Stefan Ecks (University of Edinburgh) & Vani Kulkarni (Yale University)
1. Introduction: A Policy Built on Two Relational Fantasies
The Rashtriya Bima Yojana, or RSBY, was launched by India's Central Government in 2008 as the country's first national health insurance scheme for households below the poverty line. Families could enrol for a nominal fee of Rs. 30, less than fifty cents, to receive a biometric smartcard granting up to Rs. 30,000 of annual hospital coverage. The scheme was, by its own description, designed to be safe and fool proof for all participants: claimants, hospitals, insurance companies, and state governments alike. It was presented as a transformative act of state recognition: the government reaching into the poorest households in India and handing them a shiny biometric card that would make them visible, empowered, and included.
When we conducted longitudinal ethnographic fieldwork in villages and peri-urban areas of Gulbarga and Mysore districts in Karnataka between 2014 and 2019, we set out to understand how people enrolled in RSBY actually experienced the scheme. What we found was almost the precise opposite of what the policy had promised. The card was experienced not as recognition but as devaluation. It failed to raise the social standing of its holders in relation to government, to doctors and hospitals, or to wealthier fellow citizens. And the neighbourhood networks that policy designers expected would propagate information about how to access benefits instead became channels of strategic concealment. The same social density that was supposed to multiply the scheme's value instead threatened it.
This article reads these findings through the lens of the social capital concept, above all in its Putnamian form. We argue that RSBY was built on two interlocking relational assumptions, both of which not only failed but actively reversed under conditions of actual social life. Before going further, however, a clarification is necessary. RSBY policy documents did not deploy the term "social capital" explicitly. A pedantic reading could therefore object that this article attacks an assumption the policy never made. But RSBY need not have explicitly invoked social capital to reproduce its core logic. The civic-recognition fantasy and the transmission-channel fantasy were structurally present in the scheme's architecture regardless of the vocabulary used to justify it. What matters is not the label but the underlying theory of how social relations work, and on that theory, RSBY and the social capital tradition were operating from the same set of assumptions.
The first assumption was that giving poor households a state-issued biometric credential would dramatically increase their standing as citizens: their recognition by private healthcare providers, their status relative to wealthier people, and their relationship to government institutions. Citizenship, in this model, is a resource that can be allocated by distributing material tokens of belonging. The second assumption was that horizontal social ties among poor communities, the networks of neighbours, kin, and community members, would spread enrolment and propagate knowledge about how to use the scheme. In Putnam's formulation, dense civic ties generate information flow, trust, and collective benefit. The policy operated as though this were simply true of rural Karnataka.
2. The Two Relational Fantasies
2.1 The Civic-Recognition Fantasy
The civic-recognition fantasy is the assumption that distributing a formal credential to poor households will generate social recognition, that being made visible to institutions through a state-issued object will translate into being treated with dignity by those institutions. The fantasy has deep roots in liberal political theory and in the development literature on social protection. It assumes that the primary barrier to poor people's access to healthcare is informational and administrative, that they lack the documentation to prove entitlement, and that once documentation is provided, institutions will respond accordingly.
RSBY's biometric card was designed to solve precisely this problem. Enrolment linked each cardholder to a national database. This was not merely a logistical convenience. It was a statement about citizenship. In a country where the poor are frequently invisible to institutions, unable to prove identity, unable to access services requiring documentation, unable to enforce formal rights, the biometric card was meant to be a form of literal inscription into the state. It would make the invisible visible. And crucially, it was imagined that this formal recognition would translate into social recognition: hospitals would take cardholders seriously, doctors would acknowledge their entitlements, and the experience of being poor in an Indian hospital would be transformed.
Underpinning all of this was a particular theory of the relationship between the poor and the state. Historically, poor households in India have experienced that relationship primarily as one of extraction, harassment, and humiliation. Public hospitals are chronically underfunded. District health officials are often inaccessible or corrupt. The experience of seeking state help has frequently been one of devaluation rather than recognition. RSBY's designers believed that a national insurance scheme, with a biometric card, a national database, and a formal entitlement, would shift this relationship fundamentally. The state would be offering something of real value, and the card would be the material sign of that offer. This belief turned out to be wrong in precisely the way the civic-recognition fantasy is always wrong: it assumed that formal recognition produces social recognition, and that distributing a credential changes the relational world into which it is inserted.
