quality of the debate is by providing individuals with the data to make informed choices in a democratic country. SECC data is crucial for making sound evidence-based plans, it helps us understand what justice is so that appropriate policy can be made for the Disadvantaged class/caste. 

Why Government Schemes Fail? - 2

India's new prime minister, Narendra Modi's slogan "minimum government, maximum governance" is a serious goal. Its implementation on the grass root level will be tried and tested, and that is where most of the government’s schemes fail. There are myriad of difficulties faced by the government in properly designing and implementing of the public policy. Continuing from the previous article: 'Why Government Schemes Fail?', I will examine same question from another angles.

Design: Let us start with the design of the government schemes. What works well in the coastal belt of Kerala is unlikely to work in the Terai region of Uttar Pradesh, or for that matter, hilly lands of Garhwal. Hence, one size fits all schemes must be carefully reviewed. There is a strong tendency for planners to go in for prestige and grand projects. Through this they can leave monuments to their activity, even if defunct. The visibility is major emphasis than actual proposed work. It helps every level of government machinery to justify their budget and performance.

Most of the schemes even if redesigned are just shadows of past failed schemes. Reforms exclusively based on experience of the past suffer from another infirmity as it fails to factor in the innovations and transformations of the relevant sector. Any government scheme should be designed as a business model with incentives built for each stakeholder. Illegality in transaction slowly crumbles the scheme merely from the fact that the policy was not right from the beginning.

Involvement and Access: More democracy is required in making designs for the schemes! Currently, the only option left with people is of protest on bad implementation of schemes. There must be welcome and feel comfortable atmosphere for non-IAS experts with domain expertise to operate in regulatory bodies and government-run organisations. Advisers from the NGO sector like CRHP, Pradan had helped in shaping better schemes in the past.

Our huge ignorance to understand the functioning of the government and the local institutions is barrier to good governance. There is need for proper channel so that people can mobilize for effective political action to prevent mismanagement of resources by government. A small time broker and politician help poor to navigate a system that gives them so little access. Hence, the complex web of subsidy, entitlements and schemes in a very well intention-ed and well designed scheme hit the rock solid wall of the gargantuan system.

Political Interference: Government ministers announces huge scheme without having a concrete plan. It ends up similar to attempting to build a house without a blueprint. Political parties whenever come to power in central/state governments try to adopt developmental plans to suit their manifestos. This jeopardizes the future trajectory and intensity of implementation of schemes. The politically motivated decisions of fund allocation led by the relationship of the incumbent State and Central governments hinder welfare schemes and huge investments. Most of the time old developmental projects are either ignored or rejected in favour of new political discourse. There is always misalignment between financing of scheme, condition of economy and political campaign promises. This can go hugely wrong and ours current government current fight to hold Fiscal Deficit is one such glaring example. When a subsidy scheme becomes a non-viable financially, no matter how well-meaning, it must be restructured or abolished to extinction.

Planning and Coordination: Planning is done in ad-hoc manner and is generally a mere collection of schemes. This is an under-discussed problem of coordination between the intra- and inter- government departments. The right word is Convergence. Each scheme is being implemented by the respective department in isolation. Hence, it is imperative to make directed and organized efforts for converging such schemes. Convergence improves the deliver-ability of the benefits and services, it also gives better value to the public money. The Perpetuating Problem of Coordination will explain intrinsic details of the issue. The lack of reliable data for planning also causes failure of policies. With many of our allocations in schemes based on unreliable secondary data. There is dire need for collecting relevant data pertinent to all sectors, updating it periodically and planning and allocating financial and human resources based on this data. A new type of public good, Open data banks must be promoted among public, among companies and other non-government entities. With the availability of massive, publicly-held data sets in machine-readable “liquid” form can unlock the potential to spur innovation in all sectors.

