New study flags dismantling of India’s rights-based welfare state

India’s rights-based welfare architecture, painstakingly built over two decades through legal guarantees to work, food, and education, has undergone a systemic legislative and budgetary rollback over the last decade. In its place, a discretionary model of "New Welfarism"—characterized by centralized cash transfers, digital gatekeeping, and diminished state accountability—has been institutionalized, driven primarily by electoral calculations rather than administrative reform.

These are the central findings of a comprehensive new volume, "Realising Rights: A Handbook of Welfare in India," published by the Centre for the Study of the Indian Economy (CSIE) at Azim Premji University. The handbook -- running into 464 pages -- provides a granular, data-driven autopsy of India’s social safety net, documenting how universal legal entitlements are being replaced by digitized, conditional schemes that systematically shift the burden of proving eligibility onto India's most vulnerable citizens.

The Transformation of Rural Employment and Social Safety Nets

The most significant development recorded in the handbook is the quiet death of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in December 2025. Once the bedrock of rural economic security, the universal legal right to demand work has been repealed and replaced by the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Act (VB-GRAM G). The new law fundamentally alters the legal contract between the citizen and the state by converting an uncapped, legally enforceable demand-based entitlement into a discretionary programme. 

Under VB-GRAM G, public works are restricted exclusively to geographic areas that the central government explicitly chooses to notify, and funding is constrained by predetermined, state-wise budgetary allocations. Furthermore, the Centre has altered the cost-sharing ratio from 90:10 to 60:40, severely straining state exchequers and pushing a heavier financial burden onto local governments. 

The Act also introduces a mandatory 60-day freeze on work during peak agricultural seasons, a provision the handbook notes will disproportionately harm landless labourers and women who rely on public works when agricultural wages stabilize. Additionally, middlemen and contractors, strictly banned under MGNREGA to prevent labour exploitation, have been reintroduced under the guise of convergence arrangements.

This legislative shift is accompanied by rigid technology mandates. VB-GRAM G legally enforces biometric attendance verification at worksites despite internal admissions from the Ministry of Rural Development that biometric systems routinely fail manual labourers whose fingerprints have worn down from physical labour. 

A parallel fiscal retreat is documented across older social assistance programmes and marginalized sectors. The National Social Assistance Programme (NSAP), which provides old-age, widow, and disability pensions, has faced a severe real-terms budget squeeze. While its allocation rose steadily from ₹2,392 crore in 2007–08 to a peak of ₹10,618 crore in 2014–15, it has flatlined at an average of roughly ₹9,500 crore annually through 2025–26, representing a massive cut after adjusting for inflation. Concurrently, NSAP’s share of the total Union budget plummeted from 0.57 percent to just 0.19 percent over this period. 

Similarly, the Ministry of Minority Affairs has seen its budgetary share decline sharply since 2017. The Maulana Azad National Fellowship for minority PhD and MPhil students was abruptly discontinued in 2022, and funding for the Maulana Azad Education Foundation collapsed from ₹90 crore in 2020–21 to a nominal ₹1 lakh in 2022–23, culminating in its unpublicized closure in February 2024. 

The volume links this budgetary starvation to a wider socio-political pattern affecting Muslim citizens, citing targeted mosque and property demolitions, the Citizenship Amendment Act, the Waqf Amendment Bill, and a disproportionate targeting of Muslims in the ongoing deletion of names from electoral rolls.

Weaponizing the Digital State: Algorithmic Exclusion and Food Security

A central thesis running through the handbook focuses on how the digital state uses technology not as an efficiency tool, but as a mechanism of exclusion. Access to basic survival infrastructure is now entirely conditional on the technical correctness of an Aadhaar record rather than physical presence or demonstrated eligibility, threading a child's birth, scholarships, health IDs, land records, and pensions through a single vulnerable identifier system. This feeds into what the authors call the Rashomon Effect of Data, where bureaucrats rely on top-down dashboard metrics to construct narratives of efficiency while ignoring ground realities. 

For example, when the government justified large-scale ration card cancellations by claiming they eliminated ghost beneficiaries, an independent J-PAL study later revealed that 88 percent of the cancelled cards belonged to genuine, eligible households.

This digital architecture successfully shifts accountability away from officials and onto citizens. When biometric or database linkages fail, officials are insulated from blame by labeling errors as technical glitches in the backend process, leaving heavily pregnant women or marginalized farmers to travel repeatedly to distant Aadhaar centres to fix minor name mismatches without ever receiving an official explanation. 

The handbook highlights a November 2025 directive where the Telecom Ministry privately ordered smartphone manufacturers to preload devices with the invasive Sanchar Saathi app, which granted access to cameras, messages, and calls, before walking it back after public outcry. It also flags Rule 23 of the Digital Personal Data Protection Act, 2023, which empowers the state to demand personal data from digital platforms without individual consent. 

The human cost of this digital gatekeeping is starkly evident in India's food security apparatus. The handbook highlights a parliamentary admission that 2.49 crore ration cards were deleted between 2020 and 2025 during digitisation drives, with no disaggregated data provided for the reasons. The Right to Food Campaign has independently documented over 25 starvation deaths since 2016 directly caused by Aadhaar authentication failures and subsequent card cancellations. 

Crucially, the handbook draws a direct line between welfare datafication and the Election Commission’s ongoing Special Intensive Revision of electoral rolls. Both systems, the authors argue, operate on the same underlying logic of forcing citizens to continuously re-prove existing legal entitlements—to food, work, or the vote—within opaque, centrally controlled digital ecosystems that disproportionately drop vulnerable populations, including Muslims, from the registers.