2.2 The Transmission-Channel Fantasy
The second relational assumption was about horizontal community ties. RSBY's enrolment design was explicitly community-based. Eligible households in a locality were asked to queue at a common enrolment station on the same day, making the process public: people could see who else was enrolling, could talk with neighbours and kin in the queue, and would know afterwards who in their community held a card. The assumption was that this public, community-based structure would harness existing social ties for the scheme's benefit. People who had used their cards successfully would tell others how to do the same. Information about which hospitals were empanelled, how to navigate the claims process, and what conditions were covered would flow through the community via the ordinary channels of neighbourly conversation and kin communication.
This is the model of social relations that Putnam's framework depends on. In communities with dense, active, trusting ties, information flows more easily, trust reduces transaction costs, and shared norms encourage co-operation. Voluntary associations, neighbourhood networks, and informal social contacts are the infrastructure through which public goods become accessible and effective. Applied to RSBY, this logic suggests that the denser and more trusting the community, the better the scheme should work.
But here the policy made its most consequential error, so fundamental that it deserves to be named precisely. RSBY's designers effectively assumed that rural Karnataka was already characterised by the kind of civic fragmentation that Putnam described in late twentieth-century America: that households were relatively atomised, that social ties were thin enough not to complicate the scheme's operation, and that the primary unit of policy intervention was the individual household. This was the opposite of the truth. Rural Karnataka's villages were not weakly connected social spaces. They were worlds of dense, recursive, mutually watchful social life: worlds in which people knew exactly who else had the card, who had used it, and what it might mean for themselves if others used it successfully. The policy was designed for a social world that did not exist. It was then inserted into a social world that it had not anticipated.
Implicitly, the scheme also assumed something about the valence of social ties. Dense networks were presumed to be cooperative: people would share information because sharing is what connected people do, and because the scheme's value was imagined as non-rival. One household's use of the card would not diminish another's. Health insurance, unlike food or money, is not obviously a limited good. The policy model assumed, without examining the assumption, that people would experience it this way. They did not.
Both the civic-recognition fantasy and the transmission-channel fantasy were wrong. Not partially wrong, not wrong in some cases and right in others, but systematically and structurally wrong. The RSBY card did not increase the standing of its holders. And neighbourhood networks did not propagate information. They suppressed it.
3. The First Collapse: What the Card Did to Social Standing
3.1 Not Recognition But Devaluation
The most immediate and consistent finding from our fieldwork was that holding an RSBY card did not raise the social standing of poor households. It paradoxically lowered it. The scheme that was supposed to transform BPL families into empowered co-creators of healthcare value instead created a new and visible poverty marker, one that doctors and hospital administrators could use to identify patients as low-value, as people whose care would be reimbursed at fixed government rates rather than at the premium rates that private hospitals preferred.
Mr. Shivakumar's experience was representative of many. He had tried to use his RSBY card on several occasions and failed repeatedly, not only in getting treatment costs covered but also in being seen as a full citizen by hospital staff. He described arriving at the hospital, showing the card, and finding himself directed to a separate, slower queue, given less time with doctors, and offered fewer diagnostic options than paying patients. The card, which was supposed to be his entry into the healthcare system, instead marked him as someone who could be treated as a lower-priority case. He said explicitly that having the card made him feel worthless.
This experience reflected a structural feature of how RSBY cards were positioned within the hospital economy. Private hospitals empanelled under RSBY could earn money from paying patients by recommending additional diagnostic tests, selling medications, or upselling uncovered services. None of these revenue streams were available with RSBY patients, who were covered only for specific procedures at fixed rates. The card therefore signalled to hospital staff not empowerment but the opposite: a patient who would generate less revenue, who had fewer options, and who could be managed with less attention. The civic-recognition fantasy assumed that formal entitlement would translate into social recognition. The reality was that formal entitlement translated into a new form of institutional stigma.