Regulating and Implementation: How do you prevent abuse? The old mindset in which the command and control instinct dominated with emphasis to restrict, stifle, manipulate, control and micro-manage with new rule curb both private and public sector.A rule of thumb for efficiency standards is that they should be 'tough' but not panic inducing'. Time and space is needed to react with new initiatives.  There is heavy scrutiny of projects in implementation when problem arises due to poor design. The problem of implementation without clearly defined or sometimes ill-defined rules creates a lot of room for manipulation and hence make it inconsistent and unfair.

If you want to understand how the government functions, you must understand movement of files. All decisions in the government are taken on files through office orders. If projects/ schemes are not moving on file, then all public policy is waste. No person in bureaucracy want to take a decision without any political support and risk career damage. It eventually led to stalled projects and failure of the scheme.

Budgeting and Auditing: Why Development is considered in Terms of Expenditure Done? I am still looking for answers. Nobody is looking for the quality in government and this task has been left to the social audit. The delay in releasing funds and issuing UC (Utilization certificate) deter all the stakeholders involved in the scheme. There is always difference between fund requirement and allotment in budget. Even unimaginative funds required are just 10% increment of previous year budget. Take any scheme in government, the usual discussion in meetings revolves around Target Chase. There is a new idea floating to move away from the usual bureaucratic jargon of “targeting numbers” to “targeting names".

90 per cent of the government is now covered by the CAG, but much of this has been done through executive orders, not an amendment in our act. All PPPs, Panchayati raj institutions and NGOs getting government funding under need to be brought under the ambit of CAG. Due to no expertise on this topic, I will refrain from putting more words on the blogpost.

We are seeing that NRHM, NREGA & NRLM are delivering better result than government departments. Mission mode is working relatively well in the new order of scheme design. Accountability mechanisms and examples of government schemes that worked are quite low in our country. We need solid discussion on reports to understanding of the policies, scope, mechanisms, drivers and benefits of various schemes across different states and sectors. Everything has an expiry date, no matter how good their past performances. There is logic for having a provision to discard schemes once their utility is over. All programmes need strong monitoring, which is absent most of the times. A separate blog post is entirely needed to showcase the problem of monitoring and evaluation. That is a another story for another time.

Another Poverty Line

“By means of deep meditation and magical power it may be possible to sleep on fire, but it is impossible to sleep with an empty stomach in a situation of poverty.” - Thiruvalluvar (50 B.C.)

New poverty line has been redrawn by Rangarajan Committee. It is Rs 32 for rural India and Rs 47 for urban India. The earlier poverty line figure was Rs 27 for rural India and Rs 33 for Urban India.  Columnist T N Ninan has given us glimpse on the approach taken for defining poverty line - "The Rangarajan committee, set up two years ago to take a fresh look at poverty issues, has according to a newspaper report recommended a radically new way of deciding who is officially poor. New in India, that is, because the approach that the committee has reportedly recommended is already in practice in the US and Europe: poverty is defined, not as an absolute level of income, but relative to the average levels of income. The US says all those whose income is 40 per cent or less than the average (median, not mean) are poor; Europe is more generous, and puts the cut-off at 60 per cent of the median income."

The findings of the Rangarajan panel report on poverty estimates states that three out of 10 people in India are poor. 30% are poor but who are they? They are not uniform and homogeneous group as projected by media. Even those who are just above poverty line may fall below this due to vulnerable situations. I assume that new holy trilogy of social security {National Pension System (NPS), National Rural Livelihoods Mission (NRLM) and Food Security Bill} can provide safety net to many. Proper estimation, identification and targeting of poor for schemes are the real challenges in getting schemes implemented properly in our country

 Commenting on the poverty line will be like muddling on the pile of deadwood. I came to conclusion now that everyone believes what they want to. So depending on one's ideology, poverty in India has reduced or increased. Statistics can only be a tool for managers or policymakers. Perceptions, Meaning and Utility are the reality checks used by consumers and voters. Even in ours democracy, extreme poverty is not much relevant to the median voter belonging to middle class now. That is the state of affairs.

