Daily Current Affairs : 26-December-2024

India has seen a significant rise in welfare schemes, particularly those involving direct cash transfers. These initiatives aim to alleviate poverty, empower marginalized groups, and boost economic independence, especially among women. However, there are growing concerns about their sustainability and long-term impact on development. In this essay, we explore the rise of benefit schemes, the types of welfare, their impact on society, and the challenges they present.

Rise in Benefit Schemes: 2024 Examples

In 2024, several state governments launched or expanded direct cash transfer schemes aimed at supporting women and enhancing their economic security:

  • Mukhyamantri Mahila Samman Yojana (Delhi): ₹2,100 monthly cash transfer to women to support their economic independence.
  • Kalaignar Magalir Urimai Thogai (Tamil Nadu): ₹1,000 monthly aid for women to strengthen household financial security.
  • Ladli Behna Yojana (Madhya Pradesh): ₹1,250 cash aid for women, contributing to the ruling party’s electoral success.
  • Gruha Lakshmi Scheme (Karnataka): ₹2,000 monthly cash transfer aimed at empowering women.
  • Ladki Bahin Scheme (Maharashtra): Financial support for women to ensure their socio-economic empowerment.
What Are Welfare Schemes?

Welfare schemes in India can be broadly categorized into different types:

  • Monetary Welfare: Direct cash transfers like pensions, unemployment benefits, and aid for women (e.g., PM-KISAN).
  • Developmental Welfare: Initiatives focused on education (Sarva Shiksha Abhiyan), healthcare (Ayushman Bharat), and food security (Public Distribution System).
  • Employment Schemes: Programs like MGNREGA provide job opportunities in rural areas.
  • Subsidy-Based Welfare: These include subsidies on fertilizers, LPG, and electricity to ease financial burdens.
  • Social Infrastructure Support: Investments in health, education, housing, and digital infrastructure.
Consequences of Monetary Welfare on Indian Society

Positive Impacts:

  • Women Empowerment: Direct cash transfers give women economic independence and decision-making power in a traditionally patriarchal society.
  • Poverty Alleviation: These schemes help vulnerable populations meet basic needs, thereby reducing poverty levels.
  • Improved Education and Health: Cash support improves nutrition, school attendance, and health outcomes, especially for children.

Negative Impacts:

  • Dependence on State Aid: A potential side effect is that people may become overly reliant on government support, rather than focusing on self-sustained development.
  • Electoral Incentives: Politicians might use such schemes as electoral tools, focusing on short-term populist measures instead of long-term growth policies.
Limitations of Cash Transfer Welfare

While direct cash transfers offer immediate relief, they have several limitations:

  • Inflationary Pressure: Cash transfers can contribute to inflation if not paired with productivity improvements in the economy.
  • Exclusion Errors: Due to administrative inefficiencies, deserving individuals may miss out on benefits.
  • Limited Long-Term Impact: These transfers do not address the root causes of issues like unemployment, skill gaps, or economic disparity.
  • Fiscal Stress: The growing reliance on cash transfers strains public finances, diverting resources away from long-term capital projects and infrastructure.
  • Political Misuse: These schemes are often used for political gains, undermining sustainable development goals.
Way Ahead

To ensure that welfare schemes contribute to India’s long-term development, a more balanced approach is necessary:

  • Focus on Skill Development: Prioritizing education and skill-building programs will help create a self-reliant workforce, reducing dependency on welfare.
  • Targeted Welfare: Implementing more focused and researched aid will help avoid misuse and inefficiency, ensuring benefits reach the right people.
  • Enhance Infrastructure: Investments in healthcare, education, and digital infrastructure will provide lasting improvements to society.
  • Public Awareness: Citizens should be educated about the fiscal impacts and limitations of unsustainable welfare programs.
  • Strengthen Monitoring Mechanisms: The use of technology and transparent systems can help track welfare distribution, ensuring that benefits reach the intended recipients.
Important Points:
  • Rise in Benefit Schemes (2024):
    • Mukhyamantri Mahila Samman Yojana (Delhi): ₹2,100 monthly cash transfer to women for economic independence.
    • Kalaignar Magalir Urimai Thogai (Tamil Nadu): ₹1,000 monthly aid for women to strengthen financial security.
    • Ladli Behna Yojana (Madhya Pradesh): ₹1,250 cash aid, contributing to electoral success.
    • Gruha Lakshmi Scheme (Karnataka): ₹2,000 monthly cash transfer for women’s empowerment.
    • Ladki Bahin Scheme (Maharashtra): Financial support for women’s socio-economic empowerment.
  • Types of Welfare Schemes:
    • Monetary Welfare: Cash transfers like pensions, unemployment benefits, and aid for women (e.g., PM-KISAN).
    • Developmental Welfare: Focus on education, healthcare (Ayushman Bharat), and food security (PDS).
    • Employment Schemes: Job opportunities through programs like MGNREGA.
    • Subsidy-Based Welfare: Fertilizer, LPG, and electricity subsidies.
    • Social Infrastructure Support: Investments in health, education, housing, and digital access.
  • Positive Impacts on Society:
    • Women Empowerment: Cash transfers provide economic independence and decision-making power.
    • Poverty Alleviation: Helps vulnerable populations meet basic needs, reducing poverty.
    • Improved Education and Health: Better nutrition, school attendance, and health outcomes, especially for children.
  • Negative Consequences:
    • Dependence on State Aid: Over-reliance on government support may hinder self-sustained development.
    • Electoral Incentives: Welfare schemes can be used for short-term political gains, diverting focus from long-term growth.
  • Limitations of Cash Transfers:
    • Inflationary Pressure: Can lead to inflation without boosting productivity.
    • Exclusion Errors: Administrative inefficiencies can exclude deserving beneficiaries.
    • Limited Long-Term Impact: Cash transfers don’t address root causes like unemployment or skill gaps.
    • Fiscal Stress: Over-reliance on welfare can drain public finances, limiting funds for long-term projects.
    • Political Misuse: Cash transfers can be misused for electoral purposes, diluting sustainable development.
  • Way Forward:
    • Focus on Skill Development: Prioritize education and skill-building for self-reliant individuals.
    • Targeted Welfare: Implement more focused, research-driven aid to reduce misuse.
    • Enhance Infrastructure: Invest in long-term social infrastructure like healthcare, education, and digital access.
    • Public Awareness: Educate citizens about the fiscal impacts of unsustainable welfare schemes.
    • Strengthen Monitoring: Use technology and transparent systems to track and monitor welfare distribution.
Why In News

Welfare schemes and direct cash transfers have become central to India’s socio-political landscape, playing a crucial role in poverty alleviation and social empowerment; however, they also raise significant concerns about fiscal sustainability, potential inflationary pressures, and their long-term impact on economic development.

MCQs about Welfare Schemes and Direct Cash Transfers in India
  1. Which of the following welfare schemes provides ₹2,100 monthly cash transfers to women in Delhi?
    A. Kalaignar Magalir Urimai Thogai
    B. Ladki Bahin Scheme
    C. Mukhyamantri Mahila Samman Yojana
    D. Gruha Lakshmi Scheme
    Correct Answer: C. Mukhyamantri Mahila Samman Yojana
    Explanation: The **Mukhyamantri Mahila Samman Yojana** in Delhi offers ₹2,100 monthly cash transfers to women to support their economic independence.
  2. What is a key limitation of direct cash transfer welfare schemes in India?
    A. They create permanent job opportunities.
    B. They can lead to inflation without improving productivity.
    C. They always reach the most vulnerable populations.
    D. They directly address unemployment issues.
    Correct Answer: B. They can lead to inflation without improving productivity.
    Explanation: One of the concerns with direct cash transfers is that they can contribute to inflation if not accompanied by productivity growth, as the increased demand may not be matched by a corresponding increase in supply.
  3. Which of the following welfare initiatives focuses on providing job opportunities in rural areas?
    A. Ayushman Bharat
    B. MGNREGA
    C. PM-KISAN
    D. Sarva Shiksha Abhiyan
    Correct Answer: B. MGNREGA
    Explanation: The **MGNREGA** (Mahatma Gandhi National Rural Employment Guarantee Act) provides job opportunities in rural areas, aiming to alleviate rural poverty through guaranteed employment.
  4. What is a suggested way forward to improve the effectiveness of welfare schemes in India?
    A. Focus solely on providing cash transfers
    B. Invest in long-term infrastructure and skills development
    C. Increase cash transfer amounts without monitoring
    D. Shift all welfare responsibility to the private sector
    Correct Answer: B. Invest in long-term infrastructure and skills development
    Explanation: A more effective approach to welfare in India involves focusing on **education and skill development** to help individuals become self-reliant, along with investing in long-term infrastructure such as healthcare and education.

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