The Techno-Patrimonial Welfare State

The success of the Bharatiya Janata Party (BJP) over the last decade of Indian politics, and its frontrunner status in this year’s parliamentary elections, has often been attributed to its welfare policies. The rise of Direct Benefit Transfers (DBT)—whereby beneficiaries can receive transfers from over 500 government welfare schemes directly into their bank accounts—has been crucial in this regard. Over the past decade of BJP rule, the amount paid through DBTs increased over twenty-five-fold, from 60 billion INR (approximately $718.8 million) to 2.1 trillion INR (approximately $25.1 billion), reaching over 1 billion registered beneficiaries as of September 2023, according to data released by the Ministry of Finance. The rapid expansion of DBTs was facilitated by several advances in technology: the increased availability of affordable mobile phones and internet plans in India, especially after the launch of Reliance Jio in 2016; the rise of Aadhaar, the government’s biometric identification program that offered the first all-purpose ID in the country; and the establishment of Pradhan Mantri Jan Dhan Yojana, the government’s financial inclusion program announced by Prime Minister Modi in 2014, which has been responsible for opening over 500 million new bank accounts for largely unbanked Indian citizens.  

How does this “new welfarism” differ from the rights-based approach that preceded it under the Congress-led governments of the 2000s? And how does the political narrative underpinning this shift attempt to reimagine Indian democracy? Yamini Aiyar, public policy scholar and former president of the Centre for Policy Research, calls this model of social policy the “techno-patrimonial state,” supported by the creation of a new “labharthi varg,” or a beneficiary class, that can be politically mobilized. 

In the following interview, Rohan Venkat speaks to Aiyar about social-democratic notions of welfare, the “freebies” discourse in Indian social policy, and the implications of the “techno-patrimonial state” for the BJP’s electoral success at the local and national level. This interview first appeared in India in Transition, a publication of the Center for the Advanced Study of India at the University of Pennsylvania as part of an ongoing series around the 2024 elections. It has been edited for length and clarity. 

An interview with Yamini Aiyar

Rohan Venkat: What questions oriented your examination of India’s new welfarism?

Yamini Aiyar: The questions I asked were rooted in my own career as a public policy researcher, which, by some coincidence, began in the early 2000s when India first began to build out its welfare state. That effort emerged largely out of a constellation of social movements, organized civil society, the judiciary, and elite interests coming together to build what we have since called the rights-based welfare architecture. This began with the Right to Information and the National Rural Employment Guarantee (NREGA), the Right to Work, the Right to Education, and the National Food Security Act in 2013. I cut my teeth working closely with social movements, studying the unfolding of these programs, particularly the effort, largely led by social movements, to draw on the grammar of rights to pry open spaces for citizens to participate in direct claim-making.

Why did we need to articulate welfare in this framework of socioeconomic rights? Across Western Europe, many robust welfare states emerged through progressive redistributive social policy without this rights-based framework. India was clearly doing something different, and I wanted to better understand that difference. I saw the good, bad, and ugly of this early effort. I also saw the emergence of technology, as a tool in the welfare narrative, taking hold in 2009–10 when the Aadhaar project embedded itself into the mainstream.

After 2014, the political establishment changed. In an early speech to Parliament, Prime Minister Modi called the NREGA—which guaranteed at least 100 days of wage employment to rural households—a monument to poverty. This is often understood in partisan political terms, but there was also a fairly substantive change in the framing of welfare. The whole rights discourse was replaced by a discourse on accountability as direct citizen claim-making. Technology made cash transfers a real possibility. I was an observer and an occasional participant in the very robust debate that took place between 2010 and 2014, particularly in the run-up to the legislation of the National Food Security Act on this question of cash transfers. The debate hinged on two critical issues—efficiency of delivery, since cash transfers could potentially cut through the layers of incompetence and corruption of the state, and the role of markets in enabling access to basic services. 

The rights approach took a normative position on the centrality of the public sector in delivering basic services. It also saw rights as a means of deepening citizen capacity to place claims on the state and extract accountability. By contrast, the cash transfer debate saw efficiency of direct delivery and the role of markets as the key to accountability. The two views had a very different imagination of the terms of the social contract. This was before Universal Basic Income (UBI) became a policy buzzword. By 2016–17, JAM (Pradhan Mantri Jan-Dhan Yojana, Aadhaar, Mobile) and UBI made their way into the welfare discourse, transforming the contours of the debate.

