Unfreezing unspent social special-purpose funds for the Covid-19 crisis: Critical reflections from India

In India, the government launched a US$22.6 billion financial support package for the poor and marginalized as a result of Covid-19. Approximately US$ 4.2 billion (INR 310 billion) came from a vast pile of unspent social special-purpose funds. How and why did such a large volume of funds accumulate in the first place, and why did it take a public health emergency to release them? What might be the consequences of their use under such emergency conditions – especially for our understanding of governance and accountability in social welfare provision? This paper presents a brief analysis of two preliminary case studies of specific social special-purpose funds in India. We rely on a handful of unstructured interviews and informal discussions with subnational government officials, civil society actors, trade union representatives, and local community leaders that began in January 2020, and which were pursued virtually following the lockdown. This is bolstered by analysis of primary documents, including Comptroller and Auditor General of India (CAG) reports, relevant laws, and contemporary press coverage. We argue that non-disbursement should be understood as a institutional matter, and not only as technical or implementation failure. Moreover, as such funds are likely to mushroom following Covid-19, our findings suggest that policymakers should focus on the institutional design, decision-making and accountability structures for the flow and distribution of Covid funds, rather than merely emphasising their collection.