Cash Subsidy for Kerosene Pilot: Poor stand Deprived by Design?

Case of Kotkasim, Alwar, Rajasthan
Acknowledgements Innumerable people helped in doing the survey to be named individually. Each one’s contribution is equally important for the study. We gratefully acknowledge the help and support each of the individual household respondents, government official, shop-keepers, elected representatives, bank official, high court lawyer and researchers. But for their contribution the study would have been incomplete. In particular we would like to thank we thank Shri Ashutosh Pendelkar, DM, Alwar, former DSO Shri Lalit Jain who even visited Kotkasim to facilitate the survey work and current DSO Shri Banwari Lal. They were always available for any information and clarification. The survey could not have been completed without the painstaking efforts by young team of PUCL interns and the researchers. Schedule filling was time taking and challenging task. The working hours were long and conditions tough. They had to ask questions, verify records/entries in pass books and ration cards and at times even face rude behaviours of non-cooperative respondents. Several of them also helped in feeding data and writing cases, notes etc. We thank all, namely, Aayush Mall of Delhi University, Hindu College, C.V. Ravant, Kislaya Mishra, Sanjeet Singh, Vishal Khare, and Govind Prajapat Bharati of Vidyapeeth University New Law College, Pune. Fawaj, Krishna, Dhheeraj and Mohseen of PUCL and Akshay Mathur, Kirti Tak, Dashrath Sharma, and Babulal of Rozi Roti Sandharbh Kendra. To repeat without the active support of these young girls and boys the study would not have been completed. Finally, special thanks to Akshay Mathur who made several trips to field and coordinated the entire desk work.

Abbreviations: CFKS: Cash Subsidy for Kerosene Scheme DBC: Double Bottle Connection DSO: District Supply Officer FPS: Fair Price Shop TPDS: Targeted Public Distribution System PDS: Public Distribution System SBC: Single Bottle Connection

I: INTRODUCTION
1.1 Cash Subsidy for Kerosene Scheme: What it entails? In the recent past the Government of India is vigorously pushing the agenda of ‘cash transfer’ in TPDS in the name of ‘rampant corruption’, ‘pilferages and diversions’ of the ‘subsidy’ provided to poor. The State and believers in free market economy are of the firm view that the most ‘effective’ way to ensure that the ‘subsidy’ reaches the ‘intended beneficiary’ is ‘cash transfer of the subsidy amount’ in the account of the beneficiary using technology. That way only the leakages, diversions may be plugged. It is also claimed that the beneficiary would also be able to make choices in terms of buying the goods. Observe one of the researchers:
‘Last year, the World Bank’s “Social Protection for a Changing India” report said that experiences in India — in Bihar — and in many other countries have highlighted the benefits of targeted cash transfers. The same point has been made in government’s economic surveys, by Kirit Parekh Committee on oil pricing reforms and by Nilekani’s Task Force on direct transfer of subsidies. Letting everyone buy at the market rate and then compensating the poor through cash transfers not only checks diversion and pilferage but also ensures that only the poor get subsidized goods.’ [Singh 2012]

In pursuance of this agenda the Finance Minister of India, in his budget speech for the year 2011-12 stated that cash transfer would be introduced in respect of kerosene and fertilizers with effect from April 2012. However the important point that needs to be highlighted and understood here is that there is a distinction between ‘cash for kerosene’ and ‘cash transfer’, the two are not one and the same. There are two aspects to ‘cash transfer’. One is that the subsidy amount is provided to the consumer and not to the supplier of the goods and consumer buys the good at market price. This holds true for all kinds of cash transfer including that of ‘cash for kerosene’ scheme. The other aspect is that ‘cash transfer’ provides liberty to the consumer to buy the good from any other market place. The given amount of subsidy is ensured, it is not linked to the use. The ‘cash subsidy for kerosene’ scheme however differs because it stands linked to the use of the commodity. Unless a card holder buys Kerosene at market rate from the PDS shop, the household would not be entitled for the subsidy. This thus differs qualitatively from the ‘cash transfer’ scheme. The CFKS appears to be a skillfully devised scheme of targeting from the back-door. The access to kerosene is currently universal except for those who have double gas cylinders. Now it would become targeted. In the words of the district administration administering the Pilot in Kotkasim: “A new dynamics of consumption pattern has emerged through which one is well positioned to differentiate cheese from the chalk i.e. the actual (Consumer) user from the fake one. With the help of software a consumer purchasing SKO consistently and continuously will be detected and after three months/six months purchase pattern subsidy amount will further be needed to be deposited only in the A/Cs of actual

users”. One wonders if this is the right way of differentiating ‘cheese from chalk’ especially keeping in view of the ground reality. We hope that the present study would provide some clarity on this. We close this section with the observation that the cash transfer schemes including the present one is primarily to address the question of poor governance without taking into account the impact it may have on the welfare of the poor and vulnerable. 1.2 The Cash Subsidy for Kerosene Scheme In pursuance of the idea of cash transfer, the Government initiated several pilots in different parts of the country. In one area of Delhi cash was transferred in lieu of all goods distributed through PDS. In Kotkasim block of Alwar district of Rajasthan ‘Cash for Kerosene’ scheme was launched on 5th December 2011. As per the companies the cost of Kerosene is Rs 44.50 per litre in Rajasthan [including the cost of transportation and commissions] but is sold at the ration shop at the subsidized rate of Rs 15.25 per litre. The subsidy of Rs 29.25 per litre is paid directly to the companies supplying kerosene. Under the new scheme the companies sell at their cost and the subsidy is paid to the consumers. The details of the scheme and protocol have been drawn [Section 1.2.2] based on various decisions taken by the senior officials in different meetings [See Annexure 4].

1.2.1

The Salient Features

The salient features and broad operational details of the scheme are as follows: 1. It is compulsory scheme. One can get entitled quantity of subsidised Kerosene only if one joins the scheme. The entitlement is three litres for all card holders except those who use gas cylinder. Single gas cylinder holders are entitled for two litres and those who have double gas connection do not get any kerosene. 2. The ration card holder has to compulsorily buy Kerosene from the ration shop at market price of Rs 44.50 per litre to be eligible for the subsidy. 3. Under the scheme cash subsidy amount at the rate of rupees 29.25 per litre is credited in the account of the ration card holder in advance for three months initially. Thus those entitled for three litres get initial subsidy of RS 263/- once in three months and those who are entitled for two litres Rs 175/-. Thereafter it stands linked with the kerosene use. Subsidy would be credited only if kerosene is bought. 4. To receive subsidy it is essential for a ration card holder to have a 14digit CBS bank account in the mane of the head of the household as stated on ration card to facilitate e-transfer. For those who do not have such account a new zero-balance nofrill account would be opened by the administration. The scheme is proposed to be linked finally with the UID. In fact it was to happen that way from the very beginning. However, since UID cards could not be made and modalities of linking it with the bank account could not be set up so it was relaxed. The making of UID cards is going in full swing.

5. The ration dealer would note down the details of the card holders buying kerosene and would forward the concerned account numbers to DSO every month based on which the subsequent instalment of subsidy would be credited in the accounts. 1.3 The Protocol The documents provided by the district administration, especially the minutes of the meetings and details of correspondence between state officials and district administration, state and union officials, government and oil companies officials, refer to the processes that were to follow for effective implementation of the pilot project [See Annexure 4 and Annexure 6]. Four primary tasks identified for successful execution of the project included opening of accounts, depositing the subsidy in newly opened accounts, developing software for the project and monitoring the change in the consumption pattern/Key Statistics. These along with others are briefly related below. However we could not get clear set of operational guidelines or protocol from the district administration. There appears to be quite a lot of confusion about several operational aspects which we shall discuss in detail later. 1.3.1 Selection of tehsil for pilot The district collector of Alwar and Bharatpur had to each select a tehsil from their districts which had the highest number of bank accounts opened and where UID cards were maximum or the process of making these cards was in the highest momentum. Bharatpur district was dropped and Laxmangarh, Alwar was initially selected for the pilot but later it was dropped and Kotkasim was finalized. During the selection of Kotkasim, it is not clear if the UID clause as a criterion remained or not in addition to the number of bank accounts. 1.3.2 Creation of awareness: Before implementation of the scheme Consumers, People’s representatives and FPS dealers will be made to understand through discussion about the benefits of the scheme, implementation and its effects. They will be taken into confidence for their cooperation to successfully implementation the pilot. 1.3.3 Opening of bank accounts:

Prior to launching of the scheme the administration was to open zero-balance, no-frill Banks accounts of all the ration card holders so that the subsidy could be deposited. These bank accounts were to be opened in the name of the Head of the family and were to be linked with the UID. Accordingly Narega accounts or any other previous accounts were of no avail. Camps at Panchayat and village level were to be held for the purpose. 1.3.4 Depositing subsidy After opening the account depositing of initial subsidy for three months was the second step that was to be followed. Accordingly Rs 263 [29.25x9] was to be deposited for those

entitled for three litres and Rs 175/- [29.25x6] in those accounts who were eligible for two litres. Subsidy was to be transferred through e-transfer. After initial three month credit of subsidy, from the next quarter subsidy was to be credited based on the actual consumption of first month of the previous quarter for which advance subsidy was credited. For those who did not buy kerosene the subsidy was to be adjusted. 1.3.5 Data Management: Developing software For smooth functioning new software was to be developed to store all relevant information and execution of the pilot. The software would store data like profile of card holder, account number with bank name, subsidy amount deposited, LPG status, kerosene use etc. This was to be developed with the help of National Informatics Centre. Monthly details of cards holders buying kerosene would be fed into this data base and based on use subsidy would be credited in these accounts through e-transfer. 1.3.6 Monitoring Consumption Pattern Changes in the consumption pattern were to be monitored regularly. The details of monitoring however are not clear as to at what level the monitoring was to be done and how. The documents do not specify that. 1.3.7 Special package for Ration Dealers and multi-branding of ration shops The administration was aware that upon launching of the scheme the off-take of kerosene will decrease affecting the dealers adversely and to compensate that decision was taken to convert the FPS into a multi brand store wherein non-PDS items like Raj Atta, Raj Tea and Raj Salt would be sold. In the future additions of Raj Soap, soya oil and masala shall be made. Also, the ration dealers were to be given Rs1000/- month for the first 3 months which shall be used in advertising for the scheme and other basic requirements. Further, as per dealer it was promised that a sum of Rs 25,000/- will be spent to modernize and installing a computer etc. in each of the 34 shops. Face lift of shops through attractive danglers, new painting on the walls of the shop and effective display of non-PDS items was promised to present FPS as Multi Brand Stores. 1.3.8 New Ration cards It was also decided that new ration cards would be made wherein the bank account would also be stated. Since the old ration cards had already outlived their 10-year life, new cards were due. This was to be done as part of the pilot. 1.3.9 Assessment of the scheme by the State government Rajasthan government was to evaluate the performance of this scheme after three months of launch and report was to be sent to the central government who after due consultations with the Petroleum ministry was to prepare further guidelines. Sarpanches, public representatives and consumers were to be consulted for feedback for a successful implementation of the scheme and for the joint participation of all stakeholders.

1.3.10 Other points (i) The pilot was to be started in October 2011 but later it was started from December 2011. (ii) The Food and Civil Supplies Corporation, Rajasthan was to ensure that no kerosene from other places is smuggled into Kotkasim block. (iii) A workshop would be done with the public representatives and FPS dealers to have their wholehearted cooperation. (iv) The oil companies would make software to record all gas connections which would be dovetailed into the PDS software. (v) Committees/task force would be constituted to monitor the scheme at district and block level 1.4 Need for Assessment

The discussion about the cash transfer in lieu of subsidized commodities has been under debate for quite some time now among the concerned. Whereas the State is on way to transfer, there are groups who do not agree with this proposal on several counts. They are of the view that ‘cash transfer’ would do more harm than good to poor and vulnerable. Several arguments are given against the cash transfer. One, cash is likely to be controlled by men and thus the money may be diverted for other purposes rather than for purchasing the goods for which the cash is being given finally losing the entitlement. Second, the cash would not be available easily which ultimately may deprive many poor households of the benefit who need the benefit most. Third, the poor are going to be looser because of the opportunity cost involved in access to cash. The actual impact on ground of any pilot however is possible to assess only during the course of implementation. So when the pilots started being implemented, it becomes imperative that such pilots are assessed comprehensively. And logic demands that only after such reviews a final view on the projects should be taken it wind up or scale up. In fact, as per the protocol the government was to evaluate the scheme after three months, but that did not happen and is due. Assessment becomes more important given the fact the (a) present pilot was considered an extremely important Programme of national import and accordingly district administration put in everything to make it a success (b) the programme was based on the belief that there are large scale leakages in the kerosene and the siphoned kerosene is misused for adulteration. It thus started with a negative approach that there are wide-spread pilferage/leakages (c) based on visible outcomes rather than a comprehensive assessment the pilot is being projected as being highly successful. District administration consider it very successful as it has achieved the following: (a) checking the leakages, (b) reducing the subsidy bill considerably: if the pilot results are

projected at Rajasthan state level then the total savings on subsidy bill would be roughly 920 crores per annum as against the current subsidy of about 1500 crores and (c) ensuring that benefits reach only the real beneficiary. The administration also claims that the quota of three litres now could be increased for the real needy households. These claims of the district administration however need to be assessed critically.[Source: PPT presentation by the DM- available on web portal]. The basis of this presentation was the experience of two/three months of operations. If we go by the latest set of data then the saving of the subsidy would be almost 100% because the kerosene use is negligible. There have been several reports on the Kotkasim pilot [See Table 1]. But mostly they are journalistic based primarily on briefing from the administration. Barring one or two none of these are investigative reports. Mostly these reports suggest that leakages have been plugged. There is also a report that suggests that it is preventing access to kerosene. Thus there are contradictory views. In light of all these, it becomes imperative to have a deeper assessment of the pilot. 1.5 1.5.2 Methodology Objectives:

