Basic income to plug welfare leakage: J&K wants to experiment, will others follow too?

When Jammu and Kashmir Finance Minister Haseeb Drabu once went on a round of his constituency, he decided to check out some anganwadi centres. He entered a small room which could not hold more than 10 children. He asked how many children were enrolled there and was told 60.

He then asked to see the plates the children ate from. He was told the children get their own plates. He asked about vessels used for cooking. There were none. There was no place to wash the plates or utensils. “It is a complete racket,” Drabu said as part of his opening remarks at a national conference on basic income organised by SEWA Bharat and the India Network for Basic Income on 29-30 March in New Delhi.

Anganwadi centres, Drabu went on to relate, were almost all given to workers of political parties; the allotment of one was the first request any MLA or MP had to deal with. Worse, there was an active market in these centres. And then there is the issue of overstaffing. There is an anganwadi worker, a helper to the anganwadi worker and a supervisor for the helper!

Drabu wasn’t the only one relating horror stories from the field.

Baijayant Panda, Janata Dal MP from Odisha, talked about large numbers of ghost students enrolled under the mid-day meals scheme and the enormous leakage in wheat and kerosene distributed through the public distribution system (though the distribution of rice is flawless because of personal monitoring by chief minister Naveen Patnaik).

Representational image. Reuters

Representational image. Reuters

If such blatant corruption can take place in flagship schemes (there will be many far more horrifying stories across the country), what would be the fate of hundreds of others that are below the radar? Drabu pointed out that Jammu and Kashmir has 26 merit-cum-poverty scholarship schemes, 14 marriage assistance schemes, half a dozen widow pension schemes, all of which could total up to Rs 80-100 crore. There is no clue about who is getting it or not getting it.

This raises a pertinent question: How long should `welfare’ be allowed to be a cloak for unchecked leakage, diversion and corruption from government programmes? Never mind that the benefits are not going to the groups for whom these programmes have been designed.

The idea of a universal basic income (UBI) floated in the Economic Survey 2016-17 can possibly help address such issues. Such a programme, where money goes directly to the beneficiary could cut out the nexus between bureaucrats, politicians and vested interests whose welfare alone these schemes appear to be catering to, as of now. As Junaid Ahmed, country director, World Bank, pointed out at the conference, a cash transfer cuts out patronage politics and takes away the power of price manipulation as an instrument of politics.

Indeed, that is one of the reasons why even BJP-ruled state governments were not willing to take up pilot programmes on cash transfer in lieu of subsidised grains through the public distribution system (PDS). These pilots have now been implemented only in three Union Territories – Chandigarh, Puducherry and Dadra and Nagar Haveli. A cash transfer is hardly likely to give, for example, Chhattisgarh chief minister Raman Singh as evocative a moniker as chawal wale baba.

But the welfare hardliners refuse to even consider this. If there has to be an UBI, they argue, it has to be an add-on to existing welfare schemes and should absolutely not replace them. If the fiscal math does not allow replacement, well, then junk UBI and keep the welfare schemes, this group argues. Yes, yes, there are huge problems, but fix those, don’t junk these schemes, they say.

Worse, even pilot programmes are not being given a chance. The cash transfers in PDS pilots kicked off in 2015 and have been attacked on grounds of poor implementation within less than six months. There have been teething problems (this writer has written about them) but these are being waved around as proof of the unsoundness of the very idea.

The latest attack has come from Reetika Khera in a column in the Indian Express. She cites the findings of a concurrent process evaluation of the cash transfer programmes by the Abdul Latif Jameel Poverty Action Lab (J-PAL), which shows that one-fifth of the beneficiaries did not receive any cash and that most wanted to go back to the PDS. She also rightly points out that the government is not making these figures public and that shows it has something to hide.

But, at the national conference on basic income, Karthik Muralidharan of J-PAL and University of California San Diego (who is overseeing the evaluation exercise) showed that the receipt of cash was showing a steady improvement and the preference for DBT over PDS had grown from 33 percent in early 2016 to 65 percent this year. The welfare hardliners, however, will only focus on the fact that 35 percent are still not in favour of cash. A new idea is not even given two to three years to prove itself, while schemes which have proven to be deeply flawed over decades are supposed to continue.

Drabu has been the first state finance minister to talk about wanting to experiment with a basic income programme in Jammu and Kashmir. The way he has it worked out, it will not involve any extra expenditure or even a cutting down of welfare spending; it only involves a restructuring of expenditure. He plans to target just the below poverty line population (roughly 3.5 lakh in his state) and give each Rs 1 lakh a year. That should involve an expenditure around Rs 5,000 crore, when the current social spending of the state government is between Rs 5,000 crore and Rs 7,000 crore. “With the same amount of money we can do much better delivery,” Drabu noted. And he can even leave social intervention programmes like mid-day meals untouched.

The savings to the government will come from a scything of administrative costs; there are now 3,500 people just monitoring the very many welfare schemes, and clearly not doing a very good job of it. For Drabu, “it’s a no-brainer to move away from what we are doing currently.”

Can this be replicated in other states? The conditions would be quite different. Jammu and  Kashmir is a smaller state, Drabu pointed out, and the numbers involved (3.5 lakh BPL families) are manageable. The state also does not have the abject deprivation or deep social divisions that are present in other states. But perhaps it is time that other states take up the challenge of trying out some form of basic income transfer to see if it delivers welfare better than the current regime does.


Published Date: Apr 07, 2017 08:21 am | Updated Date: Apr 07, 2017 12:35 pm