The Chronic Underfunding of Foundational Human Infrastructure

The handbook underlines that India’s foundational social sectors continue to operate in a state of chronic fiscal deprivation, far below national and global benchmarks. While the World Health Organisation recommends public health spending at 5 to 6 percent of GDP, and India’s own National Health Policies commit to a minimum of 2.5 percent, actual spending remains stagnant at 1.8 percent of GDP. Consequently, out-of-pocket expenditure accounted for a staggering 60 percent of all Indian health spending in 2023, representing one of the highest financial burdens on households among comparable global economies. 

Government infrastructure data from March 2023 underscores a stark rural deficit, revealing a 22 percent shortage in rural sub-centres, a 30 percent shortage in primary health centres (PHCs), and a 36 percent shortage in community health centres (CHCs). Quality is equally compromised, as over 52,000 rural sub-centres and 1,900 PHCs operate out of rented spaces, 3.8 percent of rural PHCs lack electricity entirely, and 72.6 percent have no computer access. Urban PHCs face a parallel 36.7 percent shortfall.

The handbook delivers a scathing evaluation of the flagship Ayushman Bharat insurance scheme, calling it a chimera of financial protection. It notes that nearly 75 percent of total claim value flows directly to private hospitals, even though underfunded public hospitals continue to absorb the vast majority of complex critical care. Multiple studies show that cashless insurance schemes have failed to reduce out-of-pocket costs for poor patients. While states like West Bengal, through its Swasthya Sathi scheme, and Haryana have stepped in by diverting significant portions of their local budgets to insurance, the handbook warns that this spending increasingly substitutes for, rather than supplements, the direct provisioning of public clinics and hospitals.

Public expenditure on education has similarly languished, fluctuating between 3.5 percent and 4.5 percent of GDP since the early 1990s and failing the 6 percent target originally set by the Kothari Commission in 1968. When the Right to Education (RTE) Act passed in 2009, it notably lacked a financial memorandum to back its legal mandates. 

More recently, the Union government has deprioritized foundational school infrastructure; between 2019–20 and 2025–26, the budgetary share of Samagra Shiksha—the core umbrella scheme for school infrastructure, learning materials, and teacher training—dropped from 62 percent to 51 percent within the Department of School Education and Literacy's budget. Furthermore, implementation of RTE Section 12(1)(c), which reserves 25 percent of private school seats for disadvantaged children, has faced structural roadblocks that function as a form of quiet exclusion.

Documented Implementation and Funding Gaps across States

Chhattisgarh: Only 20% of the poorest households knew about the reservation; only 9% had the internet access required to complete the mandatory online application. |

Delhi: Under previous offline systems, nearly 95% of eligible children failed to secure admission due to administrative barriers. 

Large States: Karnataka, Telangana, Punjab, Haryana, Assam, West Bengal, and Jharkhand have yet to implement the provision without diluted, weak notifications. |

Union to State Delays: Delayed Central reimbursements led to crisis; in 2022, nearly 1,300 schools in Maharashtra boycotted the RTE admission cycle over ₹700 crore in unpaid dues. 

Early childhood development programmes show an identical trajectory of fiscal retreat. Following the Fourteenth Finance Commission’s devolution of untied funds to states, the Union government's share of nutrition costs within the Integrated Child Development Services (ICDS)—renamed Saksham Anganwadi—fell from 60 percent to 41 percent by 2021–22. 

This reduction occurred despite NITI Aayog's explicit warning that food unit costs needed to rise by 28 percent between 2017 and 2022 due to inflation. Instead, the central supplementary nutrition norms have remained completely frozen since 2017 at ₹8 per child per day for standard cases and ₹12 per day for severely malnourished children, falling far short of NITI Aayog's recommended adjustments of ₹10 and ₹15 respectively.

Meanwhile, the country's anganwadi workers, who manage this entire nutrition frontline, remain classified as volunteers rather than employees after 50 years of the programme's existence, paid a basic central honorarium of ₹4,500 a month which sits well below legal minimum wages. Despite this meager pay, they are now required to operate smartphone applications like the Poshan Tracker, log real-time growth metrics, and execute eKYC facial recognition checks alongside their 15 core childcare and healthcare duties. 

The handbook concludes that this digital push has severely backfired, as slow rural internet connectivity, low digital literacy, and rigid eKYC barriers mean severe child malnutrition is simply being under-recorded. Rather than eradicating malnutrition, the digital state is effectively invisibilising the incidence of malnutrition, threatening documented historical gains that prove children with early ICDS exposure complete 0.1 to 0.3 additional years of schooling as adults and girls grow to be at least 1 centimeter taller.

The Political Logic of New Welfarism

The handbook traces these diverse sector rollbacks to a single, overarching political strategy. In their introductory framing chapters, the volume's editors argue that the transition from universal institutional rights to direct cash transfers is fundamentally political rather than administrative. 

Targeted cash transfers, deployed via digital pathways, are heavily favored by the central government over long-term capital investments in schools, clinics, and legal employment guarantees because cash schemes generate electoral returns more readily than slow-building institutional reforms. 

By timing these cash transfers to act as electoral planks immediately prior to state and national elections, the state transforms what were once legally enforceable rights into acts of discretionary state benevolence, fundamentally weakening the democratic contract between the citizen and the Indian state.

Note Dipa Sinha and Rajendran Narayanan, part of the editorial team which has prepared the voluminous handbook, "The Union government currently implements 324 direct bank transfer (DBT) schemes across fifty-six ministries. Such schemes, particularly unconditional cash transfers in the name of women, have now made an entry into state programmes. About seventeen states currently have such a transfer programme, with many political parties promising some form of cash transfer during election campaigns."