The civic-recognition fantasy inverted in a precise and traceable way. The card was supposed to increase the standing of poor citizens by making them visible to institutions. Instead it created a visible marker of poverty that reduced their value to those institutions. The recognition the card conferred was recognition as a BPL household, recognition as someone whose care would be reimbursed at government rates, recognition as someone who could be deprioritised without consequence. This is not the absence of recognition. It is recognition of the wrong kind, recognition that confirms and deepens the existing hierarchy rather than disrupting it.
3.2 The Relationship to the State: Abandonment Performed as Provision
The anticipated transformation in the relationship between poor households and the state also failed to materialise. Rather than experiencing RSBY as evidence of state care, many respondents experienced the scheme as evidence of state indifference performed through the gesture of provision. The card existed. The infrastructure to make it usable largely did not. The gap between the promise of the card and the reality of trying to use it was experienced not as administrative failure but as a form of deliberate abandonment: the state had given something that could not be used, and then disappeared.
This experience of abandonment after the gesture of provision was widespread. The lack of coordination between government departments and hospitals meant that even when people tried to use the card, they encountered bureaucratic obstacles that could not be navigated without special knowledge or connections. Hospitals claimed the card was not valid. Government offices said the claim had been processed. Insurance companies said the hospital was not empanelled. Each institution pointed to another. The cardholder was left in the middle, holding a plastic object that everyone agreed was officially valid and that nobody would honour.
The state, in this experience, had not offered recognition. It had offered an object and then withdrawn. The card existed. The infrastructure to make it usable largely did not. The relationship this produced was not one of enhanced civic standing. It was one of renewed humiliation: having been given something that did not work, and having tried to use it and failed, people felt not more but less confident in their relationship to state institutions. The card had made the state's indifference more visible, not less.
3.3 Negative Value: When the Capital Metaphor Has No Words
One of the most important theoretical contributions of our ethnography was the concept of negative value: the finding that RSBY cards did not merely fail to generate value but actively produced its opposite. This matters for the social capital critique because the capital metaphor has no concept for this phenomenon. Capital can be depleted, but it cannot be negative in the sense that having it makes you worse off than not having it. The RSBY case demonstrates that social resources can work precisely this way.
The capital framework, in both Putnam's civic version and Bourdieu's strategic one, operates with an additive logic. Social ties, networks, trust, and civic participation are resources that accumulate and yield returns. Even Putnam's account of decline frames the problem as depletion: America once had more social capital; it now has less. The question is always how to build or restore the stock. The framework cannot accommodate the possibility that adding a resource to a social field might transform that field in ways that leave people worse off than before the resource arrived.
But our fieldwork showed something the additive logic cannot accommodate: that participating in RSBY could leave people feeling worse than before, not merely unchanged. Mr. Shivakumar explicitly stated that having the card made him feel worthless. Mr. Raju, who had tried to use the card and failed, said he would rather not have had it at all, because trying and failing had been more humiliating than never having had the option. The card had introduced a new form of failure into their lives: the failure to access something they were formally entitled to, in front of neighbours and family members who knew they had the card and were watching to see what it would do.
The capital framework has no term for this transformation. It can describe low and high stocks, bonding and bridging, decline and growth. But it cannot describe a situation in which the introduction of a civic resource produces negative value, in which receiving something from the state makes you feel more acutely worthless rather than less. This conceptual gap is not a minor technical limitation. It is evidence that the capital metaphor is built on assumptions about the nature of social resources that the RSBY case directly contradicts.
4. The Second Collapse: What Neighbourhood Networks Actually Did
4.1 The Information Gap
The transmission-channel fantasy failed as completely as the civic-recognition fantasy. The majority of respondents described knowing very little about how to use their RSBY cards, despite having held them for years. They knew they had a card. They did not know which hospitals were empanelled, what conditions were covered, how to initiate a claim, what documentation was required, or what to do when a hospital refused to honour the card. This information gap was not the result of poor communication by the government. It was the result of active concealment by neighbours and kin who had the information and chose not to share it.