The primary purpose of the assessment study is to understand the full implications of the pilot especially the impact on poor and vulnerable who need subsidy the most. Moreover, the pilot and pilot related available information raised several questions that needed satisfactory explanations like why not all accounts have been opened, why is there a drastic cut in the consumption- is it really related to demand or there are other aspects too like opportunity cost, bank related problems, etc. The other set of questions we thought need exploration related to democratic decisionmaking processes. PDS being most important aspect of daily lives of the common man were the different stake-holders like elected representatives; shop-keepers were taken into account before launch of the scheme? How? Was there ward sabhas or gram sabha meetings? Was the scheme explained in details? How people came to know about it? Did people gave consent? Finally we were also interested in knowing as to how the scheme has functioned? What are the loopholes? Is there extra work load on officials? What impact it has had? Why shopkeepers have gone to high court? What was the extent of black marketing? Who are the gainers of mis-use/leakages? Did money reach in accounts in time? Does the money reach in time every month? How money is replenished? Specifically the objectives are:   Assess incidence, purposes and pattern of kerosene use Assess impact of the cash for kerosene scheme on the consumers’ access to Kerosene and reasons thereof

 
 

To map the relative gains and losses of different stakeholders: gains to government are known To understand overall efficacy of the scheme vis-à-vis the stated objectives of plugging leakages with no adverse impact To understand the functioning of the scheme To understand the people’s perception about the scheme

1.5.2 Sources of Information: The assessment is based on both secondary and primary data. We gathered information from the households; ration shop dealers; government officials; bank officials and elected representatives. Information was in terms of interviews both structured and informal as well documents. 1.5.3 Method of data collection: For the purpose of the data collection we developed (a) A listing of the household schedule (b) A schedule for collecting information from the households (c) A schedule to collect information from the Shop-keepers (d) A set of questions for the District Magistrate. In addition to these structured questionnaires we also interviewed DSO, food inspector, bank officials and elected representative like sarpanch. 1.5.4 Coverage: An attempt was made to cover block tehsil headquarter, one remote village, one village near an industrial area and a village dominated by scheduled castes. We covered three Panchayats and four villages: Kotkasim proper, Kharol and Jhadka villages in Pataliya Panchayat and Patan Ahir. Patan Ahir area was chosen on the recommendation of DSO who said that it being industrial town the need for kerosene is very high here. In all we covered 140 households. A detailed household questionnaire was administered to these families in the four selected areas. The sample is biased in favour of official poor as comparatively much larger proportion of BPL, SBPL and AAY households were covered. 1.5.5 Limitations: Availability of resources was the biggest hurdle because of which we could not do a more comprehensive survey. We could not cross examine the extent to which the number of 15, 020 accounts are serving the purpose of the pilot and also why large number of ration card holders- 9,584 - did not open accounts. We also could not examine in details the extent to which people have not been able to access subsidy due to various factors like nonavailability of pass-books, difficulty in access to banks, forced demand for minimum balance, non-receipt of subsidy and issues like why people have not opened accounts, why people are resistant to operate an account, the hurdles in accessing accounts.

The report is based on relatively thin purposive sample of households. The results however definitely indicate towards implications for different stake-holders and raise several important questions.

II: FINDINGS OF THE SURVEY:
In this section we shall present the findings of the survey. The findings are based on survey data of households, government and shop-keepers records, officers’ and dealers interviews. This section is divided in several sub-sections. Each sub-section deals with one particular aspect of findings. The important section include profile of area and sample households; details about kerosene use; impact of scheme on kerosene use with reasons; structural and managerial issues related to scheme; the process, roles and differing perceptions about the outcomes and reasons thereof; people’s perception about the scheme and conclusions and suggestions. The available information suggests that there is sharp decline in the use of kerosene since the launch of the pilot for several reasons. As per latest information, there has been zero use now as the dealers are on strike for last three months. 2.1 Profile of the Selected Block Kotkasim is a small block in the district of Alwar, Rajasthan. It is located about 60 KM away from the district headquarters and falls little off the Alwar-Delhi road. It is about 100 KM from national capital city of Delhi. Kotkasim is relatively better off as the agriculture is quite productive. It has 24 Panchayat and 34 fair price shops. Total number of ration cards is 25,843 of which 1070 BPL, 1577 SBPL, 1,082 AAY and 22,114 APL. This may have been one of the reasons for selection of the block for pilot. Table 2 below provides details of various types of cards in Rajasthan, Alwar and Kotkasim. It suggests that Alwar is relatively better district in State of Rajasthan and Kotkasim is relatively better within the Alwar district. The percentage of BPL and AAY households put together is less than ten percent- 8.33% in Kotkasim compared to 17.59% at the state level and 10.87% at district level. Thus relatively better off area was selected. Why it was done so we do not know. The point to be stated here is that Kotkasim was chosen almost at the last moment. Initially, Laxamangarh was to be selected which is relatively bigger block.
Table:2: showing comparative situation of Kotkasim in Distribution of different ration cards Sl No Type of Cards Rajasthan Alwar Kotkasim Sample 1 2 3 4 5 6 1 APL 76.65 82.75 85.57 43.6 2 BPL 11.99 6.4 4.14 19.3 3 SBPL 6.76 6.38 6.10 19.3 4 AAY 5.60 4.47 4.19 17.9 5 Total Card in ’000 16628 725.3 25.8 N=140 Note: Barring figures in row five all the figures are percentages to column totals

2.2 Profile of the Sample Households

Column six in Table 2 provides distribution of sample households by type of ration cards. It suggests that 56.4% of the sample households are from poor categories of BPL, SBPL and AAY. A comparison with the distribution of cards for the block as a whole clearly indicates that our sample is overwhelmingly in favour of the official poor. It is a purposive sample and since our purpose was, inter alia, to understand the impact of the CFKS on poor in particular we deliberately chose more official poor. However, given the fact that the selection of BPL is biased we believe that the sample is rather representative of the majority of the population. The socio-economic profile of the households related in this section further support of sample profile. 2.2.1 Level of education of the Head of the Households is low [Table 3]:
Table: 3: Education level of the head of the household Village Illiterate Primary Second Graduate Post ary Graduate Kharola 42.4 18.2 18.2 0 3 Kotkasim 57.4 25.0 14.7 1.5 0 Jhadka 45.0 40.0 15.0 0 0 Patan Ahir 47.4 42.1 10.5 0 0 Total 50.7 32.1 15.3 .7 .7 HHEDSTT 16.4 21.4 40 21.5 (Include PG) Notes: 1. All figures are in percentages; 2. Sample Size (N)=140 3 HHEDSTT stands for highest level of education achieved by any member of the family.

Among head of the households, 51% are illiterates; 32% up to primary. Out of total of 144 only one reported to be graduate and one post graduate. Pattern seems to be by and large the same across all the four areas. This has implications for financial inclusion. Low level of education basically means low levels of incomes obviating any need for a bank account. However if we look at the education level of the households, we find that about 16% families are illiterates and little more than one-fourth of the families have a graduate member.

2.2.2 Occupation:
Table: 4: Main Occupation of HHH Village Self Wage Employed Labour Kharola 60.6 27.3 Kotkasim 17.6 63.2 Jhadka 10.0 80.0 Patan Ahir 5.3 89.5 Total 25.0 60.7

Salaried .0 1.5 .0 .0 .7

Other 12.1 16.2 10.0 5.3 12.9

Among sample households 61% are wage earners and only 30% reported to be self-employed. Most of the families are nuclear families as 76% reported one earner. However looked at regionally, we find that in Kharol village the majority of the families are self-employed-

agriculture is the main source of occupation. During the course of survey it was observed that children at early age start working in fields, or join their father for labour work. This is typical of a traditional social system. 2.2.3 Living Conditions:

Housing situation is no better. 15% live in kachha houses and 56% live in one room. Living conditions are also not very good. Two-thirds of the respondents reported they do not have separate kitchen and toilets. Thus overall the conditions of the respondents are that of social backwardness and relative economic deprivation. 2.2.4 Awareness about the CFKS: 74% knew about the scheme. Main source of information was reported to be the shopkeeper. TV/Radio/Special Camps/Secretary etc were source for only 17% respondents. It is obvious therefore that the district administration completely failed to make people aware about the scheme as its efforts could not reach even one-fifth of the households. This is in contradiction to what has been stated in the official documents. 2.3 The incidence and purposes of kerosene use among the sample households One of our objectives was to understand the demand- pattern of kerosene. This is the first essential step for assessment. This actually is foundation of the present study. In an answer to the use of kerosene in the family, about 82% respondents said that they use kerosene. The range of use in the four sample areas vary from 68 to 90% [Table 5]. There is thus a demand for kerosene provided Table: 5: Households reporting use of kerosene there are no barriers in supply. We also Village Yes No tried to find out the frequency and purposes Kharola 69.7 30.3 of the use. The use however varies in space Kotkasim 83.8 16.2 and time due to various factors. Jhadka 90.0 2
Patan Ahir Total 89.5 82.1 5.3 17.1

Table 6 suggest that in four areas covered

under the survey the average regular use of Rarely Never kerosene has been 54.2 12.1 reported by 63% of the 7.4 1.5 households and sometime 20.0 .0 use by another 13%. That 5.3 5.3 means about three20.0 4.3 fourths of the families use kerosene and need to buy from the ration shop. In response to another question about impact of the scheme, about one-fourth family stated that there is no impact of the scheme. Thus these are the families who do not use kerosene. However the reported use has not been the same in all the four areas. The extremely low figure for Kharol village is due to the fact that PDS is a problem in Kharol because of location of the ration shop and its overall utility. After the CFKS, the kerosene supply has literally chocked because the bank too is quite far and the bank and the shop are in two different directions.
Table: 6: Frequency of using kerosene Village Regular Sometimes Kharola 15.2 18.2 Kotkasim 82.4 8.8 Jhadka 65.0 15.0 Patan Ahir 73.7 15.8 Total 62.9 12.9

For Kharol we find that there is considerable variation in the ‘use’ and ‘frequency of use’ data. This needs explanation. The reason perhaps lies in the ‘satisfied and unsatisfied need’ and current ‘possibility and availability for use’. If we relate these data with other relevant data from the village, we shall be able to understand the wide gap in the two figures. Let us examine the following data related to Kharol: (a) The residents of Kharol have become indifferent towards PDS because of small number of official BLP and AAY cards and far off location of ration shop (b) The pass-books of the card holders have yet not reached the households that means they have yet not got access to subsidy (c) We came across families who have been buying kerosene from nearby town Khaithal which is just three kilometers away at lesser price than the designated shop located at 10 kms away [case 2] (d) prior to launch of the scheme ----respondent reported buying kerosene (e) when asked specifically about the location of shop it was stated that if the shop can be located nearby within the village use of kerosene would increase considerably. If we interpret the above set of data in totality we shall find that in village like Kharol PDS stand dismantled and in such a situation the data clearly suggest that what is required is revamping of PDS. Our study suggests that for the people of Kharol, Khairtal is the place for marketing for the villagers. This is equally true for kerosene like other commodities. Kerosene is available there for Rs 35/- a litre. The needy therefore buy from there. The reasons are simple: (i) The town is easily approachable (ii) rate is 25% lower (iii) the opportunity cost is lower (iv) subsidy has eluded the families of Kharol. The above two tables establish that there is demand for the kerosene. Details about monthly consumption and purposes suggest that use is about three litres a month. This response appears to be in relation to entitlement. This means that use pattern is decided by the entitlements. 71% reported monthly consumption of three litres; 10% two litres. About purposes, 54% reported using for lighting; 19% for cooking and 22 % for joint use; one said for tractor. This is in line with the Kerosene Control Act of 1995. 2.4 The impact of CFKS on use of Kerosene From day one of the implementation of the scheme the consumption of kerosene has come down. This has been reported by all the stake-holders namely government, shop-keepers and households as we shall see in the sub-sections below. The consumption declined with the launching of the scheme in December and thereafter it continued declining and reached almost zero sales by June-end. In this section we shall examine the trends of decline based on different indicators mainly the lifting at block level, at shop level and household consumption pattern. 2.4.1 Government records: Table 8 provides details of kerosene allotted, lifted and sold during October 2011 to June 2012 in Kotkasim. The CFKS was launched on 5th December. Till then there was no saving of kerosene. Since then there has been drastic change in the quantity lifted and sold. The last two months [ May and June 2012] data suggest that there has been no lifting and the quantity sold is only 5.49% of what was sold in November 2011, the month before the

launching of the CFKS. Overall during seven months since the launch, the savings has been 87.5%. That means that only 12.5 % of the allocated KSO was sold. For last three months the off-take and distribution is NIL due to total boycott by dealers. So there has been total saving. The use pattern seems rather baffling. If we compare the data of columns 5 and 6 i.e. of SKO sold and number of accounts, we find that the use of SKO increased with increase in number of accounts in January 2012 compared to December 2011 but thereafter the use has been stagnant for three months and then there is sudden secular fall whereas the number of accounts have been almost the same. This suggests as if there is no relation in the number of accounts and lifting of kerosene. Alternatively, if we look at the totals of SKO lifted and sold we find the situation a bit clearer. It suggests negligible stock with the 34 dealers. If we further look at the lifting and selling figures for the months of May and June 2012 we get a feeling that the dealers only wanted to exhaust their stocks suggesting that the reason for sudden decline in kerosene use is related to dealer interest.
Table:8 : SKO Allotted, Lifted and Sold in Kotkasin from Oct 2011 to June 2012 [In thousand litres] Cum Sl No Month SKO SKO SKO No of SKO Allotted Lifted Sold A/c Saved Saving 1 2 3 4 5 6 7 1 Oct 11 84 84 80 Nil 2 Nov 11 84 84 82 2 -3 Dec 11 84 36 18 6000 66 66 4 Jan 12 84 36 23 13700 61 127 5 Feb 12 78 0 13 15020 65 192 6 Mar 12 78 12 12 14458 66 258 7 Apr 12 78 12 12 15020 66 324 8 May 12 78 0 9.5 15020 78 402 9 Jun 12 78 0 4.5 15020 78 480 86.92% of SubFeb to 390 24 51 allocation total June 12 [6.15%] 83.5 % of Total Dec- 11 558 96 92 15020 480 allocation to June [17.2%] 12