By 2017–18, fueled by the rapid scale of Aadhaar, cash transfers were a reality, and the term “Direct Benefit Transfers” (DBT) was installed in the vocabulary of India’s welfare state. In trying to understand these developments, I felt the need to reframe the terms of the public debate on welfare—an old problem in the Indian public sphere. Our discourse on welfare very quickly reduces itself to the question of populism; in the old days, what we used to call populism, populist social policy, freebies. Now the new term being used is “revdi”—sweets. 

Rv: What is the “techno-patrimonial welfare state”?

YA: My argument is that we’ve abandoned the idea of welfare as core to the social contract, and we’ve abandoned the idea of welfare as evolving within a normative framework of rights. Using what technology can offer in terms of direct benefit transfers, welfare is being reframed as a gift offered by the party leader rather than as a fundamental right that ought to frame the terms of the social contract between citizens and state.

In this new framework, citizens are passive recipients of government benevolence, offered with the direct patronage of the political party leader. Welfare, in these terms, becomes about the patronage and charisma of the leader rather than a moral obligation of the state and an articulation of citizenship within a framework of rights.

Rv: You connect this to the idea of the compensatory state that’s been put forward by the economist Rathin Roy.

YA: In a 2022 speech, Modi claimed that the youth of India should be aware of this new “revdi politics.” This brought back the old debates around freebies vs. merit-based subsidies, tradeoffs between growth vs. welfare, that economists and development professionals have indulged in for many decades. In fact, when the NREGA was being debated, some had argued that it was equivalent to a helicopter drop of cash into the hands of the rural elite, a freebie as opposed to a sensible policy for social inclusion and welfare on the part of government.

There has been a flurry of writing about what is and isn’t a revdi, and what should be the nature of government social policy. As I started engaging with these questions, I began to recognize that the debate on welfare and the associated policy response can in fact be traced to two very distinct but interconnected disillusionments with the social, economic, and institutional context in India.

The first disillusionment relates to the nature of the Indian economy. Since 1991, Indian growth and the associated dynamics of India’s structural transformation have pushed us in the direction of jobless growth. Back in 2004, against the backdrop of “India Shining” and the electoral victory of what eventually became the Congress-led coalition of the United Progressive Alliance (UPA), this question of jobless growth was at the center of the political discourse. The Congress party went to the elections with the phrase “inclusive growth.” Inclusive growth was politically powerful because the economy was growing but not producing enough jobs for the demographic dividend that we were about to reach. That was the logic for why the NREGA, or the Right to Work, became so essential and politically potent. This reality has not just continued, but it has been exacerbated over the course of our growth history. 

Amit Basole has a really important paper that looks at this. He argues that in the trajectory of our structural transformation, the moment in which people were pulled out of agriculture and into the non-farm economy was largely shaped through a movement into the informal construction sector, where jobs are informal and precarious, rather than into low-scale manufacturing, as was the case globally. Given the unusual nature of our structural transformation, we have always been plagued by the question of job creation for the youth.¹ The honest truth is that the Indian state and its economic policy has simply failed to tackle high youth unemployment; politicians are not unaware of this—even if they don’t want to always admit it in the public discourse. 

As Rathin Roy has so evocatively argued, welfare has emerged as a “compensation” for these failures. This is the compensatory state. In analyzing the contours of the compensatory state, I found several distinctive features about India’s peculiar path to welfarism. India’s welfare state hasn’t developed in the traditional social-democratic model of a negotiated bargain between labor and capital. Nor has it developed along the lines of the conservative American welfare regime that sought to offer meager means-tested benefits, but was really committed to the idea of full employment. Intriguingly, it isn’t even like the productivist welfare regimes of East Asia that seriously invested in core human capital health and education with the explicit goal of mobilizing the productive capability of the labor force to participate in economic growth.

Our welfare state is evolving very much according to a logic that is almost designed as a bargain—a Faustian bargain—for failing to build an economy that can provide full employment. Its core approach is to use fiscal policy as a means of transferring public finances to citizens as compensation via cash and in-kind transfers. It’s not about offering protection to labor or strengthening labor’s bargaining power. It’s not about enhancing productivist capability. 

Just think about some of the more recent cash transfer programs that different political parties, including the BJP and the Congress, have launched. Youth unemployment cash transfers, cash transfer to particular kinds of skills, PM Kisan—a cash transfer to our farmers. This is the compensation that the state has to offer because, in a country as unequal as India, in a country where the poor are your primary voters, no matter how capital-friendly a political party is, it cannot go to the polls without engaging with the lived realities of the vast majority of Indians. That’s the beauty of democracy, with all its attendant challenges.

