In a major electoral strategy, Indian Prime Minister Narendra Modi is deploying a vast $400 billion welfare expenditure to secure a historic third term. The funds have been channeled into numerous initiatives aimed at alleviating poverty and improving the quality of life across India, touching the lives of over 900 million citizens.
Modi’s government, since its first term in 2014, has significantly broadened the scope of India’s welfare system, now including a wide range of services such as cooking gas, housing, electricity, and direct cash transfers through one of the world’s largest farmers’ support schemes. These initiatives utilize biometric identity cards to ensure that benefits directly reach the intended recipients, reducing corruption and administrative costs.
This approach, referred to by economist Arvind Subramanian as “New Welfarism,” contrasts with traditional welfare models seen in Western countries by focusing more on funding essential private goods over public services like primary education and healthcare. The Modi administration asserts that this strategy cuts across bureaucratic red tape and directly aids the poorest segments of the population.
Despite the impressive scale of these programs, the effectiveness and sustainability of such vast expenditures are subjects of debate. Critics argue that while these cash transfers provide short-term relief, they do not address long-term structural issues such as the need for better healthcare and education systems. Additionally, concerns about the financial burden of these programs on India’s public debt, which exceeds 80% of GDP, have been raised by the International Monetary Fund and various economists.
As Modi vies for re-election, the impact of his welfare policies on voter preferences remains to be fully seen. While these programs have increased his popularity, especially among women and rural voters, the role of welfare in electoral outcomes is complex, influenced by factors like caste, religion, and regional identity.
The coming months will reveal whether Modi’s substantial investment in welfare will be enough to overcome these challenges and secure his party’s position in the forthcoming general elections.