This point gets further substantiated by figures of column 4 and 5 i.e. lifted and sold which suggest positive relationship between the two suggesting that when stocks are lifted they are sold also. We reach to same conclusion when we look at the figures differently in terms of percentage of stocks lifted and savings compared to allotments for two different periods. The percentage of savings is higher when lifting of the stock is less for given periods. When we asked the district administration about the reasons for the low demand the administration cited only one reason that demand has come down due to summer months which is ‘usual’ [Annexure 2]. To quote, “demand has come down due to summer so lifting has gone down- shop keepers have nothing to do with off take as it is related with the demand amongst card holders”. However what they glossed over was the fact that the

decline is by no means ‘usual’. The administration conveniently ignored the ‘unusual’ situation, perhaps in their over-enthusiasm to prove their point of view. That the administration’s view is untenable can also be proved based on our kerosene use data. For instance, if we presume that about 75% are using kerosene than the diversion is for about 25% and the demand should be roughly for about 50,000 liters but the actual offtake in June was just 4.5 thousand litres. Even if we discount for biased sample and lean season, the fall in sale cannot be to such an extent. The district administration is thus of the view that there is no effective demand for kerosene. This explanation however does not hold water in the face of critical appraisal of government’s own records, the survey findings and the reality of shopkeepers boycott as we find in section below. 2.4.2. Shop-keeper records and voices: In all we interviewed and collected data from five dealers which included all the three dealers of Kotkasim. The kerosene lifting has come to almost nil as is obvious from the following facts related to Shop number Six located at Kotkasim and managed by Gram Seva Sahkaar Samiti Ltd [Table 9]. The situation of other shops is no different.
Table: 9 : Details of Kerosene lifting and sold for Shop Number Six at Kotkasim C/F Month Lifted Distributed Balance [in litres] Sept 11 1800 1800 Oct 11 1800 1800 Nov 11 1800 1783 17 17 Dec 11 1200 252 965 965 Jan 12 500 396 1069 1069 Feb 12 0 459 610 610 Mar 12 0 321 289 289 April 12 0 180 109 109 May 12 0 108 1 Source: Records of the Shop and interview with the shop keeper on June 16th 2012.

If we relate the figure of this particular shop with the figures in the Table 8 above of the district administration our contention that the shop-keepers have stopped lifting kerosene gets amply substantiated. The district administration data suggest that lifting in Kotkasim was zero in the month of June 2010. In this particular shop by the end of May the remaining stock was just one litre. This means the shop-keeper did not lift stock in June and thus did not distribute any kerosene. The latest information suggests that there has been total strike by the dealers since last three months thus choking the supply totally. Noncooperation of shop-keepers thus seems to be primary reason for unimaginable gradual drastic decline in the use of kerosene particularly w.e.f May rather than the effective demand as is being projected by the district administration. When enquired about the reasons for decline in off take, the shopkeepers counted several of them. Non-receipt of subsidy was reported to be the major reason for lack of demand. They

also added that people are also apprehensive that the subsidy may be stopped and therefore people are de-motivated to buy kerosene or even get the account opened and/or registered with the shopkeeper. However they like district administration did not refer to their own role in the declining use of kerosene. 2.4.3 Household survey data: The survey period ranged from last week of June to July. However we gathered information from Oct/Nov 11 to May/June 12. The information was gathered on number of points from use to frequency to month-wise purchases. With regard to purchases we find that the household data by and large support the data provided by the district administration and dealers. The data suggest that the number of families who lifted kerosene from the dealer declined from around 57% in Oct and Nov 2011 to less than 18 % in the month of May 2012. There has been secular decline from January 2012 from 57.1% to 48.6% in Feb, 37.9% in March, 30.7 % in April and 17.9% in May. The pattern has been similar for all the four regions though with varying degree. In Kotkasim proper the reported decline is relatively sharper: Nov 70%; Dec 58%; Jan 65%; Feb 54%; March 41%; April 38%; May 6.8%. Thus as an impact of CFKS, the access to kerosene to poor and vulnerable has consistently declined. The above patterns of decline in demand indicate towards two dimensions - (a) gradual decline in number of buyers and (b) all of a sudden fall in the month of May compared to April. This demand pattern raises valid questions about the veracity of the above stated position of the district administration. It rather supports the arguments related to nonavailability of the subsidy in hand and other related issues in the context of point (a) above and role of shop-keepers in the context of point (b). Thus people did buy kerosene till they could afford at market price and was available but stopped when it started pinching and supply choked. The household data related to change in consumption and reasons there of lends enough credence to the points made above. In response a question, 51% of all respondents reported change in the consumption. When asked about the details of change, 17 of these 68 respondents said that they have stopped buying kerosene due to high cost and inability to bear the cost. The other reasons cited were non-availability of kerosene at ration shops [21] and long procedures and formalities. In response to another direct question about the impact, about one-fourth said that there is no impact; these are the families who perhaps do not use kerosene or are using subsidies to buy kerosene. 27.9% reported that supply/access has finally stopped [Table 10]. The other articulated aspects of impact include high price of the kerosene, non-transfer of subsidy account, extra time, wage loss, and extra day for bank operation. If we look at the Kharol village responses in the light of frequency-use responses [Table 6] we find that the responses related to overall PDS functioning and not merely to the present scheme especially in relation to access. If look at the data of Jhadka and Patan Ahir we may conclude that due to CFKS, there is no access due to cost and supply constraint.

Household responses thus not only substantiate what we have argued above but also indicate that one of the reasons for decline in kerosene consumption relate to the very design of the scheme. These points we shall discuss in more detail in next section 2.5
Table: 10: Showing reported impact of CFKS by village Village 0.0 0 NO IMP AC T IT HAS STO PPE D ACC ESS IS DIFFI CUL T COST HAS INCR EASE D MO RE TIM E IS NEE DED EXTR A DAY FOR BANK OPER ATIO N NEED ED 0 0.0% 0.0% 0.0% 1 1.5% 50.0% 0.7% 1 5.0% 50.0% 0.7% 0 0.0% 0.0% 0.0% 2 1.4% 100.0 % WA GE LO SS OTH ERS ACCESS IS DIFFICU LT+COS T HAS INCREAS ED WAGE LOSS+ COST HAS INCRE ASED Tot al

KH AR OL A

N % W % A % T N % W % A % T N % W % A % T N % W % A % T N % W % T

0 0.0 0.0 0.0 3 4.4 10 0. 2.1 0 0.0 0.0 0.0 0 0.0 0.0 0.0 3 2.1 10 0.

7 21.2 % 21.2 % 5.0 % 22 32.4 % 66.7 % 15.7 % 4 20.0 % 12.1 % 2.9 % 0 0.0 % 0.0 % 0.0 % 33 23.6 % 100. 0%

8 24.2 % 20.5 % 5.7% 21 30.9 % 53.8 % 15.0 % 6 30.0 % 15.4 % 4.3% 4 21.1 % 10.3 % 2.9% 39 27.9 % 100.0 %

1 3.0% 8.3% 0.7% 5 7.4% 41.7% 3.6% 2 10.0% 16.7% 1.4% 4 21.1% 33.3% 2.9% 12 8.6% 100.0 %

3 9.1% 10.3% 2.1% 12 17.6% 41.4% 8.6% 7 35.0% 24.1% 5.0% 7 36.8% 24.1% 5.0% 29 20.7% 100.0 %

0 0.0% 0.0% 0.0% 1 1.5% 100. 0% 0.7% 0 0.0% 0.0% 0.0% 0 0.0% 0.0% 0.0% 1 0.7% 100. 0%

3 9.1 % 60. 0% 2.1 % 2 2.9 % 40. 0% 1.4 % 0 0.0 % 0.0 % 0.0 % 0 0.0 % 0.0 % 0.0 % 5 3.6 % 100 .0%

1 3.0 100. 0% 0.7% 0 0.0% 0.0% 0.0% 0 0.0% 0.0% 0.0% 0 0.0% 0.0% 0.0% 1 0.7% 100. 0%

6 18.2% 54.5% 4.3% 1 1.5% 9.1% 0.7% 0 0.0% 0.0% 0.0% 4 21.1% 36.4% 2.9% 11 7.9% 100.0%

4 12.1% 100.0% 2.9% 0 0.0% 0.0% 0.0% 0 0.0% 0.0% 0.0% 0 0.0% 0.0% 0.0% 4 2.9% 100.0%

33 100 .0 23. 6% 23. 6% 68 100 .0 48. 6% 48. 6% 20 100 .0 14. 3% 14. 3% 19 100 .0 13. 6% 13. 6% 140 100 .0% 100 .0%

KO TK ASI M

Jhad ka

Pata n Ahir

Total

Notes: 1. N= Frequencies 2. % W= percentage to village total responses ; A= Percentage to all the villages for the column total; %T= Percentage to population total

In yet another related question we asked about the reasons for not using the new scheme to buy the kerosene. The reasons cited were subsidy has not been credited, dealer has stopped

distribution and cost is prohibitive. The only point here to be noted is that the questions of ‘subsidy not credited’ and ‘prohibitive cost’ are inter-related. Thus we find that decline in consumption of kerosene is not merely due to lack of effective demand as is claimed by the district administration but due to non-access to subsidy, added problems of more time and formalities, high cost, non-availability of kerosene at shops and so on. It would be pertinent to note that several household reported buying up to four and five litres of kerosene in the months of October and November, prior to launch of the CFKS. With the launch of scheme even the entitlement of Kerosene seems to have come down. 2.5 Reasons for Sharp Decline in reported Consumption In the preceding sections we noted that the use of kerosene has declined first gradually and then sharply in the month of May 2012 and also noted several reasons for the same. We also noted in section 2.2 that there is demand for kerosene. In this particular section we shall make an attempt to understand the nature and implications of the reported reasons. In particular we shall try to understand the social location of the CFKS and relation between articulated reasons decline in kerosene consumption and the very design of the CFKS. It is extremely important to discuss the social location of the CFKS especially in the light of findings like non-opening of accounts, people finding visit to bank and shop time consuming, the prohibitive cost, non-issuing of passbooks and demand for money by banks and their reluctance to open accounts and so on. These are structural issues that need detailed discussions. There are also some operational issues that fall in the category of management of the scheme. These issues have been discussed below under the head managerial issues. This is not to deny the fact that there has been no decline due to plugging of the leakages/diversions, which has been equally accepted by household respondents as well as the shop-keepers. However that cannot be the sole reason for sharp decline. As per our findings the predominant reason appears to be the design of the scheme which has choked the supply of kerosene including for the poor and needy. Below we discuss the issues in detail that are responsible for the sharp decline. 2.5.1 Structural Issues: (i) Compulsory Bank Accounts: Main structural Issue Possession of 14-digit no frill account is central to the scheme. However, our assessment study suggests that people do not have a need to open an account. Many may have been persuaded to open, but do not find much utility. Bank account related data from different sources reveal that (a) despite best efforts of the district administration only about 60% eligible household opened the accounts by the end

of the pilot, (b) only roughly one-fourth families reported a bank account prior to scheme, (c) when asked about the necessity of the bank account, a good number said that it is needed for subsidy. Over fifty present reported to have opened accounts just for subsidy i.e. as part of CFKS on persuasion of the district administration, (d) people did not open accounts also because of time consuming process, difficulty of process, illiteracy, and lack of awareness and need, (d) many who had an account reported that first going to bank and then to shop is time consuming meaning thereby that operating account is not the effort worth taking (e) many others directly questioned the very need for it. One dozen respondents asked, “when earlier it [kerosene] was available without bank account than why now all this’?, and (f) the dealers who facilitated camps for opening bank accounts said that people were disinterested in opening accounts. It is obvious thus that majority of the households do not have any need to open a bank account. The reason is not difficult to locate when we look at their socio-economic profile. Their net worth, the way they are living and their economic life is operating, opening a bank account is not only ‘not necessary’ but in fact is perhaps ‘a drag on the limited resources’. Operating a bank account is an ‘imposed burden’ on them. This thus appears to be the primary structural issue with the CFKS. Let us examine this in more detail in the context of process of implementation of the present pilot. Bank account for each ration card holder being a prerequisite under CFKS, the implementation started with collection of bank/PO account details through the ration dealer. Soon it came out that most card holders do not have an account and that Post Office account is not suitable. So people were asked to open accounts. But that did not bear much result as by end of December 2011, the month of the lancuh, only 6000 accounts could be managed. Since majority of the people did not have any bank account and to get people to open accounts, the provision for no-frill (zero balance accounts) was planned. Around the same time in December 2011, Rajasthan Grameen Bank (RGB) was looking to open such zero balance accounts in their ‘financial inclusion drive’. The government spoke to them and also the other two banks which had branches in Kotkasim - State Bank of India (SBI) and Punjab National Bank (PNB) for opening of zero-balance accounts for smooth implementation of this scheme. Camps were held in many areas inside Kotkasim block by RGB in December 2011– January 2012 and then again in March 2012. In some places PNB joined in these camps with RGB to allow for wider opening of such accounts in their branches as well. SBI however did not participate in the camps. The process details suggest that the response of the people towards bank account was not very encouraging initially. This made the administration jittery and persuasive. It is alleged that even threatening strategies were used by the administration to get the accounts opened. For instance, the dealer of Village Pataliya explained how he was being mistreated by the DSO to procure account numbers from his customers. In fact, one common thing reported throughout the survey was the way the consumers were harassed by making ration (including wheat) conditional to the submission of account number. The dealers who were the agents of this harassment acted on behest of the DSO. Almost every order of blackmail

