The State is proposing to give cash to the poor instead of subsidies. SHRIYA MOHAN investigates what is troubling experts and civil society about this. Photographs by VIJAY PANDEY
of free market liberalisation in 1991 triggered widespread prosperity for the Indian middle classes, making them the showpiece of India’s muchfêted economic boom. But little has ever changed for the bulk of the country’s poor, hundreds of millions of who continue to barely scrape through from day to day, doomed to extreme poverty and, consequently, malnutrition, disease and death. For decades, many among these millions have survived, however barely, on subsidised rice, wheat, sugar and kerosene oil sold to them through one of the world’s largest welfare schemes, the government-run ubiquitous Public Distribution System (PDS). Today, the PDS is said to serve more than 320 million people across India, a number larger than the entire population of the united States. But with widespread corruption in the PDS, including adulteration of its subsidised items or their outright pilfering on a mammoth scale, the government is toying with a radical plan to bring the curtain down on the iconic ‘ration shop’, the delivery station for subsidised essentials that is littered across India. e centre’s ministry of consumer affairs, food and public distribution, the nodal ministry for the PDS, has now proposed scrapping it fully and instead handing out cash to the poor — dubbed the “cash transfer scheme” — so they can buy their food and cooking essentials in the open market. however, leading civil society activists and organisations, which work towards bringing accountability in the PDS, express reservations about transferring cash. eir opposition is fundamentally
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twofold. One, that India’s excessively venal bureaucracy is bound to eat up much of the cash meant for the poor. and two, wracked by backbreaking debt and chronic illnesses in their families, the poor are likely to spend much of this cash on debt payoff and medicines than on buying food grain and other essentials. also, activists ask, will the government increase the cash amounts if food grain prices rise? Tehelka travelled to a few povertyridden places where the “cash transfer scheme” pilot project is to be implemented, to find that the very poor people, suffering from a highly corrupt PDS, may desperately want the cash, but may not quite buy food grains with it.

‘Rations reach only half the people since we're still functioning with the 1991 census’, says Mouli
We are a dozen people cramped on a 12-foot boat. Its two rowers take turns shoving the long bamboo pole to the bottom of the muddy river to thrust the vessel forward. ree others are using containers to scoop up and throw out river water seeping through the cracks and filling the boat to our ankles. We could be on National Geographic but we are not. We are on a river named Sharada in lakhimpur kheri, a district 120 km north of lucknow near India’s border with nepal. ree hours on the swollen river and we will be in Rampur, a small village that floods and becomes an island every monsoon. Mathura, our 35-year-old boatman, lives there with his wife and five children

Insolvents Mathura and his family have to take a six hour boat ride for rations

amid sugarcane and paddy fields, along with 90 other families. In September 2008, as the Sharada turned into a deluge and submerged the fields, the villagers packed into 10 boats and barely made it alive to the other side. When Mathura returned after two weeks, he found his house reduced to chunks of mud, his cattle floating dead. It took him six months to rebuild his house with a loan of Rs 5,000 taken at an exploitative annual interest rate of 120 percent. earning barely Rs 1,000 a month from ferrying passengers on his boat, half his income is sucked away by interest payoffs. Mathura is forever looking out for any additional income to reduce his chronic debt. For him, the centre’s “cash transfer scheme” to buy food grain could come in handy. not that the decades of the PDS have helped mitigate his miseries. Today, Mathura is returning with an empty bag from a visit to the ration shop, which can be reached only by rowing across the river, as there are no roads to the shop. Only 14 families in Mathura’s village are privileged ration cardholders. But even for them, it is a luxury if they get their supplies from the ration shop. eir ‘quota’ of the food grain is distributed on a specific day, and if they miss it, as happens often, they miss buying the subsidised essentials. “For four months of the monsoon it is almost impossible to row over there,” says Mathura. For much of the rest of the year, the ration shop owner tells them he is “out of supply”. To come back another day would mean a six hour to and fro boat ride. “We get our ration only four months a year,” says Mathura. “e rest of the time, we buy from the market at double the rates.” In July 2009, Mathura only got 28 kg and not 35 kg of rice and wheat. nobody, he says, ever gets 35 kg. Government officials say it is this abysmal state of the PDS that has led to the formulation of the cash transfer scheme. Declining to be named since the proposal is yet to be formally announced, a top IaS officer in the minCURRENT AFFAIRS 17




