Govt-sponsored schemes: Meant for poor, but beyond their reach

• Posted by Sindhuri G August 29, 2012 - Filed in Business - 2,190 views

  We have constructed a governmental welfare scheme which has been a machine for producing poor people. . . I'm not blaming the people. It's our fault for constructing so perverse and so ill-shaped a monster - Milton Friedman

  Meena Udhav Uchit, an elderly woman from Nagthana village in Washim District of Maharashtra, is miserable. Her husband is sweating it out as a bonded labourer, trying to pay off the Rs 16,000 debt accumulated to treat her son's brain fever. The irony is that this could have been avoided had she known that there's a government insurance scheme that protects her from such a financial disaster - but she didn't have a clue.
  
  Uchit is not alone; there are thousands of villagers who have no idea about the government's insurance schemes, especially designed for the poor. What's worse, they are even turned away by insurance companies and hospitals under some pretext or the other.
  
  "These schemes have been a drain on national resources so far," said Alka Parikh, consultant Uplift, a non-governmental organisation involved in the monitoring of micro insurance. "Government should spend the money on increasing the number of hospitals and raising awareness and not just rolling out such schemes."
  
  At present, there are 39 government-sponsored schemes including Rashtriya Swasthya Bima Yojana (RSBY), Aam Aadmi Bima Yojana, Janashree Bima Yojana, Shiksha Sahayog Yojana, Micro-Insurance Products, Varishtha Pension Bima Yojana, Universal Health Insurance Scheme, National Agricultural Insurance Scheme, Pilot Modified National Agricultural Insurance Scheme and Pilot Weather-based Crop Insurance Scheme.
  

  

  
  But even if 39 schemes sound pretty impressive, they are not so effective when it comes to the basics. And like many other government schemes, there are overlaps in these schemes, are without any clear mandate, and there's hardly any awareness among the beneficiaries.
  
  The most popular RSBY, a government-sponsored health insurance scheme for the poor, was started on April 1, 2008, and it provides cashless hospitalisation. So far, it has covered 25 states and enrolled 26 million families under it. Currently, 14 insurance companies are participating across the country.