The cascading effect of increase in prices of petroleum products on inflation and a high fiscal deficit is a matter of serious concern. Upcoming budget must have tough measures to deal with forecasting of poor monsoon and high prices of petroleum due to Iraq war. I hope to see end of Subsidy Raj in Modi led central government and there are talks of abolishing planning commission. To what extent the government will be able to undertake reforms will depend on how far the NDA is willing to go.

PRI Capacity Building & Training

The 73rd and 74th Constitutional Amendments ushered in the Panchayati Raj in India. Panchayati Raj Institution(PRI) is a three-tier system in the state with elected bodies at the village, block, and district levels. The rural mathematics of the vote in the Panchayat election has become highly political in nature due to the channeling of government scheme funds through the PRI. There are voices emerging on corruption at this basic level. Budget expenditure for Panchayat elections runs in lakhs for no other reason. Many gram pradhans are becoming powerful by grabbing resources meant for the welfare of the people whom they represent. In my opinion, PRI has embarked on one thing for sure, i.e., decentralized benefits of corruption. Looking on the positive side, infrastructure development and money are returning to the village economy through this arrangement. PRI has brought more of a sense of local governance to rural India.

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” - Lord Acton, English historian and moralist of the 19th century.

“All power corrupts, but some must govern.” - John le Carre, British ex-intelligence officer and novelist of the 20th century.y

Gram Panchayat is getting involved in planning, nd execution, and monitoring of the various public schemes. There is a lot of funding available at the local level with the decentralization of power through PRI. A barely educated Gram Pradhan is dealing with huge amounts of money under social security schemes, namely MGNREGS, BRGF, TFC, SFC, Indira Awas Yojna, etc. PRI representatives are not professionals, but the only voices of the people. Management takes money and people. With such an amount of cash flow, processes can't be left on the shoulders of either overburdened representatives or volunteers in the committees. It is more necessary to invest in human resources with knowledge and raise the amount of operational expenses (salary). A Nayab Sarpanch gets less than a thousand rupees per month as an honorarium in Odisha. How can such a person give full attention to the responsibilities?

The idea of a managed transition of power in Panchayati Raj is still a delusion unless leaders of the community emerge by breaking conservative, male-supporting, social structures. Most of the elected representatives of PRIs are illiterate and semi-literate. They have negligible knowledge about PRIs and no operational skills required for local governance. Capacity building and training (CB&T), particularly in an ongoing process that focuses on creating new leaders, especially women, and knowledge transfer at the grassroots level of democracy

I have attended a few training sessions in conference halls given to PRI members. Most of the training focuses largely on content and has a minimal focus on the mode of delivery. Lectures/PowerPoint presentation mode of training is theoretically sound, but may not be absorbed well by an audience with a bare minimum literacy amid rural backgrounds. Research has demonstrated that adults learn six to seven times more through practice and feedback than through lectures, yet far too many capacity-building programs consist of classroom sessions or self-study modules. I don't have backing on any conclusive study, but exposure visits and study tours conducted have more recipients in rural India.

There is a growing focus on the development of a two-tier cadre of resource persons, i.e., the master resource persons and district/ block resource persons. Most of the states provide short-duration inputs (5-15 days) with the help of State Institutes of Rural Development (SIRD). Training sessions in government workshops have created a pool of trainers, but the quality is lacking in the human resources. There is no long-term systematic strategy employed by the government. The lack of a strong monitoring and evaluation system for training doesn't help in assessing the impact of such training. The effective establishment of PRIs as a strong node for local governance remains a distant reality until these gaps are filled properly. Organizations (NROs) such as Tripti(Odisha), SERP (AP), Jeevika (Bihar), and Kudumbashree (Kerala) are slowly grooming the leaders through Livelihood Mission who have sufficient knowledge of PRI & various other schemes.