The second disillusionment has a lot to do with the Indian state, which is where the technology comes in. We all know that the Indian state is incompetent, corrupt, and apathetic. These failures have circumscribed the elite discourse on welfare. Several years ago, I co-authored a paper with Lant Pritchett titled “Taxes: The Price of Civilization or Tribute to the Leviathan?” Against the backdrop of an incompetent state, the bargain of taxes that society strikes—the willingness to be coerced into paying the state on the expectation that the state provides a set of public services that would improve my productive capability—simply doesn’t hold. This is a fair conclusion on the part of the taxpayer. But we must recognize the consequences of this reality, for it has circumscribed the nature of the public discourse on taxation, delinking progressive taxation and redistribution. Progressive taxation has historically played a huge role in building a more equitable society and a more equitable and functional welfare state.

The debate on cash transfers in India finds its origins in the notion that our public systems just don’t work. Any excessive investment in public systems is the equivalent of tribute to the Leviathan rather than a price of civilization. What technology allows you to do is bypass this extractive incompetent state and deliver whatever minimally you have to deliver to the citizen. It overemphasizes the possibilities of the market because the state has simply failed.

In some senses, this is where the legitimacy for the project of India’s digital public infrastructure, for the project of Aadhaar, finds its roots. We don’t ask questions about the limits of technology because we’ve all mobilized ourselves around the possibility that technology will allow you to bypass this failed state. On the basis of the legitimacy of technology, you build a welfare system that does not invest into the public system. One of the consequences of that, I would argue, is we are valorizing the possibilities of efficiency over the messy realities of democracy, which are about negotiating, bargaining, and responding to competing claim-making—realities that require strong, robust public systems at the grassroots to cohere.

Rv: You highlight a contradiction in this new model: it is moving away from entitlements and rights to be based more on duty, but at the same time it’s sold as more aspirational and “progressive.” How does this narrative—where people are given cash, rather than public or merit goods, and bypassing many layers of the state—come across as aspirational, instead of as a dole from the government? 

YA: It is very much couched in aspirational terms, and it uses the vocabulary of progress. Viksit Bharat, “Aspirational Bharat,” talks about the ease of living. It very interestingly positions the present cash transfer-based model of welfare as empowerment in contrast with the welfare of the past, which it frames as the welfare of entitlement. The prime minister in different speeches has spoken about empowerment as a process of fighting poverty on your own strength, where you as a citizen have a set of duties to use the opportunities that are being offered to you with a degree of responsibility.

For example, in the seventy-fifth Independence Day speech, he speaks about how the government has made efforts to provide twenty-four hours of electricity. It is the duty of the citizen to use it responsibly. In a similar way, the home minister has offered a distinct definition of empowerment, saying “we have provided gas connections, we have provided toilets, etc.” It is now the responsibility of citizens to use these opportunities to upgrade their lives. This is what we define as empowerment. But this framework is silent about the obligation of the state to provide these basic core public services to rights-bearing citizens. Citizens are being reframed as responsible and dutiful rather than active rights-bearing claimants of welfare.

This articulation of empowerment differs substantially from the rights-based model of welfare, which deployed the grammar of rights to empower citizens to place claims on the state. This is very important in the Indian context. From our founding moment, the articulation of political rights has been much fuller than the articulation of socioeconomic rights, which were placed within the directive principles. Welfare was framed as charity offered on the patronage of what the government can do, as opposed to a core right that the state is obligated to offer to its citizens. The Indian state, after all, was not referred to as the “mai baap sarkar” (parental state) for nothing.

The UPA-era rights movement was trying to upend that. Its failure to do so with any teeth perhaps had a lot to do with incompetence of the Indian state. The tantalizing opportunities of technology moved us away from that aspiration of rights-based welfare very quickly. We hear a lot about the duties of the citizen as a consequence of the efforts of the government in improving their ease of living, but there is no language for recognizing that citizens have certain basic rights, and it is the state’s obligation to deliver a minimum standard of public services to all citizens. That’s the distinction.

Rv: You mention that although this new model is strongly identified with the BJP and Modi, it’s not limited to them. We see echoes in other parties looking at welfarism, as well as many echoes in the past. You mention Jayalalithaa, former Chief Minister of Tamil Nadu, in your piece. I wanted to get a sense of this as an Indian phenomenon, rather than just a BJP one.

YA: Even the so-called freebie politics of Tamil Nadu were framed within a broader vocabulary of rights and dignity. Even the handing out of the sari and the giving out of the television, which epitomized Tamil Nadu politics—both the Dravida Munnetra Kazhagam and All India Anna Dravida Munnetra Kazhagam indulged in this competitive welfare over many decades—was embedded in this vocabulary of rights, dignity, and justice. But what I find distinctive about this current moment of cash transfer-based techno-patrimonialism is that actually it is stripped of any language of rights and dignity. It’s about a set of handouts that the state can offer to beneficiaries.