The sources of the gap were multiple. Government officials and RSBY representatives failed to inform people. Local politicians who were supposed to facilitate enrolment were often absent or unhelpful. But the most striking finding was that people who had successfully used their cards, who had navigated the system and received treatment, typically did not tell their neighbours. In a community where information about almost everything else, family affairs, agricultural prices, local politics, flowed freely through the ordinary channels of neighbourhood life, information about RSBY card use was systematically withheld.
4.2 The Limited Good and the Logic of Concealment
The theoretical key to understanding why information did not flow lies in what anthropologists call the ideology of the limited good: the belief, widespread in peasant and poor communities, that desirable things exist in finite supply, and that one person's gain necessarily comes at another's expense. In this framework, sharing information about how to access a resource is not a cooperative act. It is a competitive one, because every person who successfully uses the resource reduces the supply available to others.
Our ethnography shows that people in Karnataka evaluated RSBY through precisely this lens. Health financing was experienced as a limited good. Hospital capacity, doctor attention, and insurance reimbursements were all understood as finite resources that could be exhausted. If a neighbour used the RSBY card and received treatment, that was treatment that might not be available when you needed it. If a neighbour learned how to navigate the claims process and received reimbursement, that was reimbursement that might reduce what was available for your own claim. The non-rival logic that the policy assumed, the idea that one household's use of the card would not diminish another's, was simply not how people in these villages understood the situation.
The consequences were the precise opposite of what the transmission-channel fantasy predicted. Where the Putnamian model expected dense community ties to amplify the scheme's value through information sharing, the limited-good logic meant that dense community ties amplified the incentive for concealment. The more connected the community, the more visible each person's card use was to others, and the stronger the incentive to keep successful use quiet. Social density, which the policy had treated as a resource, became a mechanism for suppressing the information flow that would have made the scheme work.
Respondents confirmed the concealment pattern directly. Mrs. Seetha, whose son was sick and who wanted to try the RSBY card, described asking several neighbours whether they had used theirs. Each said they had not, or that they did not know how it worked. She later discovered that at least two of them had successfully used their cards and received treatment. They had not told her because they did not want her to use up the available capacity before they needed it again.
The brothers Govind and Yogesh provided perhaps the most striking illustration. They lived close to each other and both held RSBY cards. Neither knew the other had used the card successfully. Each had navigated the claims process independently, without telling the other. When this emerged in the course of our fieldwork, both were surprised. They had not concealed the information deliberately. They had simply not thought to share it, because sharing information about how to access a limited resource with someone who might compete for that resource was not, in their social world, the obvious thing to do.
4.3 The Recursive Inversion: Why More Social Awareness Means Less Sharing
The theoretical significance of these findings demands precise statement. The capital framework, in both its Putnamian and Bourdieusian versions, treats social ties as conduits. Information, trust, and norms flow through them. Dense ties mean more flow; sparse ties mean less. The policy logic follows directly: build denser ties, or harness existing dense ties, and you increase the flow of beneficial information. The model is essentially hydraulic. Social capital is the pressure; ties are the pipes; information is the fluid.
The RSBY findings invert this at the foundation. The crucial mechanism is interrecursivity: people in social environments do not merely transmit information through ties. They respond to each other's responses. They anticipate each other's anticipations. They model what others will do with information before deciding whether to share it. A neighbour is not a pipe. A neighbour is a recursively responsive social actor whose response to receiving information will itself be anticipated, evaluated, and factored into the decision about whether to share it in the first place.
This is not the absence of social life. It is social life in its most recursively complex form. Mrs. Seetha was not disconnected from her community. She was deeply embedded in it. That embedding was precisely what made information concealment rational: she knew her neighbours, she knew how they thought about scarce resources, she knew that sharing information about card use would trigger a competitive response, and she acted accordingly. The social awareness that Putnam's model treats as the precondition for information flow was, in this context, the precondition for information suppression.
The bonding/bridging distinction that Putnam offered to handle the dark side of social ties does not help here. The concealment pattern was not a feature of bonding capital gone wrong, of in-group solidarity excluding outsiders. It operated within the closest ties, between brothers, between neighbours who had known each other for decades, between people who shared the same caste, the same street, the same daily routines. The problem was not that ties were too strong or too weak, too bonding or too bridging. The problem was that the capital framework cannot model what happens when social awareness becomes the mechanism of competitive calculation rather than cooperative flow.