Kaushik Basu (in October 2013): "Overall economic growth is important, but the poor should not have to wait until its benefits trickle down to them; with the right anti-poverty policies, governments can encourage trickle-up growth as well." Building public institutions is a slow process, with frequent regression, but over time, PRI will become a strong, inclusive, and democratic institution in the spirit of the constitutional amendment. Progress is a painstaking task, and we have a long way to go!

Why Government Schemes Fail?

All claims of the development by the government appear to be a hoax ...obviously ! Because we always see huge margin of difference between announcement and implementation. Let us redefine government for our own understanding. It is a crucible of interest groups, rather than a black box of noble intentions. So, the responsibility of failure of schemes lie with various stakeholders in the development process.

Growth can never be inorganic and the system needs to learn before they grow. Now replace the system’ with a ‘welfare scheme’. Example: Gradual improvement (IRDP - SGSY - NRLM) is better approach for development. Not all schemes are so much lucky. They are renamed and often termed as 'old wine in new bottle'. Sometimes if any scheme is a completely prone to the corruption, we have hinged for its immense benefit to power holders. Bad schemes is like giving perpetual gifts that has made people into beggars rather than partners. India's government programmes are riddled with corruption and leakage. The main source of corruption arises from the identification of beneficiaries. Identification is not a statistical exercise, but is a major political activity. Nitin Pai has written an article focusing on this issue only - Where are the Poor?.

Rajiv Gandhi’s famous and oft-quoted statement that out of every Rs 1 spent on development only 15 paisa reaches the poor. Monitoring and Evaluation is often the weakest part of the chain of the schemes. Officials are getting salary for what they are supposed to serving the people. They get away clean either with not doing anything at all or doing with bribes. This is the most damaging aspect of the government jobs. Even harsh reviews and suspension does not mean anything to them.

Unused knowledge is a buried treasure. Government officials at block levels have brilliant expertise but they rarely display an ounce of integrity. The block level officials and extension workers are inadequately available and most of the posts were vacant. So, the staff is always overburdened by additional charges. None of govt official will talk openly of their exasperation with the stiff deadlines. But off the record, most are forthcoming. And, their feedback is rarely taken serious. There is also lack of specialization at the top level of bureaucracy. Same officer can look sports affairs with equal expertise as livelihood ! Such is the way of functioning government. This system has began to change positively from the last 10-15 years with the incoming flux of new officers. 

The reformers calling for heads of government servants and public representatives are not free from all blame. I will not give detail here in the corrupt practices of NGO sector but will take a dig on activist mode workers. Most of the activist are either committed right Swadeshi or a leftist social workers . They are staunch and passionate persons who are anti-globalization, anti- market and assumed that all decisions however big or small had to be taken in GramSabhas and will turn up invariably the right ones. Hence, not all feasible solutions are put on table and negotiation becomes ideological battleground.

Poor can not be served poorly; Government must stop thinking that PRI as low-cost and voluntary. People’s Participation for Empowerment and Good Governance may sound like a jargon in the reading but it is not. It is a simple process of taking voice of an important stakeholder i.e. public. There will be corruption in the early years, but surely spread of awareness will happen in upcoming years.

The hunger and poverty that one sees all around must be tackled with better designed scheme. Structural transformations at the top to allow local actors to participate with their potential is required. We must focus on convergence of existing schemes of the government rather than launching new schemes. Only then, we can roll back redundant schemes and put in their what is required. Even we got a new scheme. "The Implementation Part" is key to measure any success of intervention rather than allocation of fund. I will leave readers with quote by Pratap Bhanu Mehta, president, Centre for Policy Research, Delhi in his article "The contractor state": The government of India is a government of contractors, by contractors, for contractors.

Government Schemes and Development Programmes

Livelihoods Initiative at CMF has complied a list of government schemes that focus on livelihoods promotion, broken down by state that is updated by latest August 2013. I am updating here name of schemes implemented in Odisha.