is alleged to have been from the DSO which the dealers carried out to ‘extract account numbers' or to ‘exhort the people to act to open an account’. Despite all these efforts till date only 15,020 accounts could be opened/registered i.e 61% of eligible households. Two-fifths of the households thus continue to be out of the ambit of the CFKS and stand deprived of kerosene for ever perhaps. We could not get a clear answer from the department as to why other accounts have not been opened. Who are these people and why have they not opened the accounts. In a specific question to the DM, it was stated that ‘it could be due to migration’. Our survey data suggest that there are several reasons for this besides migration like old age of head of the household, indifference to the scheme, lack of awareness about the scheme and so on. But primarily it is lack of necessity and paltry sum of subsidy is no motivation. The household data about the bank accounts further substantiate what we have stated about the need of the bank accounts. As per the household data, a good number of which are from headquarter Kotakasim which is more like a town and has three bank branches, only 25% household reported that they opened bank accounts between 1987-2012 for various purposes like savings, pension, loan etc. suggesting that not more than these many households really have a need for bank accounts. The data further suggest that 15.7% households even now do not have any accounts and rest 59.3 % households opened account for the purposes of subsidy only. One important reason for the people to not to go for accounts is the cost involved in operating the account. For people of Kharola, for instance, a visit to designated bank entails expenses of Rs 40/- [Rs10 from Kharola to Khairthal and Rs10 from Khairthal to Harsauli]. If they choose to walk they lose day’s work. Moreover, there is no such guarantee that the work would be satisfactorily completed in the bank. The subsidy amount being received does not account for such opportunity cost in terms of transport charges as well as the wage and time loss. Thus villagers cannot even afford to make trips to bank regularly to check on their accounts or pass books due to the distance and the cost by way of loss of opportunity/wage/time and the fare involved in reaching the bank. Mere opening of account is not sufficient. Because of persuasion and the camp at door step, almost all in the village Kharol have opened accounts. But none of them have operated the accounts. In fact they have not even received their pass books. If they do receive their passbooks one day, they will still not be able to make trips to the bank to withdraw subsidy and they may not be in a position to buy kerosene at the high cost. If the feedback mechanism does kick in, they will one day stop receiving the subsidy as they will not be buying kerosene – effectively having been driven away from the PDS and written about in the media as ‘not in need of kerosene’. We conclude this discussion with a quote from one of the social activists, “A poor cannot wait for subsidy to be deposited in bank. No poor would like to get entangled in issues like where and when the account will be opened, when the money will be deposited and how and when the money will be withdrawn. Rather than getting into these questions the poor

will stop buying kerosene. The Government is well aware of this reality and by introducing the pilot Government’s intent is to deprive the majority access to kerosene” [Aaj Nakad, Kal Riyayat]. In this situation both economical and moral and ethical questions emerge. Economically opening an account means putting an additional burden on the poor families in terms of opportunity cost in particular. Moreover, forcing a person to do otherwise for a benefit of say ninety rupees a month cannot be justified ethically and morally. Because such an ‘imposed burden’ coupled with inability to resist or protest only makes a person totally withdraw from the situation. And that is what was prominently visible during the study in places like Kharol and among households like that of Subhash [See Case Number 1]. This we consider as a major structural issue. (ii) Banks are forced to work against the very basis of their existence: the market economy: The CFKS puts undue burden perforce not only on the poor and vulnerable hapless households; it also puts undue strains on the banking system itself. The fact of the matter is that no commercial bank would by choice agree to participate in the scheme and open accounts. Says the DSO, “Banks are not supporting us, SBI has said clearly no to continue this scheme with their bank”. If we look at the distribution of accounts bank-wise it would be obvious that most of the accounts are with RGB [76.2%] and the two commercial banks [SBI and PNB] between themselves share very few accounts [23.8%] despite the fact that out of total nine branches five are of the two main commercial banks and only four of RBG. The reason for this is simple, the banks work on the logic of market economy and the accounts under the CFKS defy that logic. The problem is thus structural. In a market economy when the Government herself behaves as well as wants everyone else to behave in tandem with market rules, it is extremely baffling to find Government pushing banks to behave otherwise without any compensation. This basically means that Government by dictate is passing the new created burden on to the banks. Which bank would be willingly to offer such a facility and arguably for what? The solution perhaps lies in some new kind of subsidy for banks. The banks reluctance to serve these no-frill zero-balance accounts holders has been articulated by several respondents in Kotkasim. People having their accounts in SBI complained that their passbooks are never updated. When they visit the branch and the bank official realizes that the account is a zero balance account, they are made to wait endlessly for withdrawal of subsidy or even updating of passbook. They are unwanted consumers and are treated as second grade citizens. During discussions with the survey team the bank manager of SBI Kotkasim agreed that it was not feasible to provide workforce to service these zero-balance accounts. He conceded that once during initial period they had even had sent back a list from DSO to whom subsidy was to be transferred manually by entering details into computer for every customer. So the experiences of the account holders at SBI provide testimony to structural issue. Similarly in Kotkasim it was

reported that banks are asking for a deposit of Rs 500/- for passbook and transactions. In Kharol village bank has not delivered the pass books for last several months now. All these show how reluctant the banks are to serve the poor and vulnerable. (iii)Vulnerability of the head of household: Other important structural problem that acts as stumbling block in effective implementation of CFKS relates to vulnerability of the head of the households in relation to bank accounts. The vulnerability emanate on several counts like old age, single woman, high opportunity cost like lack of time, wage loss and illiteracy to effect bank transaction, humiliation in the process of bank transaction and so on. Field survey reports that in case of 29 % families head is more than 60 years old to 86 years old. This creates problems in opening the account as the account has to be in the name of the head because many are too old to move and are not inclined to open an account. We consider these problems structural because they emerge due to structural change in the existing system. Unable to cope with the new structures means denial. Thus vulnerability becomes means of denial. (iv)Design of the scheme: Table 11 provides details of total cards, entitlement and requirement of kerosene. The point to be noted here is that just by introducing the scheme, the requirement of kerosene has come down from 84 thousand litres [allotment prior to launching of the scheme] to just 70, 727 litres- almost by 20%. The other point to be noted is that only about three-fourths of the eligible households have opened accounts and therefore the effective requirement of kerosene stands reduced to 44,040 litres, roughly half of the pre-launch allotment.
Table : 11 : Distribution of total cards by Kerosene Eligibility Numbers Kerosene eligibility 25,843 1,239 3,085 21,519 [83.27]@ 24,604 [95.21]@ 15,020 [61.05]#

Type of cards

Required in lts 0 6,170 64,557 70,727 44,040

Total Ration Cards HH with DBC HH Single Gas Cylinder HH without gas Total card holders eligible for kerosene Total accounts opened

Not eligible Entitle for 2 Ltrs Eligible for 3 Ltr

Assumed: 42,000 without gas and rest with single gas @ percent to total cards # percent to card holders eligible for kerosene

The other design aspect relate to pricing system. There was a change in the rate of kerosene from Rs 15.25 to 44.50 per litre w.e.f. the month of December 2011. Under the scheme the card holders had only one choice to buy the kerosene at the ‘market price’ by utilising the subsidy transferred to their bank accounts.

This increase in the price was done without having put the system in place like awareness among the beneficiaries, functioning bank accounts for all, and issuance of pass books and transfer of subsidy. Only then price should have been increased. Our survey very unambiguously reveals that nothing had happened like this. It seems this all was perhaps part of the design. 2.5.2 Managerial Issues: (i) Bank account related problems Bank related issues are both structural as well as managerial. Structural issues we have discussed in Para 2.5.1. In this section we shall make an attempt to highlight the managerial issues based on our field study. Accounts not opened: As we noted earlier only 15,020 accounts constituting about 60% of all eligible households have been opened. And several among these are duplicate i.e. more than one account for one family or the same account has been counted twice. The actual number of households without an account thus may be large. For instance one of the shop-keeper out of 34 identified six such accounts in whose same number account subsidy was credited twice. This list was provided to the DSO. Similarly there are also households who gave two different bank account numbers. Thus, effectively how many households have the banks accounts is difficult to surmise. If we go by the details provided by Shop no Six in Kotkasim the actual number may be much less. For instance, the Table:12a : Details of Bank Accounts for Shop No Six, Kotkasim shop number six reported APL BPL SBPL AAY TOTAL Cat/Bank 636 registered ration cards 557 31 30 18 636 Total Ration Cards holders out of which only 212 24 18 15 269 With 14 digit Account 269 families reported bank 121 8 2 5 136 account [Table 12a]. This Bank: SBI 88 16 16 10 130 comes to only 42.3%. If we Bank: RGB into account the 3 0 0 0 3 take Bank: PNB information related to four 38.6 66.7 60 83 42.3 % of accounts shops then too the situation Source: Shop keeper’s records appears to be the almost similar -48.43% [Table 12b]. It is obvious therefore that there is mismatch in the account data given by the administration and provided by the shop-keepers. In fact shopkeeper data related to all the Table: 12b: Account holders details shops of Kotkasim APL BPL SBPL AAY TOTAL Sl no Shop where there are three KK-nirmala 167/555 50/64 65/74 25/34 312/728 1 bank branches, oneKK-6 212/557 24/31 18/30 15/18 269/636 2 third of the total nine, kk-dharveer 235/566 3 present the same 28 pat 402/564 8/8 12/12 17/17 439/609 4 picture that of shop 1255/2539 Total number six- about 42 48.43%

per cent [816 out of 1930]. Compared to overall rate of 61% of reported bank accounts, the little over 42% in Kotkasim only suggest that there is mismatch beyond comprehension because ordinarily the percentage of account holders should have relatively been more in Kotkasim. This puts the figures of accounts in the realm of suspicion demanding more detailed understanding. There are several reasons for not opening the account. According to the dealers one of the de-motivating factors for the poor and needy not to opt for opening an account is experiences of non-transfer of subsidy. Death of the head of the household: In some cases the head has died and since the Ration card continues in the name of the head account opening is difficult. This one of the reasons cited in the PIL filed by the elected representatives. To quote: “Many main persons of the ration cards have expired and hence the bank accounts on the basis of such existing ration cards are not possible and the persons who are not able to open the bank account would not only be deprived of cash subsidy but the distribution of kerosene to such consumers will also be hampered, more particularly when no instructions whatsoever have been issued for such consumers,….” [PIL, Para 8 (c)]. Lack of sufficient bank branches and man-power: Distance of bank from the beneficiary: Study suggest that location of banks were never taken into planning for the scheme in question despite the fact that bank facility was a crucial element of the scheme. There was no mapping done of the banks available and requirement. Even available easier options were never explored. Camps were held only in designated areas within Kotkasim. So in the case of Kharola, for instance, the designated bank was in Harsauli which is 10 km away by pucca road and 6 km by kutcha road rather than Khairthal which is 3 Km away by road and 1.5 km by kutcha road and has an excellent banking system - linked by internet. The software only requires 14-digit bank account number which can belong to any bank but in spite of all this the option itself was not provided to the villagers. Distance for Kharola people acted a powerful de-motivating factor as it needs time and money resource to operate bank account. Also lack of branches adds to the time taken for transaction due to overload. Overall the bank as middle man more than wipes out the subsidy benefit forcing people to decide against joining the scheme. The banks too were not prepared to undertake the work-load. Therefore the banking system has become un-responsive for no-frill account holders. It would be pertinent to note here that commercial banks in the area namely SBI and PNB are literally not very enthusiastic about the opening of no-frill accounts with transactions worth few hundreds once in a while. Non-delivery of passbooks and asking for minimum balance:

It has been reported in several cases the bank has opened accounts but the pass books have not been given. PNB and RGB at Harsauli have not delivered passbooks even after 2-3 visits and lapse of several months [See Box: ]. The banks had promised to post passbooks but did not keep the promise. This fact is known to DSO office, the implementing agency. However they are helpless to do anything about it. Confess the officials to the research team, “We usually get complains that banks has not given passbooks to zero balance account holder to costumers but we can’t intervene in banks matter”[Annexure 1(vii)].

In some places banks are asking for money to be deposited in the bank before handing over of the pass books. Deposit of Rs 500/- was asked for by RGB and SBI at Kotkasim.
The fact that these consumers are buying kerosene at a high rate and are unable to get bank services means they are not effectively ‘receiving’ subsidy are being driven as ‘non-users’ finally.

