Adequacy of Social Assistance Schemes during the COVID-19 Lockdown

Multiple social assistance schemes were launched during the first lockdown to help the poor in India, but not all eligible households took advantage of them. Studying slum households in Delhi to evaluate the efficacy of nine central and state government schemes show that the average gain was only `992 per household for a month. If all eligible households had received benefits, this figure would have been `1,956 per household, making the distribution much fairer. The schemes decreased the indebtedness of households by an average of 12.24%, but this would have been 24% if all eligible households had been covered.

This study was financed from contingency funds available under the NABARD Chair Professor scheme at the Institute of Economic Growth. The authors thank the Department of Economic Research and Analysis of the NABARD, Mumbai for financial assistance and Sanju Yadav for help in conducting the survey and providing research assistance.

Social assistance schemes are an integral part of the functioning of economies that aim to reduce poverty and inequality. An assessment of current social assistance provisions reveals that the expenditure on social protections has gone from an unweighted average of just under 4% of the gross domestic product (GDP) in 2003–05 in Asia and the Pacific to 5.3% in 2015 (Barrientos 2019). According to the World Bank (2018), developing countries in general spend 1.5% of their GDP on social assistance programmes every year.

Using the World Bank data set ASPIRE (Atlas of Social Protection Indicators of Resilience and Equity), which covers 123 developing and transitioning countries, Parekh and Bandiera (2020) found that social assistance programmes had reached 2.7 billion people and lifted 7% of them out of poverty. In Zambia, for instance, cash transfers have proved to have multiplier effects on the economy (Handa et al 2018). Historical evidence shows social protection programmes have been executed in many countries to fight hunger and poverty. There are proven cases of such programmes addressing chronic poverty and social inequality by enhancing the livelihoods of the poor (Alderman and Yemtsov 2012; Hidrobo et al 2018). Strategy 2030 of the Asian Development Bank acknowledges the role of social protection investments in contributing to inclusive growth (ADB 2018).