Social Security

• Antyodaya Anna Yojana (AAY)
• Annapurna Scheme
• Anganwadi Karyakartri Bima Yojana
• Emergency Feeding Programme
• State Old Age Pension (SOAP) Scheme
• National Social Assistance Programme for Social Security Pensions
• National Old Age Pension Scheme
• National Family Benefit Scheme
• Balika Samriddhi Yojana (BSY)
• Jana Seva Divas - Streamlining of the process of Pension Payment
• Programme for Care of Older Persons
• Day care Centre
• Prevention of Alcoholism and Substance (Drugs) Abuse.
• Scheme for Welfare of Orphan and Destitute Children
• Orissa Disability Pension (ODP) Scheme

Welfare

• Rehabilitation of distressed women
• Balika Samridhi Yojana
• State commission for Women
• MVSN
• An Integrated programme for Street Children
• Training & Rehabilitation of Persons with Disability
• National Programme for Rehabilitation of Persons with Disabilities (NPRPD)
• "Preservation and Promotion of Tribal Dialects, Culture & Livelihood"
• Special Programmes for KBK(Kalahandi-Bolangir-Koraput) Districts
• Multi Sector Development Programme(MSDP)
• Multi Sector Development Programme(MSDP)
• Backward Region Grant Fund (BRGF)
• Gopabandhu Grameen Yojana

Health

• Janani Express
• The Integrated Child Development Services (ICDS)
• Scheme of Awards to Angawadi Worker
• Kishori Shakti Yojana
• National Nutrition Mission
• RevisedNational Tuberculosis Control Programme (RNTCP)
• National Leprosy Elimination Programme (NLEP)
• Iodine Deficiency Disorder Control Programme (IDDCP)
• National Vector Borne Disease Control Programme (NVBDCP)
• National Programme for Control of Blindness (NPCB)
• Integrated Disease Surveillance Programme (IDSP)
• Immunisation Programme
• Reproductive Child Health
• National Rural Health Mission (NRHM)
• Infant Mortality Rate Mission
• Navajyoti

Livelihoods Promotion

• UDISHA - The National ICDS Training Programme
• Women's Empowerment Programme - Mission Shakti
• Swayamsiddha
• Support to Training and Employment Programme for Women (STEP)
• Women's Economic Programme (WEP) - Swablamban (NORAD)
• Swadhar
• Supply of Special Aids & Appliances
• Training Centres for Teachers for Students with Disability:
• "Orissa Tribal Empowerment and Livelihoods Programme (OTELP) (EAP)"
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
• National Rural Livelihoods Mission (NRLM)

Education

• Midday Meal Scheme
• Special Schools for children with disability:
• Construction of 1000 new Girls Hostels

Decentralisation - Chronology of Attempts and Committee Reports

The details of the history of attempts to promote decentralized planning from the first plan onwards to the mid-eighties is summarized in the table below:

Why Decentralization?

The main problem of centralized governance is lack of knowledge about local circumstances due to the geographical distance. It also creates psychological distance of government officials from citizens of the remote part. Best case in favor of decentralizing government is that it creates the inclusive institutions. Autonomy for local population to have a voice in government for decision making enables development. But, Political decentralization has no meaning if there is no fiscal decentralization.

Taking from the blog post written long back - As Oates (1993) explained, "the basic economic case for fiscal decentralization is the enhancement of economic efficiency: the provision of local outputs that are differentiated according to local tastes and circumstances results in higher levels of social welfare than centrally determined and more uniform levels of outputs across all jurisdictions.Although this proposition has been developed mainly in a static context (see my treatment of the "Decentralization Theorem,' 1972), the thrust of the argument should also have some validity in a dynamic setting of economic growth." Fiscal Experts have also concluded that decentralized government poses a threat to the macroeconomic stability and is incompatible with prudent fiscal management. (See Prud’homme, 1995; Tanzi, 1996). Among the fiscal experts a broad consensus has been arrived in the context of Musgrave’s trilogy of public functions, namely, allocation, redistribution, and stabilization, that the function of allocation can be assigned to lower level of governments, the other two would be more appropriate for the national government. Therefore, the macroeconomic management, particularly stabilization policy largely consider as clearly a central function (Musgrave, 1983; Oates 1972). [OP Vohra : Fiscal decentralization and devolution of financial resource]

Governance and Accountability: A to Z

This Governance and Accountability (GAC) is taken directly from the PPT of world bank team.

