·The Hindu·15 marks·250–350 words

Distinguish between welfare entitlements and populist freebies in the context of rising State-funded cash transfers.

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In this answer
  1. Distinguishing welfare entitlements from freebies
  2. Applying the test to State-funded pensions
  3. Way forward

Article 41 directs the State to give public assistance in old age, sickness and disablement. States now pay for most of India's social pensions. Between 2017 and 2021, States and UTs put ₹1,09,573 crore into NSAP beneficiaries, compared with the Centre's ₹34,432 crore [1]. That makes it harder to tell a rights-based entitlement apart from a vote-driven freebie.

Distinguishing welfare entitlements from freebies

Basis Welfare entitlement Populist freebie
Constitutional link Comes from DPSP goals (Arts. 38, 41, 47) Weak or no link to a constitutional goal
Targeting Defined vulnerable groups (BPL elderly, widows, disabled) Untargeted, aimed at electorally important groups
Purpose A steady income floor that builds capability Short-term consumption
Design Rule-based, continuous, run through institutions Ad hoc, timed around elections
Fiscal Budgeted and sustainable Recurring cost that crowds out capital spending
Accountability Audits and beneficiary verification Driven by publicity

For example, NSAP (launched 1995, run by the Ministry of Rural Development) is a statutory-style entitlement for BPL households [2]. Pre-poll giveaways of consumer goods fail most of the tests above.

Applying the test to State-funded pensions

  • Entitlement in substance: Bihar transferred ₹1,237.48 crore through DBT at ₹1,100 a month to the elderly, widows and persons with disabilities [3]. These are targeted groups covered by Article 41.
  • Not extravagant: ₹1,100 is about the average old-age pension in many States once top-ups are added. States pay more mainly because the Centre's share (₹200/₹500) has not been revised for years [2].
  • Where it slips towards populism: the CAG found ineligible beneficiaries drawing pensions because existing names were not re-verified, and in many States pensions were not paid every month [1]. Heavily publicised transfers made by States that rely on central funds also add a recurring fiscal burden.

Way forward

  • Revise and index the central share to inflation so the cost is shared fairly.
  • Re-verify beneficiaries every year to reduce both inclusion and exclusion errors [1].
  • Disclose the cost of every transfer in the budget so legislatures can examine it.

A cash transfer counts as an entitlement when it serves a constitutional goal, reaches the right people and can be paid for. Social pensions meet the first test. They need accurate beneficiary lists and fair cost-sharing between the Centre and States to meet the other two, so that the DPSP vision and SDG 1.3 (social protection for all) are met.

Sources

  1. 1CAG Report No. 10 of 2023: Performance Audit of NSAP (Press Release)State vs central allocation in 2017–21; ineligible beneficiaries because names were not re-verified; pensions not paid monthly
  2. 2PIB: National Social Assistance Programme / Increase in Old Age PensionNSAP launched 1995 under the Ministry of Rural Development; IGNOAPS ₹200/₹500; State top-ups; average pension of about ₹1,100
  3. 3The Hindu: "Bihar CM transfers ₹1,237 cr. under State pension scheme" (11 Oct 2026)₹1,237.48 crore DBT at ₹1,100 to the elderly, widows and persons with disabilities

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