Analyzing Government of India’s (GoI’s) annual budget is a challenging endeavor due to tapestry of flavors associated most of which are usually ideologically inclined and thus attracts a multitude of appreciation and flak simultaneously. Indian Budget 2010 pertains to social and financial inclusion of poor with a tinge of reforms.

Continuing the Vision:

• The budget 2010 maintains continuity of GoI’s vision of “prudential reforms” oriented economic growth with social equity.
• It reinforces GoI’s hybrid approach towards economic growth and social development along with a perceptible mix of welfare economics and neo liberal proclivity.
• This is in addition to the policy support for good governance initiatives like UIDAI and Technology advisory group for unique projects (TAGUP).

Flavors of Welfare State and Neoliberal Proclivity:

The USP of budget is a clear cut limelight on aam aadmi, mazdoor and kisan by bringing socio-economic convergences like MGNREGA and RSBY, setting up of National social security fund (NSSF), and extension of swavalambhan initiative under new pension scheme (NPS) concomitant to Bharat Nirman and other infrastructure development initiatives.

The four pronged strategy for krishi aur kissan (agriculture&farmers) which has once again brought a special focus to increase in agricultural credit and interest subversion of 2 per cent a is continuity of past legacy of UPA . What is remarkably different this time is special focus on storage infrastructure and food processing, which could be a public policy response to sporadic food inflation cycles in the country. All this arrow towards the flavors of a welfare state.

On the other hand three major announcements in the budget which went off relatively twilight are financial sector legislative reforms, GoI’s intent to open food retail sector and shift towards nutrient based fertilizer policy for containment of subsidy in the long term. These announcements are in a way pointers to the colors of “reforms”.

Financial Inclusion:

• Anticipated area for the actors of financial inclusion from this budget was support to financial inclusion initiatives and new emerging models which the Finance Minister has not left completely untouched.
• Enhancements to the corpus of financial inclusion fund and financial inclusion technology fund along with Government’s intention to take banking facilities to all habitations with 2000 plus population by 2012 by use of appropriate technologies and business correspondent model is a welcome announcement.

Ye Dil Maange More:

“More is better than less”.

Being a voracious consumer of government policies and programs I wish more have been incorporated in the budget, at least the two specific points: One related to livelihoods and other to microfinance.
• Incentives for actors of livelihood promotion in demographically and socially challenging terrains and a special fund to provide impetus to it.

• Public support to branchless banking and microfinance channels in terms of complete duty free imports of hand held and other devices in the case of the former and public infrastructure sharing and financial support for the latter to take financial services to challenging geographies and thus spur local entrepreneurship in strife torn states like Jammu and Kashmir, NE states would have been a cheery at the top of sarkari cake.

I leave you here and welcome your comments on this piece.

FINO is one of the primary stakeholders involved in conceptualizing and designing biometric smart card based delivery system for health insurance services in India. Initially carried out as a pilot along with a leading private sector GIC in Manipal, Karnataka it was later on transformed into RASHTRIYA SWASTHYA BIMA YOJANA (RSBY).

The following are the highlights of the paper which is an overview of the implementation part and discusses how FINO has contributed in the whole process from design to implementation part of the scheme

1.0 HEALTH OF THE HEALTH IN INDIA
A healthy labour force is fuel for GDP of a country. In other words, health of both the financial and labour markets are positively correlated. In a country like India where 86 per cent of the total labour force exists in unorganized sector and contributes around 50 per cent to the national GDP (NCEUS Report,2008), health of labour force becomes a vital area of investment for private and public sector stakeholders. This becomes even more interesting when just around 2 per cent of the total population of India is covered by health insurance (Chandraseker Hemalatha, 2009) and public spending on healthcare is just 0.9 percent of the GDP. In this context, it is in the larger interest of the economy to invest in the labour health and well being.

2.0 FINO RESEARCH & DEVELOPMENT: UNLOCKING THE POTENTIAL OF HEALTH INSURANCE IN UNORGANISED SECTOR
It is estimated that round 4% of BPL population requires hospitalization every year and the cost per episode (at 1995-96 prices) was estimated at Rs. 2,100 (Ahuja, ICRIER 2004). The size of the sickness fund required was calculated around Rs. 2500 crore per annum for just 4 per cent of BPL population (Ahuja, ICRIER 2004). Health insurance market in India is estimated to be around Rs 5000Cr which covers around 2 per cent of the country’s population at present. FINO has brought a turnaround by unlocking the business potential around Rs 4500 Crore for health insurance companies and other stakeholders especially 37.5 crore BPL (100 per cent) members .

3.0 FINO’s CONTRIBUTION IN MAKING RSBY DIFFERENT FROM PREVIOUS GOVERNMENT SPONSORED HEALTH INSURANCE PROGRAMMES:

3.1 DESIGNING AND INITIAL ROLLOUT:
In the design phase, the standardization was considered to be the most challenging task, considering the scale of the programme and the number of players involved. By putting through the standardized platform - card design, Point-of-Sales (POS) machines, backend DBMS, the data maintenance format and the inter-operability of cards in network of hospitals across the country was made possible.

FINO contributed to the design and the technical specification for this project in a very short span of 4 months. This in turn made interoperability of cards feasible in the network of hospitals across country.
The card used for RSBY is designed in such a manner that it can be used as a multi application card i.e. the card is enough flexible to add on other services like PDS, or any other scheme if introduced later on. The Front end is designed for the enrollment process is such that it appears very simple and user friendly but a robust back end is maintained for claim management, customer service using which FINO provides asp services to insurance companies.

3.2 IMPLEMENTATION: RESULTS FROM HARYANA
The chart below is a comparison of BPL families covered in various states where more than six districts are covered under RSBY by different service providers. It is

interesting to note that the six districts of Harayana state where FINO fintech foundation was implementation partner has the highest percentage of beneficiary enrollment which highlights FINO’s technology and implementation capabilities.

4.0 Conclusion
The efficient implementation of the scheme has resulted in greater convenience and empowerment of the poor by providing them the choice of health service provider. The card is also an instrument of identification for the BPL poor. Already the RSBY health insurance scheme has made news in the Wall Street and Business World magazines. What remains to be seen is how many countries would emulate this unique service model.

You can download the full white paper from here.