(ii) The problems related to payment of subsidy: The question of subsidy payment is equally crucial to the scheme. Though it is related to bank account, but its importance lies beyond that. The opening of bank account is important first step, but the scheme gets operationalized only when the money reaches into the account. However there are several problems that elude subsidy to reach the consumer. Table 13shows the details of the subsidy deposited till date. Total subsidy paid comes to 63.14 lakhs. All the 15,020 registered account ration card holders had been paid a sum of Rs 38/- lakh in first installment and 9804 households have been 25.1 lakh second time. What is the basis of payment of second installment is not known. The rest have not been paid as yet.
Table: 13: Showing distribution of subsidy No of Subsidy Amount Subsidy Amount Total accounts Dec 11 to Feb 12 March 12 to May 12 Subsidy 2 3 4 5 6 7 8 RGB 11456 11456 2905669 7595 1965225 4870894 4* 76.27@ [253] [258.75] PNB 2326 2326 576978 2209 545855 1122833 2 4* 15.62@ [248] [247] SBI 1238 1238 319874 0 0 319874 4 1* 8.24@ [258] 15020 15020 3802521 9804 2511080 6313601 Total All Banks 100 [253] [256] *=Number of branches in Kotkasim; @=percent to total accounts; Source: DSO Letter to Principal Secretary Food, Jaipur No rasad/2012/873 dated 24-4-12 Sl No 1 1 Bank

However there are several other problems related to subsidy. One, the Table 13 shows that first installment of subsidy has been provided to all the households who opened the accounts. However during the course of our survey several households reported that subsidy has not been deposited in their accounts. The same problem was reported by the shopkeepers as well as representatives of the people.

Second, several households reportedly received subsidy twice in the same account. Third, there are households who provided two different accounts number and thus got the subsidy twice. Fourth, there is another problem with the subsidy amount related information. As per the Table above total subsidy paid comes to Rs 63,13,601/-. However in reply to the office of the adviser’s queries it was reported that the subsidy paid till July 17, 2012 is 52.5 lakhs. There is a difference of more than ten lakhs in the two set of information provided by the same source- district administration. Both are authentic in the sense that one is a letter by the DSO to Principal Secretary and one is in reply to the question by the Adviser to SC commissioners. One fails to understand how to account for such discrepancy except for the fact that there is gross mismanagement of the scheme. Finally, the subsidy amount which should have been received by the district administration for distribution has been eluding for months. As per a letter written by the DSO to Principal Secretary Food to government of Rajasthan, about 5000 ration card holders have not been paid second installment of subsidy because this reason and requested to provide the subsidy money. A few days later remind followed. But till last information received, subsidy amount has not been received. Overall we find that the question of subsidy appears to be as problematic as that of accounts [Annexures---]. But the difference is that the question of accounts relates to beneficiary household, the question of subsidy payment is entirely dependent on the administration. (iii) Relation between subsidy and kerosene use: Our survey started in the month of June 2012. By this time the process of transfer of second installment of subsidy had been completed. As per the information provided by the district administration till then all the households who had Jhadka 20 20 opened accounts had been provided first Patan Ahir 26.3 3.3 installment of the subsidy and another roughly Total 17.3 7.1 65% of account holders have been provided second installment [See Table 13]. The rest were not provided second installment because there was no subsidy available.
Table: 7: Kerosene Subsidy (% families) Village I time II time Kharola 0 0 Kotkasim 22.4 8.9

Our field survey however presents a different picture. In all among sample households only 17.3 % reported having received the first installment of the subsidy and 7.1% twice [Table--]. The highest percentage [26.3%] is for Patan Ahir village. In Kharol not a single person reported to have received subsidy. The reason is that the passbooks have not been given to the residents of Kharol. In fact, the subsidy may have been credited in their accounts but they may not be aware because they have not received the pass-books. The point we wish to make here is that ‘de facto’ the subsidy continue to elude large number of households. Lack of timely subsidy therefore appears to be one important reason for decline in use of kerosene.

Thus, the CFKS turns out to be a scheme wherein the consumers can buy only at a high rate of Rs 44.5/ litre. People did it initially but finally due to non-receipt of subsidy in hand and other reasons were totally de-motivated to buy kerosene [A more detailed analysis of this is in section 2.4]. It would not be exaggeration to say that out of four areas, one area, the village of Kharol stand totally denied of the Kerosene for the particular reason of subsidy. Therefore any conclusion drawn about the scheme on the projected district administration data of kerosene use can only be termed as based on ‘denial by design’.

III: IMPLEMENTATION OF THE SCHEME: DISCREPANCIES AND VOICES OF STAKE HOLDERS

PROCESS ,

ROLES,

This section provides details about the nitty-gritty of implementation of the scheme. 3.1 The Timeline and the Process: The district administration protocol as discussed in Section 1.4 is quite broad and does not specify details. Due to lack of detailed guidelines there were quite confusion and no one was clear as to when to do what and how. Many of the important instructions were issued orally to shop-keepers. During the course of the survey work we therefore tried to enlist process details of implementation of the scheme. Since the main actors were the shopkeepers we did prepare a time line in consultation with one of the most meticulous shopkeepers who kept records and followed instructions to the core [ Table 14]. A preliminary analysis of the Table suggests that the process started some time at the end of November 2011 and by March it almost lost way. As end result, the kerosene is not available for last many months now. Other important points that emerge are: (a) Main implementing agency from administration side was DSO office. Main job of implementation was done through the dealers like collecting account details, confirming payments, getting MIS forms filled-in, getting subsidy amount checked, getting accounts opened and so on; (b) Most of the instructions were issued orally by DSO. For instance they were asked to gather PO account details and open PO accounts and then asked for 14-digit bank accounts, verify subsidy; (c) The linkage to UID was dropped right in the beginning as it does not get referred to anywhere; (d) District administration was not clear as to what kind of accounts have to be opened as new accounts were opened in post office in the first week of December with fifty rupees. The Post Office accounts were accepted initially and later abandoned;

(e) Pressure tactics were used by the DSO with the shop keepers to gather account and opening as well. This basically means that the people were not inclined to open accounts of their own choice. (f) The details and table clearly suggest that the protocol was not followed. There was no preparation prior to launch of the pilot. It was launched without preparations. For instance bank accounts and MIL info were not collected even by end of December. (g) The Table also show that there was resistance from the side of the people to open accounts or give details of the same as well as there has been non-cooperation by the dealers.

Table: 14: Timeline with process details of CFKS S N 1 Date/Perio d End of November 2011 Process detail DSO asks all ration shop dealers to collect the account numbers for implementation of this new scheme and also gave him or her strict order to not give ration to people without taking the account details from them. Simultaneously DSO also ordered the secretary of the village to collect the bank details from the villagers. NOTE- there was no written statement given by DSO, it was just conveyed to all the dealers in a meeting Account number collection done by ration dealers in 1-5 wards in Kotakasim. Collection of bank accounts which included accounts - POST OFFICE, SBI, and GRB and PNB. This collection was done before the scheme started. In this period new accounts were also opened in post office by giving Rs.50. 3 December 2011 2nd weekDecember 3rd week DSO ordered all the ration shop dealers to remove the names of people who are having accounts in post office. Ration shop dealers submitted a list of bank account numbers which included only numbers of SBI and RGB. There are 728 ration cards in ward 1-5 out of which only 174 account numbers were given to DSO. During this period new order came from DSO to ask people to open new accounts. There was a camp organized and zero-balance no-frill accounts were opened. DSO asked dealers to get a form filled to get the details of the ration card holders mainly the bank account details. People in the village were very sceptical with the new scheme and also for disclosing the bank account details so DSO did a meeting with all the ration card holders and asked some solution to get the account numbers. It was suggested that if villagers were told that new ration cards are being made they will give all the details without any hesitation. Total form given – 1000 to each dealer. Out of which only 308 were filled.168- APL; 50- BPL; 65-SBPL; 25-AAY by the concerned dealer. The MIS process begins with this. Forms were submitted to DSO. And also with the forms list of new account holders and new account numbers which dealer collected from villagers were submitted. The list was characterized into four categories APL, SBPL, BPL, and AAY.

2

December 2011 1st week

4

5

December 3rd week January 2012 -1st week

6

7

January 2012 -2nd week

8

January 2012-3rd week January 4th week March 1st week March 2nd week March 2nd week After March 2nd week

Ration dealers got a list of money deposited in few accounts. List was provided to them by DSO office. DSO gave an order to check the list. In the list it was found people with DBC and SBC getting RS.263 and also few people getting subsidies twice. Dealer submitted a list of mistakes to DSO office. But it was told by dealers that matter was not looked into. Ration dealers submitted a list of all the people who purchased oil in the month of Dec – Jan – Feb, after the new scheme was launched. DSO did not give a list of account numbers in which money was given second time like DSO provided it in January. This was told by ration shop dealer during the investigation. Due to this ration shop dealers did not get to know who got the money and who did not. Dealers also submitted a list of people who did not receive subsidy amount. The list contained 103 households from one shop. This list contained those names which people used to come and tell dealer about not getting any subsidy. Dealers did not submit any list and did not got any list from DSO. In March, April and may people purchased oil but there was no proper record of those people with the ration dealer. And also it was conveyed by dealer that for the month of March, April and May there was no list provided by DSO of who all got the advance subsidy.

9 10

11

12

13

Note: This is timeline and process details have been constructed based on the discussions with ration dealer in Kotkasim primarily Ms Nirmala Devi. This time line is supported by relevant documents which runs into several dozens of pages.

In addition to the above timeline information as given in the table, dealer also provided some important information which is as followsTowards the end of December 2011 there was an order from collector to DSO to deposit subsidy amount in available accounts. So the list which was submitted at first time to DSO before the launch of scheme which also included people who have never bought kerosene Rs.263 was deposited. Before starting the scheme the account number list was also noted down by secretary of village as he was also asked to note by DSO. So due to this few account numbers were noted twice. This led to double entry of subsidy. 3.2 Post office Savings Accounts: The District Administration goofs: During the course of survey we were informed by the respondents as well as the shopkeepers that in the months of October/ November 2011 people were asked to open accounts in post offices or give their numbers if they already have an account. The dealers collected the numbers and forwarded the same to the DSO. Later the administration ‘realised’ that such accounts were not linked through internet (Core Banking System – CBS). Thus again the people were asked for 14-digit bank account numbers and not post offices. In the process people lost time and money. They lost money because post offices required a deposit of Rs 50, everyone had to shell out this amount. Because of this goof-up people not only lost their valuable time but also cash.

However, when we asked the district administration they denied about the Post Office accounts. 3.3The Elected Representatives oppose the Scheme: The administration claims that there is no opposition from any one to the scheme. But the fact is that the MLA and all the Sarpanchs, the elected representatives have opposed the scheme so much so that having failed to get positive response have filed PIL in the Rajasthan High Court against cash transfers scheme. Also, all the Gram Sabhas have passed resolution to close this scheme [Annexure 3]. As early as January 29, 2012, there was a meeting of elected representatives including MLA of the area and the Sarpanchs on the issue [Aaj Nakad, Kal Riyayat]. 3.4 Shopkeepers want the scheme to wind up The shopkeepers have given memorandum to SDM and DM to restore the earlier position as the pilot period is over. Ration dealers are perhaps the unhappy people with the scheme. One cannot blame them because they are perhaps the worst hit by the scheme. Their investment has increased, incomes have come down, have been bullied and harassed by the administration, have to face the wrath of the consumers and their paper work has increased considerably. Due to CFKS, in the first place, dealers have to use three times the money to buy same amount of kerosene. So their investment cost increased three times. Simultaneously on the other hand income of the ration dealers has come down due to sharp decline in the sale of kerosene. They get 90 paise per litre commission on the sale of kerosene. Sale used to be around 2000 litres prior to launch of the scheme. Now it has come to almost zero in case of some dealers. In addition to this their work load increased substantially. They have been asked to maintain details of accounts in the register, prepare various kinds of lists like details of bank accounts, list those received double subsidy, list of those having gas, list of those who have not received subsidy, take complaints of the consumers, sending information to DSO on kerosene consumption, sorting anomalies in account numbers and subsidy transfers, in one case even helping to fill forms for the opening of bank accounts, getting MIS form filled-in and so on behalf of the administration.
Box: 1 : Work Burden on Ration Dealers The dealers in Kotkasim were given a list of accounts which had received subsidy so that they could cross check and make a list of those buying kerosene but not getting subsidy. This information was for the whole panchayat combined, it meant an effort on the part of the dealers to scan though all the lists and select information which pertained to their customers. The only dealer in Kotkasim who was complying with this procedure, Nirmala said that the DSO was not acting upon the information which she had sent in this regard – the people who were to receive subsidy still hadn’t got it. Researcher’s Notes

Also the DSO has forced them to resort to pressure tactics especially regarding bank accounts. They in order to get the bank account numbers from the consumers were asked by the DSO to link the delivery of ration to bank account information. Consumers were denied ration until they furnished bank account details. The dealers complaint that harassment and disrespectful at the hands of the DSO has made their lives more burdensome. These kinds of pressure tactics made them face the anger of consumers. They have lost peace in the process. For all these reasons they demand closure of the scheme and were on a call for strike in June 2012 protesting against the scheme demanding the scheme to be scrapped. They had threatened to extend the strike to other items as well. The last time the DSO met the dealers on 19 June in the presence of the survey team wherein promises were made to start sale of other consumables in the shop in addition to the salt, sugar and wheat flour of Raj brand. It was envisioned that this would increase the commission to the same amount as they would have been earning initially through black marketing of kerosene. The official demand though was that commission per ltr be increased 3 times (since the cost was also increased thus) to Rs2.70. 3.5 Contradictory positions of the administration Discrepancies have also been noted in the records of district administration itself as well in the records and the discussion with the staff of the DSO office. The document provided by the district administration at one point says that ‘Not any section of people have expressed slightest of resentment, against the scheme of cash subsidy, despite being fully aware and informed about the execution of project for last about two months”. Simultaneously on the other hand it says that the shopkeepers were agitated because of loss in their incomes and also that there are about 5000 consumers who are agitated due to non-payment of subsidy. One of the most important contradictions is in the context of the selection of the tehsil for implementation of the pilot project, Vide letter D.O No. F30(3)FS/Kerosene/2011 dated 811-2011, the food secretary of Rajasthan wrote to the Addl. Secretary, Ministry of Petroleum and Natural Gas, Govt. of India that "A pilot project will be started in Tehsil Laxmangarh of District Alwar where maximum coverage under Aadhar UID has been made. Almost all other eligible beneficiaries have bank accounts". However, the pilot was launched on 5 December 2011 in Kotkasim tehsil, Alwar. It is not known as to how, why and by whom the tehsil for the pilot was changed all of a sudden from Laxmangarh to Kotkasim. It specially sounds baffling for the reason that Kotkasim was not prepared for this pilot as even after the efforts of the district administration, only 6,000 (24.3%) of the eligible 24,604 beneficiaries had bank accounts till Dec 2011 end whereas in Laxmangarh "almost all" had bank accounts. The same D.O letter also says "Advance transfer of cash subsidy shall be made for first quarter and from the next quarter onwards, cash subsidy will be linked to the quantity of Kerosene lifted in the said Tehsil during the corresponding month in the previous quarter".

