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Reasons why technology cannot ‘transform’ India’s fight against poverty


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In a widely shared NYT column Transforming the fight against poverty in India, Siddharth George (Doctoral candidate at Harvard) and Arvind Subramanian (Chief Economic Advisor, Ministry of Finance in India) make a compelling, if technocratic, argument to back their optimism that the seamless integration of technology solutions (the JAM trinity – financial inclusion through Jan Dhan Yojna, biometric identify through Aadhar, and widespread mobile phone penetration) will ‘transform’ the fight against poverty in India, writes Suvojit Chattophadhay.

My point is that this optimism is largely misplaced as it is not founded on the political reality on the ground. The ‘JAM trinity’ will not ‘transform’ the welfare state because – one, it will not eliminate the human element of our administrators (politicians and the bureaucracy), which at the moment ranges from being benevolent to capricious to outright predatory; and two, tech-smartness is no substitute for better policy design.

One area that the JAM trinity is supposed to address is the targeting of subsidies. This is clearly very important, but only in an eco-system where progressive and pro-poor welfare schemes are designed and promoted by the government. The problem in India is two-pronged: one, the current government is dismantling welfare schemes one by one. For instance, the widely acclaimed wage guarantee programme has been attacked politically, and the implementation of the national food security scheme has been put on hold indefinitely. In a recent decision, the federal government while increasing the quantum of untied funds to state governments, has drastically reduced allocations to multiple welfare schemes in the areas of nutrition, agriculture, sanitation, etc, without supporting state governments with a roadmap for how to make up for these deficits. The second problem is that of mis-labelling, which is quite different from ‘ghost’ beneficiaries. Mislabelling of ‘above poverty line’ (APL) households as ‘below poverty line’ (BPL) and vice-versa is the result of a predatory system where the pay-offs from this sort of list manipulation are high. Neither Aadhaar’s unique identity number nor digital records can help once a family is declared ineligible to access a particular scheme. The discretionary human element is bound to come into play here.

Another anticipated benefit from the JAM trinity is a system where transfers reach the beneficiaries without fail. This may address concerns regarding timeliness and reliability of transfers, but not the gaping holes in our social security architecture. For instance, the JAM trinity might ensure the old and vulnerable get their pension on time. However, it will do nothing to fix an apathetic system that thinks Rs.200 per month is a dignified pension sum. Similarly, since the government is intent on choking schemes such as the rural jobs guarantee scheme, the much-awaited wage transfers will have little meaning.

The lesson here is simple—the underlying architecture of the governance system has a long way to go before it can claim itself to be just, progressive and pro-poor. And reforming the administration requires concrete steps that emphasise accountability. However, the political reality is that the current government has neither made any significant changes to how social policy is designed, nor in how it is administered.

On the whole therefore, while I buy the technocratic argument, it is hard to overlook the political intent and reality that pervades the governance system in India today. While the JAM trinity may yield some marginal improvements in delivery systems, it remains too early to call it anything close to ‘transformative’. Like much else from the current government, JAM too runs the risk of ending up as a stunt for public consumption, while the millions that actually need a functioning welfare state continue to wait for change.

The author blogs regularly at Suvojit Chattopadhyay: Opinions on Development and Politics.


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