5. What the Two Collapses Tell Us About the Capital Metaphor
5.1 The Metaphor Cannot Handle Recursive Inversion
The RSBY case is theoretically important not merely because the relational assumptions failed to predict what happened, but because what happened was the precise inversion of what was predicted. The card that was supposed to raise standing lowered it. The networks that were supposed to spread information suppressed it. This is not random failure. It is structured failure, failure that follows from the recursive properties of actual social life that the capital metaphor systematically ignores.
The problem is the metaphor itself. Capital is inherently non-recursive. Money does not respond to how other money is being used. A factory does not adjust its output in anticipation of what other factories are anticipating about its output. Capital can be accumulated, deployed, and depleted, but it cannot be recursively responsive. The capital metaphor, when applied to social relations, imports this non-recursive logic into a domain that is constitutively recursive. Social relations are not capital. They are fields of mutual anticipation, response, and counter-response that cannot be modelled as stocks and flows without losing the properties that make them social.
In the RSBY case, the recursive instability is visible in its most extreme form. The same ties that, in Putnam's model, should have been the infrastructure for information flow became the infrastructure for information suppression, precisely because those ties were recursively responsive. The denser the social awareness, the more visible each person's card use was to others, and the stronger the incentive to conceal. The policy built a scheme that assumed non-recursive social relations and inserted it into a world of dense recursive social life. The inversion was not a contingent failure. It was a structural consequence of the mismatch between the model and the reality.
5.2 The Policy Built Its Own Blindspot
The RSBY case also illuminates why the conceptual failure has practical consequences. Both the civic-recognition fantasy and the transmission-channel fantasy were not merely wrong. They were wrong in ways that made their wrongness invisible to the people who designed the policy. The civic-recognition fantasy assumed that formal entitlement produces social recognition. When it did not, the failure could be attributed to implementation problems, to hospitals that were not properly empanelled, to officials who were not properly trained, to communication that was not sufficiently clear. The fantasy itself remained intact, because the fantasy does not predict what happens when formal entitlement meets a social world that has its own logic of recognition and devaluation.
Those assumptions systematically excluded the actual social world into which RSBY was inserted. The villages of Karnataka were not blank social spaces waiting to receive the scheme. They were worlds already dense with history, obligation, shame, scarcity, experience of state failure, knowledge of being ignored by hospitals, and vivid memory of previous schemes that had promised and not delivered. The policy had no conceptual vocabulary for any of this. The capital framework, which was the implicit theoretical foundation of the scheme's relational assumptions, provided no tools for understanding how a social world already saturated with recursive calculation would metabolise a new state-distributed object.
The deepest version of this blindspot was the atomisation error. RSBY's designers effectively modelled their target population as a set of isolated, bounded households whose primary social relationships were with the state and with healthcare markets. The horizontal ties between those households, kin obligations, neighbourhood surveillance, competitive comparisons, and recursive anticipation of each other's responses, were treated as a resource to be harnessed rather than as a field of force that would transform the scheme's meaning as it entered. This was not a minor oversight. It was the central theoretical error, and it was invisible to the designers precisely because the capital framework they were implicitly using had no way to represent it.
5.3 Being-With Cannot Be Made Non-Recursive
There is a deeper point here that the RSBY case makes concrete. The capital framework attempts to treat being-with, the irreducibly recursive domain of mutual recognition, obligation, anticipation, fear, care, envy, shame, trust, and resentment that constitutes actual social life, as if it had the formal properties of capital: as if it were accumulable, storable, transferable, and deployable across contexts without changing its nature. This is the fundamental error of the social capital concept, and it is an error that no amount of refinement within the capital framework can correct, because the error is in the metaphor itself.
But being-with is precisely the domain that resists this formalization. Its value is not contained in the tie. It is generated through the recursive interaction between the tie, its history, the material conditions within which it operates, and the anticipatory calculations of everyone involved. A neighbour is not a unit of social capital. A neighbour is a recursively responsive social actor whose response to any action you take will be shaped by their understanding of your situation, your history, your needs, and your likely responses to their responses. The value of that relationship, if value is even the right word, is not a stock. It is an ongoing negotiation that can produce cooperation, concealment, support, competition, or any combination of these, depending on the conditions under which it operates.
