Updated: January 14, 2021 12:15:36 pm
Out of concern for its citizens, who were battling the uncertainties of the 1930s and the Second World War, the British government announced a committee to look into the state of social insurance in 1940. This committee, led by Sir William Beveridge, submitted its report in 1942.
The report, officially titled “Social Insurance and Allied Services”, came to be known as the “Beveridge Report” and formed the basis of the welfare state in Britain.
“Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world’s history is a time for revolutions, not for patching,” wrote Beveridge as he argued for a completely new blueprint for social policy in Britain.
In the report, Beveridge outlined “the five giants” or social evils that needed to be slain, in a manner of speaking.
“Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness,” he wrote.
Beveridge’s five giants then were: Want (deprivation or poverty), Disease (healthcare), Ignorance (inadequate education), Squalor (inadequate housing) and Idleness (unemployment or underemployment).
Acting on the report, post-war Britain saw a rapid growth of a new architecture of social policies that included nationalised healthcare in the form of National Health Service (NHS), free education, unemployment benefits, public housing (built by local councils) etc.
Of course, these moves received a setback with the rise of Margaret Thatcher in late 70s and through the 80s but we will come to that later.
The more important thing to note is the existence of the five giants in the Indian context.
Last week, the government released the First Advance Estimates of economic growth for the current year and it did not make a pretty picture as this analysis showed. This year, India’s per capita GDP, per capita private consumption and the level of investments in the economy — all will fall to levels last seen in 2016-17 or earlier.
It is also becoming clear that the economic pain has not been distributed equally across the population; the pandemic seems to have hurt those who are worse-off — be it the poor wage earner or small businessman — the most.
There is a growing body of data to suggest that Beveridge’s five giants are plaguing India more than ever.
The first phase results from the National Family Health Survey-5 are a case in point. India has suffered a shocking reversal of child malnutrition for children born between 2014 and 2019. This is alarming when one notes that India already had the largest number of malnourished kids in the world.
According to Beveridge, “ignorance is an evil weed which dictators may cultivate among their dupes, but which no democracy can afford among its citizens.” Repeated Annual Status of Education Reports (ASER) have shown how Indian students struggle to master basic skills — thus robbing them of the ability to participate effectively as an adult. School education has suffered across the board during the pandemic, especially for those on the wrong side of the digital divide.
The twin trends of falling labour force participation rate and persistently high levels of unemployment rate can seriously threaten to turn India’s demographic dividend into a demographic bomb. Unemployment has not only shot up in the recent years — from just over 2% at the start of the past decade to around 7% -9% in the last couple of years — but also become deeply entrenched whereby millions of India’s youth are too disheartened to even seek employment.
Then, among other things, the perilous state of migrants in 2020 brought home the abject state of housing in India, especially for the poor and vulnerable. That is not to say that the middle class has sorted its housing woes. India’s real estate sector is struggling from being a non-performing asset for the banking system while thousands of home-owners still wait helplessly for their promised home.
Lastly, and perhaps most fundamental of all problems, with per capita incomes plummeting, poverty can be expected to have risen sharply. From a policymaking perspective, it is nothing short of a travesty that India’s last formal data on poverty is now almost a decade old. But all the evidence points to poverty levels rising in the past few years and, in particular, in 2020.
In just three weeks, Finance Minister Nirmala Sitharaman will rise to present her third Union Budget. The Finance Minister has assured everyone that India can be an engine of global economic growth.
As we close in on Budget 2021-22, and in the immediate aftermath, it is natural that a lot of focus would be on the minutiae such the allocations percentages, tax benefits and deficit numbers etc.
But the bigger question is: Will the Budget lay down a clear plan to tackle the five giants?
Of course, slaying the five giants may not involve ramping up the welfare state. It can be argued, as the government is doing with the protesting farmers, that a greater play of free markets will ensure all-round prosperity. Others can disagree.
But at least there should be a plan of action for the economy in the Budget.
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