However the survey findings suggest that this stipulation of this scheme stands completely violated on the ground and in effect the very purpose of the scheme stands defeated. The Food secretary in a letter to the collector of Alwar on 28-11-2011 talks of the conversation they had in which the collector of Alwar had informed that the bank/post office account details have been collected in the consumer week of 21-28 November 2011 whereas by December 2011 only 6000 accounts were opened and by June 2012 only 15020 accounts were opened out of over 24,000 cardholders. On the same day 28-11-2012, the Principal Secretary also informs the GM, IOC that the “Collector, Alwar has already ensured necessary arrangements including collections and digitization of the Bank Account Number of the card holders” which is simply misinformation at the least and blatant lies at the worst. In a reply to questions written to the Collector Alwar about the scheme, the advisor to the SC Commissioners for Rajasthan received the information that “Post Office A/Cs were not opened by this office…….very few card holders were having P.O. A/C’s and they insisted for depositing subsidy amount in P.O. A/C’s”. In the same reply from the Collector, Alwar it is said that “First installment of subsidy was deposited for the month of Dec. 11, Jan. 12 and Feb. 12 in subsequent phases……….For the next three months i.e. March, April and May 2012 subsidy was deposited in the same A/C’s” whereas the protocol issued by the DSO (attached as an additional affidavit in the PIL of Annexure 4) calls for conditional transfer of subsidy on a monthly basis. 3.6 Discrepancy in the official and other stake holder’s versions: On several counts we noted marked difference in the versions given by the district administration on the one hand and the consumers, elected representatives and shopkeepers on the other. It relates to issues like opening accounts in the Post Office, subsidy, use of kerosene, assessment of scheme, role of banks, opposition to scheme etc. Oblivious of the ground reality the administration is rejoicing the success. The sharp decline in kerosene use is considered as result of plugging leakages and curbing corruption. The other stakeholders view this scheme as disaster so far as the access to kerosene to public is concerned. Even the Food department officials do not agree with the official version. They also consider this as anti-people scheme. Moreover, the administration is countering several of the issues raised by the different stake holders. For instance, administration says that they took in confidence everyone while the elected representatives deny that. In the PIL filed by them they state, “That none of the public representative was called for meeting or ever discussed” [ Annexure 3 (e)]. Also says the local MLA Ramhet Yadav, “Before implementing the scheme J C Mohanty had promised that opinion of the people’s representative would be taken into account but with

implementation all from Collector to Pricipal Secretary showing ‘indifference’”.[Aaj Nakad, Kal Riyayat]. 3.7 Missing points Prior to launch there were several aspects which were not taken into account. For instance the impact on shop-keepers was not properly evaluated and bank spread and people’s social need for financial inclusion were not assessed properly. Because of lack of understanding of these social concerns the scheme has not found favour with the stakeholders. 3.8 Feedback loop: The dealer sends information of consumption per account holder for the past three months to the DSO so that subsidy can be discontinued for those not regularly using kerosene. This loop was not functional in all the areas. Out of the five dealers covered under the survey, two of them were taking the pains of sending the information while the rest were not doing so. One of the dealers had agreed to the fact that he was refusing kerosene to customers as they did not have the account number written on the card which was only a matter of convenience to the dealer so that he could easily make entries for consumption. There may be truth in the statement that the dealer makes that people were disinterested. This disinterest he says he had observed even during the time he had gone to the village to get accounts opened.

IV: CONSUMERS FEED-BACK ABOUT THE CKFS
4.1 Problems in PDS: In response to a question about the functioning of the FPS, most of the respondents complained of bad quality of goods, inappropriate behavior of the shop-keeper, refusal to provide goods. The un-cooperative behaviour of the shop-keeper appeared to be a major problem. 4.2 SKFS is bad and should be closed: In one of the question we asked the respondents to rate the scheme on five categories – very good, good, satisfactory, Table: : Peoples rating of the scheme by village [in %] bad and very bad and cite Kharol Kotkasi Jhadka Patan Total Rating reasons for the answer. The m Ahir responses have been 36.8 28.6 33.3 27.1 Good clubbed in three categories 21.4 5.6 7.1 14.0 Satisfactory 5.3 [Table--]. The data very 57.9 50 61.1 92.9 58.9 Bad 19 56 18 14 107 Total (N) clearly suggest that the majority who responded are not happy with the scheme. This figure however is deceptive because the majority of those who said that the scheme is good said so with a rider. Some of the typical explanations of good are given in Box below. This basically indicates that the question of subsidy has been really a problematic.

Box: Statements of reason about satisfactory and good  It is good if money is transferred  The scheme is good as long subsidy being transferred  the scheme is satisfactory till the subsidy is  The scheme is satisfactory but it needs many rounds to bank  It would be good if we get money  Its good but subsidy amount is not delivered on time  Its good, people are happy but continuity of subsidy is a problem

There are some other interesting reasons for calling it good. Says one respondent, “it good scheme but amount should be deposited otherwise its cheating with customers”. Says another, “If government can promise to deposit money on time then OK, otherwise closedown”. These statements basically suggest about credibility crisis of the scheme. Indeed there have been some select responses which consider the scheme to be really good and the reasons cited are (a) it has decreased the black-marketing, (b) no one else can take our quota of kerosene oil and (c) there is saving in the bank. This last point again is problematic for the simple reason that the subsidy is not savings. It seems that some of the respondents are not very clear about the scheme. They may not be real users and are perhaps under the wrong impression that they are getting subsidy which can be part of saving without knowing that it would be adjusted if not used in buying kerosene. Alternatively the men who control the account may take it as their savings oblivious of the necessity of using the same for kerosene purchase. The question of subsidy being part of savings in the bank does not make a sense otherwise except for the families which are relatively better off who can afford to buy at the market rate. In conclusion we may say that overall the experiences of the people about the CFKS are extremely negative and majority does not want the scheme to continue. Whereas several respondents directly stated that it should close down, several others obliquely referred to it by citing the problems. One section of respondents said that the scheme is affecting the poor negatively, some others said that now lot more money is required which cannot be arranged and that the procedure is now problematic and time consuming. It is time consuming because first one has to go to bank and then to shop and there is no guarantee that work would be done in one round. Moreover, the fact that several respondents have complained of procedural and time related problem clearly indicate that the CFKS is turning people apathetic towards the kerosene consumption, the point we have already made earlier. In yet another question we asked directly weather the scheme should continue or closed down or modified. Out of total 88 responses 66 [75%] categorically said it should be closed down; six said improve or close down; six were in favour of continuity without any rider and wanted other items to added; nine said that it should continue but wanted banking should to be easier and less time consuming.

Box:         It should continue – N=5 Should be closed down, no subsidy on time, difficult to pay that much on time N= 52 It is not maintained properly then it’s better to close. At time we don't get money to buy the ration. N= 6 Scheme should be continued and other commodities should be added. In scheme and in government people have faith N=1 Close down because it takes time and it is wastage of wages of the day N= 13 continue but banking system should be easy and less time consuming . N= 9 if subsidy comes on time and information about subsidy transfer is available easily then it can continue . N= 5 Yes, close down, lady, the head is blind unable to go to bank. N=1

The mandate of the people is thus very clear: Close down the CFKS. 4.3 Emphatic no to cash for other items under PDS: Given the present experience we also asked the respondents about extension of such cash transfer scheme for other PDS goods. In a response to specific question on this count, overwhelming majority of 95% said they don’t want cash for anything else.

V: CONCLUSIONS AND SUGGESTIONS :
“Due to scheme consumers are suffering, most have stopped taking kerosene” Food department official at Alwar. 5.1 Conclusions

Kerosene is no more available in Kotkasim: The scheme was started in Dec 11 on pilot basis for six months. By the end of the pilot use of ‘kerosene’ stands reduced to almost naught. In fact last three months there is no lifting of kerosene. The dealers are on strike. Three months extended period has also expired. For the people of Kotkasim availability of kerosene at PDS is a history now. Various factors, most importantly the cost hike and lack of ready access to subsidy gradually adversely affected access to kerosene so much so that by the end of the period the sale of kerosene has completely dried up. SFKS is imposed, no one wants it: In our understanding the scheme is an imposed one from above. At ground level CFKS has not found favour with the different stake holders like consumers, elected representatives, ration dealers, banks, and DSO office for various reasons discussed in the report. CFKS loses total credibility:

Worst part is that because of the pilot, the credibility of the CFKS has been hit adversely and it may be difficult to restore the same. The loss of access to kerosene may be forevergiven the insensitive bureaucratic system as the possibility of restoring the lost credibility is remote as we have seen in case of education system. Elected representatives and dealers are up in arms against the CFKS: Elected representatives have filed a PIL in the High Court of Rajasthan to wind up the pilot. On the expiry of the pilot period, on 13th June, all the ration dealers gave a representation to the SDM and DM to restore the original situation citing the various problems encountered in running the scheme. The dealers are on strike since June 2012. British legacy is back: Administration wins, people lose: The district administration managed the scheme in such a way that it gives maximum results of the kind they want- that is –total saving of subsidy. It is least bothered weather people get kerosene or not. The scheme evokes extreme responses: total success for those who framed it and total failure by the other stake holders. PDS becoming casualty: The scheme shows how demotivating the PDS system is becoming. In the context of the pilot the total pay-off is not considered positive enough for any effort to open an account. There are many indicators to substantiate that. For one we found that people are using diesel in place of kerosene for lighting. Second, there were cases wherein people instead of going through the rigmarole of the ‘cash for kerosene’ process, they preferred to buy kerosene in nearby black market at a rate cheaper than the official rate. Third they preferred the inconvenience rather than join the scheme. The message from the people for the scheme is very clear, “Keep your kerosene with you and go to hell.” Our assessment study suggests that the people have been using kerosene regularly and there is demand for kerosene. However simultaneously it also comes out clearly that the people weigh the opportunity cost and if the total cost increases people would not buy the same. People are not interested in opening Accounts: Majority of the households are probably not interested in opening accounts as they do no need them. Under the scheme they have literally been forced to open the accounts and are unlikely to be used. Many households may prefer to forgo kerosene rather than opt for and manage bank accounts. It is too much of a trouble for small sum of subsidy. Scheme was launched without preparation: Protocol stand violated The Scheme was launched by the district administration without adequate preparation. Accounts were not opened, subsidy was not deposited, impact on shop-keepers was not evaluated properly, people were not made aware, required precautions were not taken, etc. Fall in consumption of kerosene is designed: The fall in consumption of kerosene to the tune projected is definitely not due to the fact that people do not want it. It is for the reasons of prevailing socio-economic reasons on the one hand and structural as well as management aspects of the scheme on the other. One, the scheme dried up the income of the shop-keepers who are now working against the scheme.

The dealers are on strike. They have deliberately not picking the stock because it is not worth the efforts. This is has reduced consumption. Two, people who need kerosene are unable to get due to short supply and have no way to reach the authorities as the avenue for complaint are shop-keepers who themselves are responsible for short supply. This thus remains hidden. Three, by design the prices were increased three times and access to subsidy was made difficult by various means thus literally forcing the consumers to either buy at high rate or to forgo access to kerosene. Forth, introducing an element of forced bank transaction in the scheme that is a ‘burden’ of the poor and vulnerable people and to which majority would not like to resort to. Blatantly undemocratic practice: Views of elected representatives totally ignored Our assessment brings in bold relief that the views of the elected representatives stand totally ignored. To that extent it is the most undemocratic scheme. It is obvious from the fact that a PIL filed by the elected representatives is pending in the high court of Rajasthan on the issue. The point here is that can a scheme should be continued when the elected representatives are not interested in it. Scheme is a burden on the banks: The scheme is not only a burden on the people and shop keepers but is equally a burden on the banks. Banks are not interested in the scheme as it defies the very logic on which the banks exists i.e. the logic of market. No-frill large number of accounts with extremely low level of transaction is against the principles of market economy for banks. No wonder therefore no commercial bank was interested in the scheme. SBI has flatly refused. The banks are least interested in such accounts and bank’s general response to people is in effect ‘insulting’. 5.2 Recommendations/ Suggestions: Scrap the CFKS forthwith: The CFKS should be immediately scrapped and detailed independent assessment should be undertaken of the scheme. High level inquiry should be constituted: There is a need for high level enquiry to find out under what compulsions the CFKS was launched without preparations. The enquiry must examine the violations of decisions, misrepresentation of facts etc and fix responsibilities. Rethink required: Government need to rethink about the specific measure to check the black of kerosene. The people are not ready for CFKS type of measure. Alternate methods need to be thought about.

