Milk the system
It is the late Prime Minister Rajiv Gandhi’s famous lament that only 15 paise of every rupee the government grants citizens in need actually reaches the intended beneficiary, which will haunt people who care, as plan after plan to improve a sinister delivery system is subverted after initiation. The latest is Rural Development Minister Jairam Ramesh’s DTH (direct-to-home) scheme to deliver welfare entitlements like unemployment wages, pensions, maternity benefits, scholarships and subsidies through micro-ATMs of the post offices. This proposal, which also relies on modern electronic technology, comes after DBT (direct benefit transfer) where governments send subsidies automatically into bank accounts after a one-time identity verification by the beneficiary’s Aadhar card, was suspended last week under political pressure.
Mr Ramesh saying: “Today in our delivery system, the leakage is more and the coverage is less” is a poignant reminder of challenges that remain unmet by governments in two and a half decades. “Whether it is food security, whether it is health, whether it is pensions, whether it is Mahatma Gandhi National Rural Employment Guarantee Act, you take any programme. We have a lot of money, but how much money actually reaches the beneficiary is a big question mark,” he went on and mentioned as an example, the 10 or 15 per cent cut officials take to release a scholarship amount. The DTH, Mr Ramesh said, has begun in Andhra Pradesh and will extend to Jharkhand and in two years cover the country, particularly where there are no banks.
There are two elements for the success of any delivery system. One, to correctly identify the beneficiary; and the other to ensure the benefit reaches the intended in full and in time. Forget all the contentious socio-economic parameters to determine welfare benefits and the number of genuine claimants to any scheme, the critical issue of identity is of the individual. This is one area of dishonesty which the unique identity card Aadhar with embedded electronic biometrics sought to overcome. Objections of all sorts were raised and it is now under challenge in the Supreme Court. The government continues issuing Aadhar and encourages its use, although it is prevented from mandating Aadhar as the sole cradle-to-grave identity card for official services as was meant to be. Ensuring that all the money reaches and in time, has been next to impossible so long as there are layers of officialdom manned by people with sticky fingers. Transferring money directly into bank accounts was meant to beat that.
Re-checking identity (which knocked off many illegal gas connections) and transferring subsidy to the bank, was a big ticket effort to try out a delivery system eliminating middle-men. It was on in 291 districts covering 9.22 crore consumers and Petroluem Minister Veerappa Moily had told Lok Sabha that 11 states/UTs were ready for a similar scheme for kerosene. The hue and cry from all directions and the government buckling rather abruptly, raise serious questions. One is about bad economics that populist subsidies make. As RBI Governor Raghuram Rajan said, when 97 per cent of gas consumers are covered by subsidy, it is misdirected. The other is about who stands to gain by keeping the system of delivery porous and inefficient. In making Aadhar’s utility suspect over gas subsidy, a major component of e-governance was lost. It was the perfect platform to replicate Aadhaar-backed DBT to some or all of the Centre’s approximately Rs 2.2 lakh crore food, fertiliser and fuel subsidies. The politically expedient have much to answer for scuttling plans that would have streamlined the system and saved the nation crores in administrative costs.
