Reimag­in­ing In­dia’s wel­fare tool­kit

Univer­salise PDS, make it de­mand-driven; give more funds to states; and ramp up MGNREGS

Hindustan Times (Chandigarh) - - Comment -

Ipen this col­umn with a de­press­ing sense of deja vu. Back in late March as In­dia went into lock­down, I wrote in th­ese pages of the ur­gent need for the State to change the rules of the game, avoid red tape, im­prove Cen­tre-state co­or­di­na­tion and adapt ag­ile ad­min­is­tra­tive pro­cesses as it sought to pro­vide re­lief mea­sures in re­sponse to the eco­nomic cri­sis un­leashed by the lock­down. Of course, the ex­pec­ta­tion was that the Cen­tre would be far more gen­er­ous with its purse strings than it has been thus far. But five months on, a re­port in this news­pa­per, un­der­lin­ing that only a quar­ter of the 800,000 mil­lion tonnes of free grain al­lo­cated to mi­grant work­ers has been dis­trib­uted, serves as a sad re­minder that the State has demon­strated nei­ther fis­cal gen­eros­ity nor a will­ing­ness to change the rules of the game. The eco­nomic cri­sis, too, is only deep­en­ing. It is, there­fore, worth re­vis­it­ing the ar­gu­ments, made five months ago, and once again press for the ur­gency of re­sponse.

First, univer­salise the public dis­tri­bu­tion sys­tem (PDS). Ex­pand­ing the much-ma­ligned PDS, which re­mains a life­line for many, was the first thing the Cen­tre did post the lock­down. This has now been ex­tended to Novem­ber. But the gov­ern­ment stopped short of uni­ver­sal­is­ing PDS i.e, mak­ing grains avail­able on de­mand, in­clud­ing to those who did not have ra­tion cards.

In May, when it be­came im­pos­si­ble to hide from the enor­mity of the mi­grant cri­sis, the PDS en­ti­tle­ment was ex­tended to 80 mil­lion mi­grants, many of whom do not have ra­tion cards. But for a sys­tem ob­sessed with pa­per work and “iden­ti­fi­ca­tion,” this ex­ten­sion did not trans­late into ease of ac­cess. Rather, it cre­ated its own red tape as­so­ci­ated with iden­ti­fy­ing mi­grants and is­su­ing tem­po­rary ra­tion cards. To their credit, some state gov­ern­ments have tried to re­solve this through lo­cal sur­veys, is­su­ing tem­po­rary ra­tion cards through on­line por­tals and so on. But each of th­ese pro­cesses is cum­ber­some, time-con­sum­ing, and cre­ates new forms of daunt­ing pa­per­work within gov­ern­ment. This is one rea­son why only mere 18% of the tar­geted 80 mil­lion mi­grants have re­ceived ben­e­fits.

And it’s not just mi­grant work­ers. Ac­cord­ing to es­ti­mates by Reetika Khera and Jean Dreze, even in or­di­nary times, nearly 100 mil­lion In­di­ans who are en­ti­tled to PDS are ex­cluded from it. In other words, they do not have ra­tion cards, which pre­vents them from ac­cess­ing PDS. Sur­veys high­light that only a small pro­por­tion of those with­out ra­tion cards have been able to ac­cess grains through PDS sys­tem since the lock­down.

The an­swer, as this col­umn ar­gued in March, is to univer­salise PDS. Rather than ex­pect­ing po­ten­tial ben­e­fi­cia­ries to “en­roll” or present tem­po­rary ra­tion cards, PDS grains should be given to any­one who de­mands it. It is pos­si­ble to in­tro­duce checks and bal­ances against du­pli­ca­tion and cor­rup­tion at the PDS store. But first, the State needs to shed its pas­sion for pa­per and “iden­ti­fi­ca­tion”, recog­nise the cri­sis and make PDS “de­mand-driven”. Rather than pur­su­ing the “one na­tion, one ra­tion card”, which is no more than a de­liv­ery in­stru­ment, gov­ern­ments need to work to­gether ur­gently to univer­salise ac­cess to PDS , at min­i­mum, till we get past the cur­rent eco­nomic cri­sis.

Sec­ond, there needs to be flex­i­bil­ity in the move­ment of funds to states. States are at the front­lines in the Covid-19 bat­tle, but they are ex­pe­ri­enc­ing the pan­demic and its eco­nomic con­se­quences in a dif­fer­en­ti­ated man­ner. What states have needed from the on­set of this pan­demic is ac­cess to a flex­i­ble pool of re­sources. Given their fis­cal con­straints, most states have re­quested the Cen­tre for a Covid-19 re­lief grant to make up for the short­fall in rev­enues. But the Cen­tre has cho­sen to re­spond with lim­ited re­sources, through a cen­tralised re­lief pack­age, leav­ing lit­tle room for flex­i­bil­ity. So, for in­stance, if a state needs to re­place the Ma­hatma Gandhi Na­tional Ru­ral Em­ploy­ment Scheme (MGNREGS) work­sites with cash trans­fers, in the peak phase of the in­fec­tion phase, it can’t do so. The cen­tralised ar­chi­tec­ture has left states with lit­tle money, and also given them a ready ex­cuse not to re­spond as in­no­va­tively as needed to the eco­nomic cri­sis while par­al­lely di­lut­ing labour rights. Go­ing for­ward, In­dia needs to evolve a dy­namic, de­cen­tralised, in­sti­tu­tion­alised struc­ture that is re­spon­sive to the na­ture of the dis­ease. A Covid-19 grant to states will need an ag­ile fis­cal trans­fer for­mula akin to a pooled in­sur­ance sys­tem that is re­spon­sive, in real-time, to state needs. It also needs a co­or­di­nated ef­fort across states. The in­ter-state coun­cil is the in­sti­tu­tional mech­a­nism to do this. It ur­gently needs to be re­vived. Fi­nally, the Gov­ern­ment of In­dia can­not es­cape spend­ing more to­wards the pro­vi­sion of in­come sup­port. The ten­ta­tive re­silience in the ru­ral econ­omy is linked to MGNREGS.

With most mi­cro, small and medium en­ter­prises op­er­at­ing at 50% ca­pac­ity and sow­ing sea­son com­ing to an end, MGNREGS de­mand will surge even more. But money is fast dry­ing up. States have al­ready spent one-third of the funds al­lo­cated to them for the year. Many have not been able to keep up with de­mand un­der the scheme. An ur­gent in­fu­sion of funds into MGNREGS and ex­pan­sion of work is es­sen­tial.

There is am­ple ev­i­dence that de­mand con­trac­tion lies at the heart of the Covid-19in­duced eco­nomic cri­sis. The State needs to open its purse strings in or­der to kick-start the econ­omy. But it also needs to ur­gently change the rules of the game. It is the In­dian State’s stub­born re­fusal to re­spond gen­er­ously and ef­fec­tively to the cri­sis it con­fronts that re­mains the big­gest hur­dle.


On MGNREGS, states have al­ready spent one-third of the funds al­lo­cated to them for the year. Pro­vide more sup­port

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