Second, this moment has the distinct ability to deploy technology that didn’t exist as effectively and efficiently in the past. The cash transfer mode allows you to bypass all the intermediaries, both the political as well as the bureaucratic intermediaries of the state. Its political salience is really significant because it draws a direct connection between the leadership and the beneficiary.

Now, of course, popular leaders of regional parties and others in the past—Jayalalithaa epitomizes this, but Indira Gandhi too—had this direct connection between leadership and the voter. But the ability to bypass the intermediaries is new. Giving credit political attribution becomes much more direct in this sense. Louise Tillin, Neelanjan Sircar, and I have all made this argument drawing on Lokniti data. You can see this direct attribution changing over time between the days of the UPA, where state governments and state chief ministers were able to receive far more credit attribution, as opposed to the present context, where much of the direct attribution is going to the party leadership, cutting out the intermediaries and the state government, if you look at the BJP as one example.

The third thing that is unique and different about this moment is the kind of political mobilization around the category of beneficiary, the “labharthi.” The “labharthi varg” (beneficiary class) has emerged in the political lexicon as a category of political mobilization. Political leaders can cut through the intermediaries to forge a direct, emotive relationship with the individual voter in a way that effectively undermines collective interest-based claim-making, claim-making that relies on caste or religion-based mobilization. Instead, it creates a very neutral social base of beneficiaries around which mobilization can take place. It is politically a useful tool. For instance, it allows the BJP to reject criticisms of discrimination against religious minorities and Muslims by pointing to the distribution of benefits across the population. It’s a clever and effective tool to undercut the traditional strategies of electoral mobilization around collective interest-based claim-making on state resources. I think this is what makes it so powerful. It also deepens the direct relationship forged between the party leadership and the individual voter, allowing for that loyalty to become what Neelanjan Sircar calls “vishwas politics,” the base on which voters are mobilized and political parties are able to strengthen their hold.

Rv: How have people responded to the idea of the “techno-patrimonial welfare state”? 

YA: This is very much a work in progress, and I’m trying to grapple not only with the contemporary political moment, but also what the evolution of India’s welfare state tells us about the terms of the social contract, as well as about the nature of our democracy. Right now, we can only cite claims of efficiency. We don’t know because we don’t have good data. In the old days, there were a lot of evaluations that laid bare the good, bad, and ugly of government schemes. There is a paucity of good evaluations today, so we don’t have a good sense of what is happening on the ground.

Some may say: “Shouldn’t we be satisfied with the fact that benefits are reaching people?” And to that, my response is, are we really risking our democracy by marveling at the ability of the state to deliver some cash into some people’s bank accounts? Is that all that we are expecting the state to do? What is our social contract? Are we looking to build a society that is fundamentally about values of equality that build solidarities across communities, that recognizes the importance of investing in all of us? Or are we a society that’s just going to bask in the glory of this very limited achievement?

No country in the world has been able to become an economic powerhouse without serious public investment in core public and merit goods that the state is obligated to provide its citizens, like education and health. It’s almost like we have given up, and we’ve legitimized this surrender by saying, “At least this is working, and this is a big step forward in building state capacity.” I’m really trying to provoke us to think harder about this.

My critique isn’t that we should not be doing this. My critique is that we should really understand what its larger political economy consequences are, and we should push back against the urge to depoliticize the distributional struggle in a country as unequal and divided as India today.

Rv: How are you thinking about this argument in regards to the 2024 election?

YA: This is a good time to better understand the relationship between these kinds of welfare schemes and voter behavior and perspectives. What does the state at the grassroots look like in the present moment? As I mentioned earlier, one of the most critical shifts that have taken place by virtue of this technology-oriented cash transfer welfare system is that it has resulted in degrees of disintermediation of the local state. Who or what is the local state in the present moment? How do citizens engage with the local state with this technology-leviathan that is being built up, and what is it doing to sites of deliberation, dialogue, and collective action at the grassroots?

These were always fairly weak in India, and the reality of our local government system—which was meant to have an embedded structure of Gram Sabhas as sites of dialogue and deliberation at the grassroots—never really entrenched itself except in a few states, Kerala being the most visible example. But now that those investments have become even more diminished, and the role of local governments is changing, we need to better understand the dynamics of these spaces to determine the emerging terms within which state-society relations are being framed at the cutting edge. We don’t have enough empirical work on that. To me, that would be the basis of understanding how accountability systems are being built, the architecture of the state, and both of these elements together, what contribution they are making to the nature of our democracy.