VI: ANNEXURES
6.1 ANNEXURE 1: Interview with DSO and Inspector:

(i) This scheme was launched without prior information and preparations. (ii) In the beginning accounts for the subsidy were opened in post office but later it was realized that post office is not connected to online networks. Due to it people had to sacrifice their rupees fifty without any fault. For 20 thousand households this amount comes to 10 lakhs- this much money is down the drain (iii)The scheme has become a burden because there is shortage of staff and to monitor the scheme we need more people but there is no staff for it (iv)Due to scheme consumers are suffering, most have stopped taking kerosene. (v) “People are not getting their subsidy on time and we here are helpless to do anything in regards of subsidy because no amount after March has been released from government.” (vi)Banks are not supporting us, SBI has said clearly no to continue this scheme with their bank. (vii)“We usually get complains that banks has not given passbooks to zero balance account holder to costumers but we can’t intervene in banks matter.” (viii)Government has decided to launch it in Rajgarh block w.e.f Oct 2 2012, which is bigger then kotkasim terms of both population and area wise. In the current resources we will launch this scheme and there is no advance preparation for it. Till date there are (i) no camps for of account openings (ii) no awareness campaign (iii) no experience sharing of kotkasim block has been done 6.2 ANNEXURE 2: Response from the district administration 1. There are 24 gram-Panchayat and bank branches at six places only2. Maximum distance to cover is 8 KM 3. Total subsidy deposited 52.5 lakhs 4. First installment was deposited in subsequent phases 5. Second installment was deposited in the same accounts 6. All village level representatives were taken into accounts 7. Camps at Panchayat level were held after wide publicity – further the camps were extended at village level- in all 32 camps were organized 8. Villagers have been asked to lodge complaints at shops – details are taken and mistake ratified every month 9. No representation has been received against the scheme- only some card holders have expressed that they have not got subsidy amount for March to May period 10. Shop-keepers are cooperating in execution of scheme 11. Dealers are lifting SKO- demand has come down due to summer so lifting has gone down- shop keepers have nothing to do with off take as it is related with the demand amongst card holders 12. Less number of accounts – 5000- eligible ones have gone away in nearby industries and have settled there In the name of assessment only thing submitted is the allotment and off take and sold quantities of kerosene

6.3 ANNEXURE 3: Public Interest Litigation by Sarpanch [3438 of 2012- Mushtaq Ali and others Vs Union of India and others]: The Gist Four sarpanchs, namely, Mushtaq Ali S/o Shri Jahoor Ali sarpanch of Bagherikhurd; Karan Singh s/o Shri Matadeen sarpanch of Patan Ahir; Bhoom Singh s/o Shri Rood Singh sarpanch of Nangal Sallia and Rameshwar Prasad s/o Prabhati Lal of Jodia gram Panchayat filed a PIL in Rajasthan High Court with pray to (i) call for all the documets pertaining to the scheme and (ii) declare the pilot illegal and cancel the same. Prior to filling the PIL the petitioners had approached the DSO but he refused to entertain the resolutions of gramsabha saying the scheme has already been launched. The points made in the PIL are as under: a) The petition was filed based on the resolutions passed by the respective gram sabhas. b) ‘Primary requirements of induction of such an innovation, had not been taken care of’ [Para 1]. c) “Three months subsidy on each ration card will be deposited in the accounts of consumers” [Para 3]. This was decided in a meeting held on 12-8-2011 of ADDl Sec Petroleum, GM IOCL, State Level Coordinator, RGM, LPG, DC, Food Supply Department [Para 5]. d) First Laxamangarh block was chosen but later it was changed to Kotkasim at the last moment [Para 6] e) “That none of the public representative was called for meeting or ever discussed” [Para 4] f) A meeting was held of oil companies and other officials and a 10-point programme was decided upon prior to launching of the pilot (1) bank accounts /accounts in PO will be opened (2) the same would be linked with UID (3) new ration cards will be issued (4) the cards would be linked with bank accounts – number to be written on the ration card (5) computerization of all gas companies (6) web portal for all the information (7) pilot to be initiated in Oct 2011 (8) cooperation of elected representatives and shop-keepers would be taken (9) workshop to educate the elected representatives and shop-keepers. All these decisions were rescinded in a meeting held on 14-7-2011 and are available in writing. [this copy was procured by them through RTI] [Para 4] g) On 15-11-2011 another meeting under Mr Sudhir Bhargav, JS, PNGS wherein the primary requirements were expected prior to launching of project (a) computerized information will be collected for 15000 consumers by the DM (b) NIC would prepare a software for transfer of money so that subsidy is transferred within a week (c) Information about actual quantity sold to be collected from shops to be fed into computers (d) A special cell to be created at Tehsil level [Para 7] h) Only 14,120 accounts have been opened; as per DSO 13000 accounts till 19-12012; amount deposited by 19-1-2012 was 22.31 lakhs in 8000 accounts i) “—outcomes of the scheme is harassing the consumers at large on various counts,…” [Para 8 (b)]

j) “Many main persons of the ration cards have expired and hence the bank accounts on the basis of such existing ration cards are not possible and the persons who are not able to open the bank account would not only be deprived of cash subsidy but the distribution of kerosene to such consumers will also be hampered, more particularly when no instructions whatsoever have been issued for such consumers,….” [Para 8 (c)]. k) “….bank officers are forcing the consumers to deposit initial amount under the pretext of RBI guidelines---” [Para (d)] l) ----on a distance of 10 to 15 KM, a bank branch is available.” “The consumers bearing age of senior citizen would further jeopardize by unwarranted travel to the bank and thereafter to the fair price shop.” [Para 8 (e)] 6.4 ANNEXURE 4: Summary of main points in English of various government decisions, letters, circular English Summary of various important decisions taken by the Government in various meetings: (1) Decisions taken in a Meeting held by J.C.Mohanty, Principal Secretary Food, Rajasthan on 11.07.2011: (a) To implement this scheme it is important that the beneficiaries have accounts in bank/post office and they are linked with UID. The concerned district collectors would ensure opening of accounts of the beneficiaries. [decision no 2] (b) Along with UID card KRY+ information in terms of ration card number, category of ration card, consumer number of gas connection, SBC/DBC, name of the oil company, bank account number etc is also necessary to gather. [decision no 3] (c) Currently the validity period of the ration cards have expired. In view of this process of issuing new cards should begin quickly and ration card should be linked with bank account. On ration card Bank account number must be written. [decision no 4] (d) Oil companies will prepare software which has information about all the gas connections at one place which will be linked with the software of district supply officer containing information about ration cards so that the position of gas could be entered onto the card. [decision no 5] (e ) It was decided to prepare a web portal for making the distribution of ‘cash subsidy for kerosene’ so that any interested citizen can find out as to which beneficiary has received how much subsidy.[decision no 6] (f) To understand the computerisation system a team would go to study Andhra Pradesh system of computerisation (g) The scheme would be implemented w.e.f. October 2011 in one block each of Bharatpur and Alwar(h) In the selected blocks screening of ration cards shall be done with the help of Patwari and Gram Sevak h. Training workshop for sarpanch and FPS dealers (2) Meeting of Additional Secretary, Petroleum & National Gas, GOI; General Manager, IOCL; State Level Coordinator, Regional General Manager, LPC; Deputy Commissioner, Food Supply Dept. on 12-08-2011 Decisions: a. The cash for kerosene scheme will be started in Alwar and Bharatpur on a pilot basis in October 2011

b. To buy the current quantities of kerosene entitled for No Gas/SBC/DBC, subsidy will be transferred by the Central Government into the bank accounts. The state government shall provide utilization certificate in the format provided to the central govt. c. The subsidy for October 2011 to December 2011 will be transferred at one go. From January 2012 onwards, the subsidy transfer will be done on a monthly basis. The subsidy for January 2012 is conditional to the consumption of Kerosene in October 2011 and so on. The guidelines to ensure lifting by individual consumers shall be ensured by the state government. d. Subsidy will not be given in hand but bank only e. The expenses involved in advertising the pilot will be shared- 25% state and 75% centre f. Due to the difference of the prices, the Food and Civil supplies department shall ensure that no kerosene from other districts will be smuggled into Alwar or Bharatpur g. The increased VAT shall be adjusted by the central govt? h. State govt to evaluate survey after December 2011 and send suggestions to central govt i. After consultation with the Petroleum and Natural Gas ministry, GOI detailed guidelines shall be issued (3) Letter to Principal secretary food – 8/Nove 2011 to GOR, Food Civil Supplies from Dist Supply Officer, Alwar says that all preparations have been completed in Laxmangarh tehsil where maximum coverage of Aadhar UID has been made (find out progress of UID in this tehsil) and that almost all eligible beneficiaries have bank accounts – quarter funda – cash transfers to actual consumers will be ensured – State govt is READY to launch the Pilot projctas desired by the YOU (They were waiting for the starting of the project in Laxmangarh – why the delay from August to November?? ) (4) The meeting with Sudhir Bhargav and Mohanty on 15.11.2011 a. 5 states were announced in the budget of 201-12 to be places where pilots should be done b. For the above purpose, a tehsil in Alwar dist in Rajasthan has to be selected where max number of accounts and max UID cards or UID is at least in progress. A letter has also been sent to Alwar collector for the selection of a tehsil (this is in spite of the letter saying Laxman garh has been selected on 8-11-2011) c. The bank accounts of the beneficiaries in the selected tehsil will be listed with the help of a computer. The subsidy will be transferred for first 3 months initially and after that monthly subsidy - but if the subsidy for first 3 months is not used, then that money will be adjusted in the next few months in the pricing of other commodities in the FPS d. Subsidy will become conditional to the purchase of the kerosene e. Software for listing will be developed by NIC f. To each state 1 crore rupees will be given for the various preparations

g. In MP and Orissa Bar code ration food coupons will be given, after required authorisation through the Gram Panchayat. This will be the sole basis by which people will be able to access subsidized wheat and kerosene. h. Due to the increase in selling price, the state tax will also increase for which the commission of the dealer also should be increased. It was advised that the state govt should work towards keeping the state taxes same or should be eliminated completely in which case the commission of the dealers need not be increased i. NCAER will prepare a report about the misuse of subsidy which has to be studied j. A software has been developed by the Karnataka govt by which data of gas connections, PDS and electricity department will be converged. To study this software a team from every state could visit Karnataka. k. To start the pilot in Rajasthan from December 2011, the following preparations should be done on a war footing i. To collect details like bank account numbers of 50,000 consumers and computerisation using the help of private agencies in one week, a campaign shall be run by the district collector ii. Within one week, software from NIC to directly transfer money to account iii. The consumption details shall be computerised on a monthly basis by private agencies under the supervision of the Tehsildar iv. A special cell will be constituted to overlook this at the district and tehsil level. This will be at the level of the collector l. The minutes say that the district from Alwar has not been selected and the Bharatpur option has also been closed down (5) Letter from Mohanty to Alwar collector on 28-11-2011 confirming what the collector informed to him: i. During the consumer week from 21-28 November 2011 in Kotkasim the bank account/post office details of TPDS have been collected ii. The computerization of bank accounts is underway and all preparations have been done for the transfer of the subsidy for 3 months iii. 25 lac rupees are being transferred to the account of Rajasthan State Food and Civil supplies corporation which has to be transferred to the bank accounts of consumers b. A task force to be considered for setting up consisting of BDO, SDM of Kotkasim among other authorities from district level. c. Call for a meeting with IOC’s GM and other authorities in Alwar at the earliest d. Make other authorities to work since time is less and preparations have to be done on a war footing. (6) Letter dated 28.11.2011 from Mohanty to GM, IOCL: a. The pilot shall start from Kotkasim tehsil in December 2011.

