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Last throw of the dice?


The crisis-ridden Congress leadership expects the direct cash transfer scheme, launched on January 1, to be a game-changer come 2014. But the situation on the ground is no longer as simple as it might seem to the UPA's spin doctors, writes KS Narayanan
KS NARAYANAN | Issue Dated: January 20, 2013, New Delhi
Tags : UPA government | Manmohan Singh | 2014 Lok Sabha polls | Direct Cash Transfer | NREGA |

Battered by a spate of scams and hobbled by policy paralysis, the UPA government is in desperate need of a lifeline. Its already sullied image was further dented when India erupted against the December 16 gangrape of a 23-year-old paramedic in south Delhi and the subsequent slothful response of the authorities to the heinous crime.

The girl's tragic death could not be dismissed as a mere crime statistic as the protest turned into a widespread anti-government agitation in Delhi and across the country. This is a sign that the urban wave that brought UPA II back to power in 2009 may now be turning against it.

With the mother of all battles – the General Elections – slated for 2014, the Congress leadership and the government have turned their energies towards a slew of welfare measures for the rural masses in the hope of offsetting the impact of the growing urban disenchantment with UPA-II. One such scheme is the Direct Cash Transfer that was kicked off by Prime Minister Manmohan Singh, UPA chairperson Sonia Gandhi and several Union cabinet ministers and chief ministers to woo rural voters in the face of urban discontent.

In the 2009 Lok Sabha polls, the Congress won 115 seats in major metros and towns except in Bangalore. More than 377 million Indians live in cities and metros and the number of urban and semi urban seats has increased from 70 to 200 due to rapid urbanisation and a delimitation exercise.

With anti-corruption crusaders like Anna Hazare, Baba Ramdev and Arvind Kejriwal and his recently formed Aam Admi Party keeping up pressure on a defensive government, the Congress has embarked on an ambitious policy of Direct Cash Transfer (DCT). The party expects it to be a game-changer, a move that could help it reap electoral dividends the way farm loan waiver scheme and National Rural Employment Guarantee Act (NREGA) did in 2004 and 2009 respectively.

DCT, much implemented in Latin America, has now become possible in India through the innovative use of technology and the spread of modern banking systems across the country. On paper, it is aimed at eliminating waste, cutting down leakages and targeting the beneficiaries better.

Rolling out DCT, Prime Minister Manmohan Singh noted: “Apart from these direct benefits, the government also provides an amount of over Rs 300,000 crore in subsidies which too must reach the right people.” A World Bank study recently reported that there is a direct link between cash transfers and voting behaviour and beneficiaries express a stronger preference for the ruling party that implements and expands cash transfers.

No wonder it has caught the fancy of Rahul Gandhi, the AICC General Secretary who wants party workers to take the catchy slogan ‘Aapka paisa, aapke haath’ (Your money, directly into your hands) to the people.

Comparing it with the telecom revolution, Gandhi told district congress presidents across the country last month that it will revolutionise the delivery system in India. “If you push DCT ahead, it will enable us to win not only this election but also the next (General Elections). We are talking about changing the structure. NREGA gave employment. But it did not change our system. DCT aims to change the way government delivers.”

Opposition parties, experts and activists are however, not convinced. “If we look at the recent past, the Rs 75,000 crore farm loan waiver and the NREGA programme had benefited the UPA I and II government tremendously. But is it enough to bail them out of the numerous scams and the rise in the prices of essential commodities,” wonders economist Dr Suvrokamal Dutta.

Pointing to practical problems on the ground, Raman Singh, Chhattisgarh chief minister, in a letter to the Prime Minister, has said financial inclusion and availability of information technology infrastructure are preconditions to cash transfer and there are substantial problems in the state on both accounts. “It would also be difficult to fix the monthly cash subsidies in view of fluctuation in market prices.”

On its part, the CPI(M) said that the basic philosophy behind the initiative is to dismantle the government’s obligations in the social sector as the cash transfers will automatically and continuously reduce the government’s huge subsidy bill. In its latest edition, the People’s Democracy observed: “In its desire to keep the fiscal deficit as low as possible, the UPA-II government is introducing this scheme which is an effective and efficient way of reducing subsidies. Further, in this era of neo-liberalisation, privatisation of all welfare schemes and earlier governmental obligations in areas such as education and health is to be legalised for private profit maximisation.”

Concerned that the Congress party was encroaching on its political turf, the Bahujan Samaj Party (BSP) supremo Mayawati, who bailed out the ruling coalition in the crucial vote on Foreign  Direct Investment (FDI) in multi-brand retail in the Rajya Sabha last month, slammed the government and accused it of fooling and bribing the electorate ahead of the 2014 Lok Sabha polls. “This is an adhi kacchi (half-baked) scheme cooked up by the dhokebaaz (fraudulent) Congress and I warn the people of the country not to fall to the allurements.”

Criticism continues unabated. National Advisory Council (NAC) member and Mazdoor Kisan Shakti Sangathan (MKSS) leader Aruna Roy shot off a scathing letter to the Union Finance Ministry objecting to ‘talk’ of subsidy cuts for the poor while funding programmes like Aadhar that have no legislative backing. She added that she was ‘extremely distressed’ that the Food Security Bill has been pushed into cold storage and the contrary path of cash transfers is being relentlessly pursued.

Roy is right, as the scheme is yet to be approved through a law enacted by Parliament. “The National Identification Authority of India Bill 2010,” is still pending.

N Bhaskara Rao, Chairman of CMS India and a social scientist, says DCT is merely a talking point for the Congress party. “In the long run, it could be a liability as a matter of fact. That is because its implementation is not going to be as simple as the people sitting in Delhi are expecting it to be.”

But UPA ministers remain undaunted. Union Rural Development Minister Jairam Ramesh pointed out that it is the world’s largest experiment in administrative reform. “The Direct Benefits Transfer Scheme (DBTS) is not a single jaadu ki chhadi (magic wand). It has problems on the ground. It will have problems with banks, post offices and online connectivity. We have embarked on this. We will resolve these issues as we go along,” he asserted after launching DBTS for the NREGA at Gollapolu in East Godavari district of Andhra Pradesh recently.

Ramesh also asserted that by the end of August 2013, every gram panchayat, mandal and district will be on the micro ATM network. “You need not run to banks or post offices to get money. Money will come to you at your doorstep,” he told the intended beneficiaries.

As the DCT has just been rolled out, we have to wait and watch whether it will deliver for 120 million aam aadmi, improve the delivery system and bring the Congress party to power for a third time in succession. 

With inputs by Shiv Sunny

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Issue Dated: Feb 5, 2017