and Rajashree. her youngest child. nine-month- old Sachin. Jagdish. “If we buy it. nearly half of India’s children are malnourished.” says his sister. our supply side has been allowed to wither away or has never existed. civil supplies and consumer protection in the uttar Pradesh govern- • WRITER’S EMAIL: shriya@tehelka.” Raja Mouli. “But mostly it is just roti with salt. it is because we are functioning on the basis of the 1991 census. like more than half the people in her village. lives with her husband and three children near Jagdish Bhai’s house. he favours continuing with the PDS because it also supports farmers by buying their grains at a guaranteed minimum support price. is will be deposited in the cardholders’ bank accounts with governmentowned rural banks in their areas. doesn’t have a card but dreams of one (above left) Have nots Gulaba.” she says. because we are desperate. were free from corruption. Dhoopa. e government classifies someone as poor if the person lives “below poverty line (BPl)”. too. she waits for her only son to return with the day’s wages because she has no money and her kitchen shelves are empty.” agrees lucknow-based Magsaysay award winner Sandeep Pandey: “Which cash scheme activist arundhuti Dhuru. “Who is going to buy their grains. I would be relieved if the government paid cash to these people.” he says. something must turn up fast. or earns less than a dollar a day. Besides. is is how the scheme will work.” adds new Delhi-based Jawaharlal nehru university professor utsa Patnaik: “is is a foolish move. Patnaik is also a member of the expert committee of the Planning commission on conditional cash Transfers. cash transfers are efficient when the supply side is up and working. his hair grows in patchy clumps. 27. For Fatima. two daughters and son. the idea for a PDS started taking shape after the Bengal Famine of 1943 killed millions from malnourishment wrought by severe food shortage. we eat roti. as ration cardholders are entitled to 35 kg of grains per month. India’s society suffers from extreme gender inequities and caste oppression. “I have not much hope in these promises. which is the nodal agency that implements the PDS.” he says. died.” of the scheme in the government point at Brazil. ration shop supplier Omprakash says he dislikes his job for lack of incentives: “I am paid nothing for distributing ration.” she says blankly when told of the cash transfer scheme. while the wage labourer doesn’t even have a card. It must not be done away with. weeps constantly from the week-long high temperature. “Just don’t delay whatever you want to give us. is severely undernourished. Jagdish Bhai could rarely buy the subsidised rice and wheat as he often couldn’t know the supply date in advance to raise enough money. or maternity benefits. his two daughters. showing a bald scalp. a long time campaigner for securing food rights to the poor. “Brazil is a hugely urbanised society. “he became pale. according to him. e weight keeps declining as it passes through layers of corruption. only to bring in a whole new set of problems. hardoi’s district magistrate until last month. unlike Brazil. 13. lived here with his wife. Geyanna and her husband.” Says lucknow-based nReGS 29 AUGUST 2009 TEHELKA According to Patnaik. he says. leading to the village. principal secretary in the department of food. his arms and legs are emaciated. they will be provided total cash of Rs 350 (35 times Rs 10) every month. food and public distribution confirmed to Tehelka that it has sought a grant of Rs 242 crore from the finance ministry. where cash is directly transferred to the bank accounts of the poor. It is this difference of Rs 10 per kg that the government now plans to give as cash to a BPl ration cardholder. “ose who own tractors hold BPl cards. a member of the Supreme court commission on the Right to Life’s blacklist These villagers’ ration cards have all been cancelled ment. In March 2008. says the PDS has failed and must be replaced by cash transfers.” But Patnaik argues that India’s situation is different from Brazil’s. a senior government official in uttar Pradesh. unlike in India Food. 17. “I have seen cases of people from the panchayat who accompany nReGS workers to the bank and wait outside and take their cut the moment the cash is withdrawn. although he had a ration card. Back in the Gondhia to cash. Ironically.com 18 CURRENT