b. Collector Alwar has already ensured necessary arrangements including collections and digitization of the Bank Account Number of the card holders. c. GOI has been requested to send the requisite fund in the account of Raj Food and Civil Supplies Corporation d. In the mean time requisite fund has been provided to the DSO for transfer of advance subsidy amount in the Bank Account of card holders. e. Please ensure the following – i. Instruct concerned company to ensure availability of adequate stock of non-subsidy kerosene for distribution in Dec 2011 ii. Convey to us the retail price for non-PDS kerosene iii. Ensure adequate publicity to the scheme iv. Make arrangements for the launching ceremony to be held in the 1st week of December 2011 v. Please instruct the State head of the concerned oil company to visit Kotkasim and discuss with the Collector Alwar and other District Level Officers (7) Letter from Additional Commissioner of Food and Civil Supplies Corporation, Raj to Ministry of Petroleum and Natural Gas, GOI on 2.12.2011. For Kotkasim the following has been done a. Almost all card holders’ bank account numbers have been taken b. Computer feeding of the bank account number into the software was done c. 25 lac transferred from State Food and civil to District Manager/ DSO’s account d. First 3 months’ subsidy will be transferred to the accounts of people who gave their numbers e. Non-subsidized kerosene supply to FPS has been put in place f. 1000 rupees per month – so total 3000 shall be provided for 3 months to the dealers as announced. Which they shall use for their essential necessities, advertising and interest on additional amount. Arrangements are being made to transfer this too before 5 December 2011 g. Please give us 1 crore from GOI to Raj govt soon (8) Letter to Principal Commissioner, Food and Civil, Raj from DSO, Alwar a. UID cards are only 6000 of 24000 by 19.01.2012 – Lifted kerosene is 36 KL and distributed kerosene is 22 KL till 19.1.2012…whereas in Dec it was 84KL….they say 13000 accounts were opened out of 24500 b. Only 8000 accounts money have been deposited c. FPS are being turned into Multiproduct Stores for the smooth functioning of this scheme – Raj Atta, Namak and tea d. 6000 people have bought kerosene without taking out subsidy money from their accounts which is 3 times higher (9) Additional affidavit: (Kerosene Cash Subsidy Scheme - schedule) a. Subsidy only transferred to Ration card holder (Head of household) b. 263, 175, None c. Before implementation of the scheme Consumers, People’s representatives and FPS dealers will be made to understand thru discussion about the

benefits of the scheme, implementation and its effects. They will be taken into confidence so that in the successful implementation we shall get their cooperation d. Pamphlets and all forms of media shall be used to spread awareness about the scheme to far off villages which should help consumers to clear their doubts e. For the implementation of the scheme, the main objective is bank accounts should be opened. Even the old accounts of the customers can be used. But they should try to open new accounts to be able to temporarily monitor withdrawal and depositing of subsidy amount f. NIC Delhi has developed a software to monitor this scheme. More details can be had from NIC, Jaipur and Principal Ration Commissioner, FCS The deposited money, monthly consumption of kerosene, transactions in accounts like withdrawal, a/c no, bank, branch and all other details of consumer shall be monitored through this software g. Since the commission will decrease due to the reduction in kerosene sale (which may happen) other non PDS items like Raj Salt, Tea, atta more and more sale shall be done (in the future Raj soap, Raj Soya oil and masala shall also be introduced) Attractive danglers, new painting on the shop, effective display of non-pds stuff which shall be able to convert them into multi brand stores h. Feedback shall be taken from the Sarpanches, People’s representatives, consumers so that changes can be made from time to time for a successful implementation of the scheme and for joint preparation (10) Letter from DSO, Alwar to Principal Secretary, Food – Jaipur o n 15-6-2012 – Between March-May 2012 5000 individuals have not received the subsidy and they are agitated.

6.5 ANNEXURE 5: Case Studies These 17 cases are only illustrative to high light the various issues discussed in the main body of the study. They qualify the inferences drawn based on statistical tables. The cases also show that many poor are APL. Case 1: Name: Subhash ; Ration Card No.: 796; Ration Card Type: APL; Village: Kharola No pass-book-No Subsidy, buying kerosene in black from Khairtal This ration card is one of six in a huge family of carpenters. This card itself has 10 units. The family effectively survives on daily wage and therefore they are not as well off as some of their neighbors. He has only one more earner in the family of 10. The family is very poor. There is no M.cycle, TV, Fridge even electricity. The family regularly uses kerosene for the purposes of cooking and lighting. Mr Subhash came to know about the scheme only when he reached the shop for kerosene in December

2011 and the shopkeeper asked to pay at the rate of 44.5 per litre. It was a rude shock for him and made him angry but had no choice. In January 2012, bank account was opened in the Harsoli branch of GVB. At that time it was promised that the passbook would be delivered at the home but it has yet not reached them. They have been to the bank twice, which is 9 km from their village, but to no avail. The family has not got the subsidy in hand as yet. Since January 2012 the family is buying kerosene from the black market in Khertal for Rs.35. Mr Subhash is quite angry and frustrated but is helpless to do anything. He has no support her from anyone. Case 2: Name: Munni Devi; Ration Card No.: 2k/33; Ration Card Type: AAY; Village: Kharola Forced purchase of kerosene at market rates by AAY family; unfruitful visits to bank; no pass book This is a peculiar and disturbing case of a very vulnerable Antyoday family of six. They have not been regular consumers of Kerosene, but they depend on the PDS shop for wheat. Since January, the shop has refused to sell wheat unless they buy kerosene. So now they are compelled to buy kerosene every month at the increased rates. Their bank account has been opened but they haven’t got the passbook although they have been to the bank twice. The scheme only seems to have exacerbated their troubles and create new concerns which did not exist earlier. Case 3: Name: Chameli Husband’s Name: Late Raghuveer Ration Card No. and Type: 44 APL Case Code: P = KOT 28 No subsidy- stopped buying due to high cost; No passbook; APL Chameli is a poor widow who is living on daily wage, has two small rooms where three women are staying. She stopped purchasing kerosene because of increase in the price of kerosene and the subsidy was not being deposited in her account properly. Rajasthan Gramin Bank didn’t provide the victim with her pass book for account bearing no. 77511700099754 since the inception of the scheme. She is suffering a lot without kerosene.

Case: 4.Name: Prakash Singh Father’s Name: Darshan Singh Ration Card No. and type:
973 APL Case Code: P = KOT 27 Stopped purchasing due to high price; not aware; received subsidy

Prakash Singh is really a very poor daily wage worker who drags his family consisting of 8 people and he alone is the earner in the family. He stopped purchasing kerosene because of price hike. Even though he didn’t get kerosene from his ration card he got the subsidy amount of Rs. 263 in his account in PNB bank account bearing no.:77510100079607 he was not even aware about the new scheme either.

Case: 5.

Name: Chaturbhuj Sharma Father’s name: Jagdish Sharma Ration Card No. and type: 1700 APLCase Code: P = KOT 65 Subsidy credited twice Chaturbhuj Sharma is a shop owner in Kotkasim. He lives in a rented house and does not own a single piece of land. He doesn’t use his ration card and he gave his ration card to others to use by them. When our team first went to collect the data from him, he denied to show his Bank pass book but on the following day when our team insisted him to show his pass book, it was observed that there was a double entry of subsidy received on the same date i.e., 17 Jan 2012 with the check numbers 538976288 on account bearing no. 11420975999 in SBI. He received subsidy amount i.e., Rs. 263 twice on the same day which indicates one big flaw in this scheme.

Case 6: Pista Devi Case: Name: Pistadevi Father’s name: Ramlal Ration card No and
Types-41 BPL Case Code: P = KOT 9 Subsidy not received, buying at market rate She is a lady of 86 years of age but actually her age is registered 65.she has not been getting subsidy. She is living with her nephew in search of income. Dealer has included her account number on her complaint that she has not got subsidy. But she bought in Jan, Feb and till beginning of June there is no subsidy received. This basically mean that she has not received both the times.

Case 7:

Name-Prabhat Lal; Father’s name-Dalchandagrawal; Ration card No and type-241 APL; Case Code: P = KOT 25 Received more subsidy wrongly twice: He is a man of 52years age, a paralyzed person. He uses his ration card just for kerosene. This person is having a single gas connection. He is supposed to get 2 litres of kerosene a month but he gets subsidy for three litres. He purchased kerosene only once in last six months but got subsidy twice i.e., Rs 263 for 2 times. One in December & second in April in account bearing no.77511700076814. He uses kerosene only when there is desperate need of it. It is obvious that the monitoring system is not in place.

Case 8: Name: Ramesh Chand Father’s Name: Khem Chand Ration Card No. and Type: 3 SBPL Case Code: *
No subsidy received; shifted to diesel use for cooking; forced to open multiple accounts; lose time in visiting bank He is man of 48 years, a daily wage worker in a shop. He has a pukka house consisting two rooms where two families live. Even though there is hike in price the victim bought kerosene three times i.e., in December, January & February and he didn’t get a single penny in the name of subsidy so, the victim started using diesel for cooking instead of kerosene because of his poverty. Whenever he goes to the bank to enquire about the money he has to waste his one day labour. Initially he got the account no. of 8 digits but now a days bank computer accepts only 14 digit account number. He also opened his account in post office for this scheme but it went in vein. Name: Sharbati Devi Husband’s Name: Shankar Ration Card No. and Type: 86 APL Case Code: P = KOT 20 No subsidy buying at the market rate till April 2012; no entry in the card She is an illiterate woman of 83 years age. She is a daily Wage earner and living in a semi pukka house. She purchased kerosene till April 2012. But subsidy was not transferred even for a single time. She stated a reason for this that her account is not registered on the PDS dealer’s shop. The condition of this woman is miserable. And she desperately needs kerosene. But non transfer of subsidy in her account is creating great deal of problems for her. There was no entry in her ration card for the purchase of kerosene in the months of March and April although she bought kerosene for both the months.

Case 9:

Case 10:

Name: Hariram Father’s Name: N/A Ration Card No.and Type:-8 BPL Case Code: P = KOT 21 Poor stand deprived of kerosene: typical fall out of new scheme He is a person of 42 years of age living in a semi pukka house. He is a daily wage worker having a NREGA card. His family is one of the poorest families of Kortkasim. They don’t even have money to build the house properly. They purchased kerosene in December 2011.When he saw that no subsidy has been transferred to their account he stopped purchasing kerosene from ration dealer after December 2011.The house doesn’t even have a roof.

Case 11:

Name: Gauri Shankar Father’s Name: Bhagwan Sharma RationCard No. and Type:-26 BPL Case Code: P = KOT 22 Stopped buying due to high cost and no subsidy; days labour lost for going to bank

He is a person of 47 years of age living in a pukka house. It is a very poor family consisting of four males three boys one female and one girl. Being a big family there is only one earner. The family is very poor. Last time they purchased kerosene in February 2012.But after that they have stopped purchasing kerosene from ration dealer because it is very difficult for this family to pay Rs.135 at a time as it is a big amount for them. They also haven’t got subsidy since the starting of this scheme. They also have a single gas cylinder connection and the gas cylinder too is distributed at the delay of two months. They also complained that they have to waste whole day labour to go to bank and check if subsidy has come or not but tragedy does not end here. And subsidy is not given till now.

Case 12: Name: Santram Father’s name: Shankar Ration Card No. and Type: 58 APL
Case Code: P = KOT 24 Bought till April at market rate; No subsidy received; lack of awareness He is an illiterate person of 40 years of age. Living in a semi pukka house He and his brother who is also a wage earner has to feed a family of six people. He also has a NREGA card which is his only source of earning. He has been continuously purchasing kerosene till April 2012 but amount & date of purchase of kerosene have not been registered in the ration card from last two months the last entry was of Feb 2012 and even they didn’t get the subsidy amount. They are not at all aware about the UID.

Case 13:

Name: Amar Sinha Father’s Name: Gopal Ration Card No. and Type: 1169 APL Case Code: P = KOT 26 Not aware about scheme; account not registered but bought kerosene; no subsidy Amar Sinha is a person of 70 years of age. He has got his primary education and currently he is self-employed. He lives in big house consisting of 5 rooms with a family of 10 people and there are 5 earners in this house. The most surprising fact is that they don’t know anything about the scheme. According to him, nobody told them about the scheme. Even, he also told us that no registration was done by PDS Dealer of his bank account but according to the records in his ration card, he has purchased kerosene in the months of February, March and April. The question arises how come he was getting kerosene if his account wasn’t registered at PDS dealer?

Case 14: Name: RoshanLal Father’s Name: RamjiLal Ration Card No. and Type: Number N/A APL Case Code: P = KOT 4
Stopped using kerosene due the high cost; skeptical about subsidy; resigned Roshan Lal is a very poor 40 years old daily wage worker. He is an illiterate person. He lives in a tin shed house with a family of 8 people and he is the only earner of the family. He hasn’t purchased kerosene from the month of Nov 2011 i.e., since the inception of the

scheme. It is very hard for them to spend Rs. 135 at one instance. They are also skeptical about the subsidy amount because most of the people aren’t getting it. Not only this but also they have stopped using kerosene from November last year. Sometimes they use candles, otherwise electricity connection is there.

Case 15:

Name: Anil Kumar Sharma Father’s Name: Ramjilal Sharma Ration Card No. and Type: 1729 APL Case Code: P = KOT 17 Two registered accounts, getting subsidy in both Case Study: Anil Kumar is a 48 years old man and has completed his secondary education. He is currently a private employee living in a pukka house and feeds a family of 5 people. There are two bank account holders in his family.
Anil Kumar Sharma Saroj Mishra Himself Wife Male Female Rajasthan Gramin Bank State Bank of India

The main issue in this case is that this ration card is registered with these two accounts. Hence he is getting subsidy twice whereas many others are not getting even for once. The managerial problems of the scheme are well reflected in this case. The system was not prepared for launch.

Case 16:

Name: Bishan Singh Father’s Name: BhajanLal Ration Card No. and Type: 23 BPL Case Code: P = KOT 64 Old man; not aware; no identification and no bank account; stopped purchasing Bishan Singh is a 77 years old person and he is a head of 6 members family. The major source of earning is pension given by Govt. His name is also registered in NREGA. He doesn’t have a bank account to register himself as he doesn’t have any identification card also. So, he even stopped purchasing kerosene. He was not aware about the scheme at all. Case 17: Name: Shonarana Gurjar Father’s Name: Matadin Gurjar Ration Card No. and Type: 352 APL Case Code: P = KOT 73 Not aware; increase due to inflation; difficult location of shop; bank and shop located at a distance Shonaram Gurjar is a man of 46 years. He lives in the village called Kharola, Panchayat Pataliya, block Kotkasim, Alwar. The village is not connected with the mainstream. The nearest bank is 10 kms away. The person is not at all aware of the scheme. As he says, almost nobody in the village knows about the scheme. They believed that the price increase in the kerosene is the result of the inflation. Also the nearest ration shop is eight kms away and nearest bank is 10 kms away. In monsoon, people have to cross two rivers to go to ration shop. Due to this reason many people don’t go for the mentioned purpose.

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