States contribute disproportionately more to welfare schemes
This article examines the fiscal burden of welfare schemes in India, highlighting that state governments are increasingly contributing a larger share of funding compared to the Union government. It analyzes the shift from rights-based welfare to cash transfers and the budgetary implications for various social sectors.
Why it matters
Understanding the fiscal distribution between central and state governments is crucial for evaluating the sustainability of India's social welfare infrastructure.
Government expenditure on welfare schemes, or social spending, remains intensely debated. While some critics call it a fiscal ‘burden’, others call it a fiscal ‘commitment’. In line with the constitutional imagination, several welfare schemes were turned into laws in the 2000s, creating a ‘rights-based’ welfare regime. Over the last decade, however, the emphasis has shifted away from rights towards cash transfers. A recent handbook of welfare in India called Realising Rights by the Centre for the Study of the Indian Economy, Azim Premji University, traces the history and budgetary implications of key central welfare programmes.
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