AFFAIRS CURRENT AFFAIRS 19 .” argues Patnaik. as the open market price of this rice is currently Rs 16 per kg. the panchayat official and the banker form a nexus and take a cut from the labourer. and his wife Maher Sha Devi have an Antyodaya ration card (above right) e question is: will the cash transfer scheme address the issue of malnutrition? ere is no doubt that the PDS has failed to bring about a credible reduction in malnutrition – today. declining to be named. “I’m not sure how corruption can be controlled by converting a food subsidy TEHELKA 29 AUGUST 2009 of the government doesn’t have corruption? even in nReGS. e baby.” ese suppliers – called kothedars –are the bad guys who overcharge. but never as a substitute for food. Jagdish Bhai.” Biraj Patnaik. the government bears the burden of the remainder Rs 10 per kg as a subsidy. a daily wage labourer. and where will those grains go?” he asks. he resold a portion of it in the market to augment his meagre income. Starving since morning. PDS or cash transfer. how will the government stop the panchayat official from accompanying labourers just to collect his share once they step outside the bank?” Mouli says a failure to identify all the poor is at the root of the problem. OnDhIa vIllaGe in lakhimpur kheri saw three hunger deaths last year. even before the grain reaches the FcI godowns. says replacing the PDS with cash transfers is like “throwing the baby out with the bathwater”. cash transfers work only when the supply side is working. a 50 kg bag already weighs only 45 kg. a 65-year-old widow in village Jemnipur of hardoi district in uttar Pradesh. Jacob omas. Madhuri. and central Delhi. But not everyone in the government shares his enthusiasm for cash transfers. 65. only breast milk-fed. “Destroying the ration shops in their entirety would mean destroying another sacred space where social movements erupt. Five months later.SPECIAL REPORT SPECIAL REPORT istry of consumer affairs. “cash transfers will be direct and foolproof. as in health and education. unlike parts of rural India which are not highly monetised economies. “e entire system is flawed. she has no ration card. is a daily wage laboror without any card (top right) Lifeline Gokaran. If ever he did buy his ration quota. “conditional cash transfers will only deepen the inequities and lead to a much higher level of leakages. “e poor ultimately get only 28 kg. to run a pilot for the cash transfer scheme in five villages in lakhimpur kheri and hardoi in uttar Pradesh. high fever gripped his two daughters and claimed their lives. agrees: “uttar Pradesh depends heavily on procuring grains. sick and thin as a stick. a small shopkeeper selling oil and spices in the twice-weekly bazaar. Panchkula and Jhajjar in haryana. “If rations have reached only half the people. 35. sabzi and dal.” he says. survived on their school’s midday meals scheme. a BPl ration cardholder is entitled to buy rice from the ration shop at Rs 6 per kg. detailed how the subsidised food grain meant for the poor is looted. where a cash transfer programme has reportedly worked well by cutting down social infrastructure and setting aside 4 percent of GDP for cash transfers to the poor. Ravi verma. Former MP from lakhimpur kheri. making the country the world’s worst offender of malnutrition. Geyanna.” Direct cash transfers could work in old age pension. with her 3 children. “In India. don’t sell the full quota and fail to announce the arrival of the ration well in advance. they must be fixed. how will cash reach the people it is supposed to? If PDS has many loopholes.” he says. unorganised sector’s labour benefits. his widow and son survived only because they were taken to the hospital and treated for severe malnutrition. ey want to experiment to see but I am not yet convinced about this move. told Tehelka . e skin on his thighs is wrinkly. in Hardoi district has an Antyodaya ration card (top left) Either or Rikshaw puller Harchhat. e state will have to deal with lots of issues on the supply side. e PDS evolved over the next two decades. saying that it was a “misconception” that schemes like the nReGS.” he PROPOnenTS T G Bleak choice Fatima. 60.” formation of the Food corporation of India (FcI) in 1964. manage to buy their ration only if word of mouth gets to them in time that the supplies have reached the ration shop.

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