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A Cost-Benefit Analysis Can't Capture the Social Justice Aspect of Scholarships

In May 2021, the Institute of Economic Growth recommended that the government do away with scholarships for SC, ST girls. But was this the right conclusion?

In May 2021, the Institute of Economic Growth (IEG) released findings from a study on the efficacy of a scholarship to Scheduled Caste (SC) and Scheduled Tribe (ST) girls aimed at reducing dropout rates and child marriages. The report appeared to be a damning indictment of the poor implementation of the scheme and recommended scrapping the scheme entirely.

However, the report also attracted the ire of activists who claimed that instead of withdrawing the scheme altogether, the IEG should instead recommend measures to improve its implementation given the fact that child marriage rates are more than 40% in some states according to NFHS (National Family Health Survey).

According to an RTE policy brief from January 2021, 10 million girls in India are at the risk of dropping out of school and several media reports have already confirmed that children are dropping out in droves.

It is well documented in social science research that each year of secondary schooling decreases the likelihood of child marriage significantly. UNICEF has already warned that 10 million additional girls globally are at the risk of child marriage due to COVID-19. Moreover, in India, instances of child marriage have significantly increased in BiharMadhya Pradesh, Maharashtra, Tamil Nadu, Odisha, Karnataka, Uttar Pradesh and Telangana according to various reports.

Representational image for child marriage. Photo: Reuters.

A committee set up by the Ministry of Women and Child Welfare last year found that child marriage rates are highest among SC and ST girls. Moreover, the use of child marriages as a means to survive huge income and health shocks – like a pandemic – is also well known. The pandemic could potentially undo decades of progress in education and eradicating child marriages according to a UN report.

Therefore, it is shocking that the IEG has recommended withdrawing the scheme when it should be trying to improve its implementation.

A key fact to note here is that the IEG has not made the study or its methods publicly available. Thus, the fate of an important social justice scheme will likely be determined by a report shrouded in mystery.

Also read: COVID-19 Has Undone Years of Progress for Adolescent Girls

What do we know about the study?

According to the report in The Telegraph, the IEG studied the scheme’s impact in seven states and arrived at the following conclusions:

  • Both teachers and students are unaware of the scheme.
  • Parents face difficulties in obtaining caste certificates.
  • Schools find it difficult to upload data to an online portal.
  • The amount given is too small to bring an attitudinal change with respect to child marriages.
  • Students have to wait for two years to get the money, which is often delayed.
  • The scheme’s relevance has decreased because the prevalence of child marriages have fallen: We are not sure how IEG thinks that 5 million girls being married under 18 each year is a small number, which apparently accounts for a third of the global total and is the highest worldwide.
  • Similar state government schemes are more popular – though we are not told which schemes these are and if they are comparable in terms of budget and implementation, with this scheme.

Lack of transparency 

It is surprising that the results of a policy relevant study have not been made publicly available. We, at Bahujan Economists, could not access the report even after multiple attempts. The methodology and methods used in this report need to be made available to the public – particularly those for whom policies such as these are designed, as well as the broader research community.

Given the amount of scrutiny economic studies have to normally undergo before getting published, it is unusually convenient that IEG has decided to keep the report confidential. Without access to the report and methodology, the results are suspect due to a variety of reasons.

The results could also be influenced by a biased sample selection. The report does not disclose which states are included in the study. It is common knowledge that states like Kerala, Himachal Pradesh and Tamil Nadu fare much better in the delivery of public services while others like Bihar, Uttar Pradesh, and West Bengal – which is the only state we know is included in the study – do much worse than the national average.

Therefore, the states included in the IEG study could have influenced the outcomes they report. Moreover, while the study has only been conducted in seven states, the recommendation to withdraw the scheme has been made with a national application in mind.

It is hard to make sense of the hurried response by the Union government, which went ahead and slashed budgets allocated to this scheme last year without any consultation with either the community or experts on education policy. Our collective, Bahujan Economists, is therefore forced to take note of maligned intent on part of both the government and the researchers.