A: Awareness on GAC - Good project management is promoted by adopted governance and accountability. However one needs to generate awareness on GAC .

B: Benchmarking - The benchmarking on what can be delivered has to be done with due consultations with stakeholder who would deliver the service.

C: Capacity Building - A training module needs to be developed which empowers the entire project staff and participating institutions at all level with basic activities under GAC, tools to be used under GAC.

D: Deterrence - A clear cut policy which includes measures for prevention, detection and punitive action needs to be defined.

D: Documentation - Documentation of procured assets, field processes, accounts, book keeping etc. are integral part of GAC.

E: Effective Service Delivery - The deviation against the benchmarks have to be captured regarding the service delivery.

F: Focal Point for GAC - It would be necessary to identify a focal point for GAC at each level right from State, district, block and community.

F: Feedback System - An effective feedback system has to be evolved in the project. Community Score card is one such feedback tool.

G: Grievance Redress System - GRS will include complete redress mechanism, which can be used by community members also to report on any form process deviation , corruption and complain.

H: Human Resource Policy - Human Resource Policy and Codes of Conduct needs to be defined.

H: Help desk - Help Desks are necessary to provide help / information to stakeholders.

I: ICT - ICT will serve the backend support for improving governance and accountability.

J: Joint efforts - The GAC initiatives have spread across multiple sectors and verticals hence all efforts have to be jointly done by the project staff at the respective levels.

K: Knowledge Management - Knowledge Management helps in learning , sharing and thus necessary for better governance.

L: Learning - Doing by learning is necessary for GAC by a gradual learning-by doing approach.

M: Monitoring for GAC - Monitoring systems have to be in place good governance.

N: Non–Negotiable - Project non–negotiable are key to GAC.

O: Operational guidelines - It would require operational guidelines to be prepared and disseminated at all levels for the staff and community institutions to understand the entire gamut of GAC.

P: Process Audit - Process assessment can become a participatory method to understand the processes adopted at the community level.

P: Public Disclosures - Public Disclosure will be ensured with desired frequency, medium and responsible units.

Q: Quality Control - Quality control is necessary for improved service delivery.

R: Right to Information - RTI emphasizes on complying with provisions on suo-motto disclosure of information under RTI Act, 2005, rather than limiting to only on-demand access to information.

S: Sanction Policy - Clear sanction policy for fraud, corruption, and other malpractices needs to be outlined. Reporting cases from the field and mandatory checks needs to be institutionalized.

T: Transparency - Transparency will have to be ensured strictly at the procurement, financial and project implementation level.

U: User Report Card - The user report card can be done annually or at a regular frequency to capture the feedback from the SHG members through a survey or group discussion method on service delivery in the livelihood project.

V: Verification mechanism - A foolproof verification mechanism has to be developed under GAC for verifying key risk areas like social inclusion, adherence to non negotiable, transparency in project etc. and to identify the loopholes.

W: Window for GAC - A window for GAC concept has to be promoted to provide insight into the practices and innovations in GAC.

X: Xtra Ordinary efforts - Governance and accountability requires an Xtra Ordinary effort.

Y: Yes to GAC - Governance and Accountability is mandatory part of the project and cannot be termed as extracurricular activity, hence each stakeholder has to fall in the line of saying Yes to GAC.

Z: Zeal for GAC - Taking up measures related to governance and accountability requires a Zeal for GAC, amongst the project decision makers and management.