This is what the RSBY case demonstrates in real time. The public enrolment procedure that made neighbours visible to each other did not increase the stock of civic trust available for information-sharing. It created the conditions for a recursive calculation in which social awareness became a reason for concealment rather than co-operation. The card entered a recursively responsive world and was transformed by that world into something its designers had not imagined: a limited good, a stigma, a reminder of devaluation, and an object around which strategic silence had become the rational social response.
6. Conclusion: The Card Was Just Plastic Material
Mrs. Savitri's description of the RSBY card detonates the policy assumptions: "without information about the card, what value does it have? The card is just plastic material" (Ecks and Kulkarni 2024, 8–9). This deserves to be read as a theoretical statement as much as a personal complaint. The card was not just plastic material in a technical sense. It was an object designed to be a social transformer: to convert poverty into civic standing, to convert community networks into information infrastructure, to convert state recognition into individual empowerment. It failed to be any of these things not because the plastic was inadequate but because the social theory embedded in its design was inadequate.
Two relational fantasies organised that theory. The civic-recognition fantasy assumed that formal inclusion generates social recognition, that distributing a credential changes the relational world into which it is inserted, and that the experience of being poor in an Indian hospital could be transformed by issuing a card. Our fieldwork showed that the card instead created a visible poverty marker, that doctors used it to identify patients as "free" and therefore low-value, and that holding the card could make people feel more acutely worthless rather than less. The capital logic says: add a resource and you increase the stock. The reality was: add a resource and you sometimes transform how scarcity and stigma operate.
The transmission-channel fantasy assumed that dense community ties would propagate knowledge about the scheme, that social connectedness is reliable information infrastructure, and that the primary unit of policy design was the individual household rather than the recursively entangled social field in which that household lived. Our fieldwork showed that community ties instead became the medium through which the limited-good logic operated: precisely because people knew their neighbours had the card, they withheld information about how to use it. The policy built a scheme for atomised households and inserted it into a world of dense recursive social life. The mismatch was not a design flaw that could have been fixed with better communication materials. It was a failure of social theory.
What remains after both collapses is a set of questions that the capital metaphor cannot answer because it is not equipped to ask them. Not: how much social capital do these households have? But: what are the actual forms of being-with operating in this field, and what do they do under conditions of state-distributed scarcity, institutional opacity, and asymmetric recognition? Not: how can we build community trust to improve RSBY uptake? But: what are the recursive dynamics through which people evaluate and respond to policy objects, and how does perceived scarcity transform those dynamics? Not: did the card add civic standing to poor households? But: how did the social world metabolise this object, and what did the metabolisation produce?
These questions require engagement with the actual world into which policy is inserted: with the history of state-community relations, the texture of neighbourhood life, the experience of previous promises and their failures, the hierarchies of recognition within hospitals, the bodily experience of illness and poverty, and the recursive calculations that saturate every encounter between a cardholder and an institution. None of this is captured by the capital metaphor. All of it is necessary to understand what happened to RSBY in Karnataka.
The deeper lesson generalises. Policy that reproduces the civic-recognition fantasy, assuming that formal credentials produce social recognition and that distributing tokens of belonging changes the relational worlds into which they are dropped, will continue to generate Mrs. Shivakumar's experience: a card that makes you feel that you do not have value. And policy that reproduces the transmission-channel fantasy, assuming that dense community ties have a stable positive valence for information flow and that social connectedness is a resource that simply multiplies public goods, will continue to generate Govind and Yogesh's experience: brothers living close enough to drop in on each other's conversations, each holding the same card for years, each not knowing the other had it. Until the capital metaphor is replaced by a more adequate account of what social relations actually are, policies that claim to leverage community will continue to be surprised by the communities they encounter.
Reference
Ecks, S., & Kulkarni, V. (2024). 'Having the card makes us feel worthless': the negative value of government-funded health insurance in India. Anthropology & Medicine, 30(4), 380–393.