Also read: No Scholarship Money, No Laptop, No Hostel: LSR Student Dies By Suicide

The need for understanding the context, apart from technicalities 

IEG argues that the scheme is inefficient and the system cannot implement it properly. According to them, the costs do not seem to be justifying the benefits. However, IEG should remember that the amount spent on this scheme – Rs 110 crore until last year – is only about 0.006% of GDP at 2019-20 current prices.

In comparison, the cumulative amount of subsidies (concessions) given to corporates during 2014-19 was over 4.3 lakh crore, according to a report. The government, somehow, magically seems to discover money when needed for corporate subsidies, but is apparently unable to spend a minuscule fraction of the GDP for vulnerable children who are at the risk of dropping out of schools.

The cost ineffectiveness of welfare schemes is an argument that the critics of such programmes have voiced time and again be it for NREGA, PDS, mid-day meals, or the National Food Security Act.

However, researchers like Farzana Afridi and Desai et al have shown that not only have these schemes achieved massive gains in improving the lives of the most vulnerable, but they have also shown that the benefits from such programmes far outweigh their costs. Simply being cost-ineffective (if at all) is not enough to justify scrapping a scheme like this. Ensuring equity in education is a social justice issue and hence, the relevance of schemes such as this should not be determined solely through a cost-benefit analysis where the benefits are often vaguely defined.

School girls attend their classes at secondary school, Kaya, near Udaipur. Photo/Syed Altaf Ahmad/Unicef India/Flickr, CC BY 2.0

Moreover, critics often caution against the ability of the state to implement welfare schemes. According to them, rampant corruption, red-tapism and a corporate-political nexus hinder efficient implementation. However, as we have learned with experience, such schemes can and in fact are implemented effectively if there is sufficient demand for accountability from citizens.

Consider the case of Tamil Nadu. As Jean Dreze and Amartya Sen note in their book, India: An Uncertain Glory, official poverty estimates in Tamil Nadu in the 1970s and 1980s were higher than all India average. The state was also characterised by highly regressive social norms. However, the same period saw the initiation of a slew of bold social programmes, many of which later inspired national programmes. Tamil Nadu today ranks among the best in delivery of public services be it mid-day meals, NREGA or PDS. As a result, Tamil Nadu now stands right at the top when it comes to human development indicators.

If our experience of public policy at large in the last 10 to 15 years has taught us anything, then it is that the implementation of welfare programmes can be improved. Contrary to what the critics might have us believe, things are getting better – like the revival of PDS in various states, for instance.

Therefore, it is rather confusing as to why the IEG would not suggest measures for improving the implementation of the scheme and instead recommend scrapping the scheme altogether at such a critical juncture.

Remedial suggestions for the problems outlined by the IEG report 

We suggest that the state should undertake a large-scale advertising campaign to raise awareness about the scheme. Schools should also be instructed to inform pupils about the scheme. The application process should be simplified as much as possible to remove any administrative hurdles affecting scheme implementation.

We agree with IEG when it says that the scholarship sum of Rs 3,000 is too meagre to make a difference. We recommend that the government increase the sum to Rs 10,000 per student. The increased monetary budget would be too small a price to pay for the potential costs of having millions of girls drop out due to the absence of state support.

Furthermore, a grievance redressal mechanism should be set up to handle complaints and queries from students and parents as such mechanisms have proven to be extremely useful in improving accountability, transparency and service delivery of public services in the last decade or so.

Lastly, we suggest that the government should set up an inquiry to figure out the structural barriers like no access to schools, discrimination, lack of remedial classes or inadequate support, and lack of short-run gains on education that prevent SC, ST girls from accessing education. This issue requires a much larger intervention than a small scheme. Structural changes are needed and this scheme is only a small, albeit important, part of the solution.

Aarushi Kalra and Mohit Verma are with Bahujan Economists. Kalra is pursuing a PhD in Economics at Brown University, United States.