Beneficiaries of Social Schemes and Assessment By Mr. Rahul Kumar, DAG

Social programmes have evolved over the decades, aiming for increased coverage, higher entitlements, and better design by using technology for targeting and disbursal. More than 120 low- and middle-income countries run cash transfer programs, and more than 70 run social pension programs (non-contributory payments from state to an individual from retirement to death)². Therefore, a strategy for targeting social schemes is crucial in scheme design principles³.

Developed countries with formalized economies and better databases and registries can easily target interventions. However, in developing countries, with informal employment, unavailable/outdated social databases, it’s very cumbersome to have a good beneficiary information system.

India is following a targeted approach in implementation of schemes, especially involving cash transfers. There is minimal or less emphasis on universal entitlements and public services such as education and health. There is now a trend towards conditional cash transfers enabled by JAM Trinity (Jan Dhan-Aadhaar-Mobile), triangulating the respective technological breakthroughs. Efficient targeting has been a matter of concern for the policymakers in India. Proverbial acknowledgement of 85 percent leakage for every rupee allocated speaks of the design and implementation weakness of targeted schemes. Sophisticated studies from earstwhile Planning Commission⁴ and several Audit Reports of the CAG have shown widespread instances of Inclusion Errors (Ineligible people included) as well as Exclusion Errors (Eligible people excluded).

To tackle these issues, the Indian government has employed strategies like use of Socio-Economic Caste Census (SECC) data, Aadhaar integration, and community-based targeting.

As program evaluator and auditor, understanding the methods to effectively target interventions and assess their effectiveness and efficiency from the perspective of the government as well as beneficiaries is crucial.

A stylized model of a social scheme⁵ shown below follows life cycle approach where beneficiary enrollment is the most crucial part. With direct benefit transfers, the ground-truthing and vetting of beneficiary applications are paramount.

Poverty line was / is a useful eligibility criterion though there were issues with its inadequacy, lack of updates, and significant inclusion and exclusion errors. The multidimensionality of poverty has now been a crucial focus in social programs.⁶

The endeavor is to transcend from BPL to “programme-specific indicators for programme-specific entitlements”⁷ aligning with the focus on SECC and usage of Multi Dimensionality in estimates. Proxy Means Testing (PMT) is a hybrid method where proxy criteria like owning a brick house, motorized vehicle, livestock, are used for eligibility decisions in absence of reliable income and consumption data. Any choice of proxy criteria for income, has various crucial assumptions which should be kept in view while auditing or assessing the programme.

Generally, there is a correlation between asset classes or proxies and income levels, leading to Exclusion and Inclusion errors based on the chosen Poverty line and Proxies. In graph below⁸, the households generally lie on the 45-degree line between X axis (Income) and the Y ( Axis of Criteria) as they correlate .Any choice of Poverty line and Proxies for criteria lead to Exclusion and Inclusion.

This distribution can be analyzed for different schemes and criteria for the extent of targeting. For instance, for South Africa,⁹ the poorest decile (10%) of the households (leftmost of the X axis) have full coverage and any exclusions happen only near the poverty line indicating equitable scheme, and good nexus between criteria and the poverty distribution.

However, in Uzbekistan, the exclusion error for the lowest/poorest decile (10%) of the eligible population was 83% for the scheme and criteria, meaning the poorest faced exclusions. Moreover, there were high inclusion errors (most beneficiaries were ineligible).

So an audit can always check:

• Extent of Inclusion and Exclusion in Compliance audits.
• Correctness of the chosen eligibility criteria in Performance audits

A beneficiary identification system (below ¹⁰) involves strategies at each stage, from outreach to the intended population, intake of registrants, eligibility, and enrolling beneficiaries. Inclusion is crucial for effective and efficient delivery, and errors in any stage make the other components vulnerable. An external audit must devise criteria, data sources and methodologies for analyzing it. The primary focus is generally on the Beneficiary Survey, due to availability of the beneficiary database. However, a detailed analysis can consider the Exclusion and Inclusion errors.

There are primary sources of data for that are¹¹ :

Efficiency is also crucial, measured by the time or cost to deliver an output or outcome and whether those costs are reasonable. It should be evaluated from both the citizen and administration perspective. Ensuring reasonable cost for achieving outcomes, including minimal time and money costs for citizens and administrators through the delivery chain, is critical for performance evaluation. In India, the eligible poor weigh the opportunity cost of visiting administrative points and procedures against their lost daily wage earnings.

The various measures of efficiency and effectiveness can be assessed in:

• Processing time taken in various application stages (intended versus actual)
• Share of the intended beneficiary to registered (effectiveness of outreach)
• Share of vulnerable groups to beneficiary (Eg : % of poorest quintile/decile getting benefits)
• Grievances Redressed in the eligibility determining chain and time taken.

From the citizen perspective, efficiency is calculating the citizen’s time, costs, and no. of visits to complete the process through the time, costs, and visits (TCV) metric.

Effective targeting and delivery of social schemes require careful approach. Eligibility criteria, appropriate data sources, and assessment methodologies, enable the programs to reach the intended beneficiaries. Continuous monitoring and auditing of such systems are essential for understanding the assumptions in delivery system and promoting inclusive development.