Social protection : Challenges and Solution

There are hundreds of social security schemes in India, from housing to food, from maternity benefit and child welfare to old age support. Many of them are funded at very low level that limits their effectiveness. While their performance vary across the states it is broadly believe many of these schemes are infected with problems that limit their impact.

Problems with Social Security Schemes.

First, there is a problem of eligibility. Often one should not be getting a benefit gets it (inclusion error) while who should be getting did not get (exclusion error)

Second, there is a problems of leakage, wastage, corruption in the delievey process.

third, even if the implement process is faultless that is free from above given problems it would consume a lot administrative resources and manpower for other duties to be performed by the administration.

Fourth, some of the schemes involve subsidies which distort the allocation of resource. For example subsidies for water and electricity arguably causes environmental damage ( falling of underground water tables, power blackout). Moreover they benefit relative better off people than they benefit poor since poor consume less of the relevant good and services. For example power subsidies benefit those who have electricity connection and among those who consume very high electricity.

Steps to improve the social security schemes.

Reduce the number of schemes drastically to a manageable number, all of which are aimed at most important risk. However removing any schemes no matter how inefficientive it is will hurt some vulnerable groups so there should be a proper plan for compensation for people while caring out social reform .

The should focus on ensuring that citizen choice is at the center of social protection schemes. For example families should be given an option whether they want food ration or cash or direct benefit transfer.

In general, thrust should be given on moving to uniform and universal transfer as much as possible. Cash transfer reduces administrative cost, corruption and other various distortion which there in case of in kind transfer.

Any new basic income schemes whether targeted at a specific group like farmer or more generally to poor people must provide sufficient income and the entitlement should be linked to inflation so that it goes up as price increases.


Social protection should improve from current state and it increase huge administrative cost, facilitate huge corruption and have not significantly improve the standard of living of poor and vulnerable society. It is important because huge percentage of Indian depend upon some sort of social protection schemes.