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
THE LAUNCH 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. The 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. Their opposition is fundamentally 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.
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. Three 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. Three 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 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.