Nilekani wants to change your status from beggar to customer

If Nandan Nilekani has his way, every time you buy a cooking gas cylinder, your bank account will swell by Rs 330. Every time your poor maid buys a litre of kerosene, she will hear the clink of Rs 6.22 dropping into her no-frills account.

But don't listen too closely to the clink of coins. For in-built into this system will be a rider: the price you pay for gas and kerosene will rise to market levels. The cash in your account is not a bonus to go mall-hopping, but to pay the full-price for non-subsidised gas and kerosene.

This will be the net effect of legislating the proposals of Nilekani, Chairman of the Unique Identity Authority of India (UIDAI) and head of the task force set up to look into the idea of substituting subsidies for petro-fuels, fertiliser and, ultimately, food, with direct cash transfers.

 Nilekani wants to change your status from beggar to customer

Should you throw a rotten tomato at Nilekani for doing you out of life's little subsidies? Not really.Dibyangshu Sarkar/ AFP Photo

The idea behind cash transfers is simple: subsidies make you unaware of the real cost of what you are buying. Cash transfers allow you to be aware of this and conserve fuel. You also get choice. You can use the money to buy anything. You may be getting a kerosene subsidy, but you can use it to buy bread. Or cake.

From the government's point of view, cash transfers save money and misuse. Since your entitlement to subsidy depends on your Unique ID, some rogue element can't walk away with what is yours.

Moreover, cash transfers can be organised electronically by the million with the click of a mouse. Distributing kerosene and food through hundreds of public distribution outlets is not only expensive, but also vulnerable to loot and pilferage. Food rots in godowns and shops when you have to physically deliver it to lakhs of shops all over India.

So where's the catch?

Tying cash subsidies to your Unique ID is really a double-edged sword. You may get the money, but the government wants to subsidise only the really poor, and not you. It has already begun what it calls the BPL survey - to identify people who are below the poverty line.

The government will, thus, begin by restricting the gas subsidy to a certain number of cylinders per year, and later withdraw the cash subsidy altogether if it discovers that you are the CEO of Infosys or head cashier at State Bank - both of whom are deemed rich enough to manage without the subsidy. You may also lose it if you happen to have a relative working on government.

So, should you throw a rotten tomato at Nilekani for doing you out of life's little subsidies?

Not really. Your real gains are in terms of less hassle. Consider the time and effort you save by not having to wait for your cooking gas cylinder which is dependent on the benevolence of the gas company. You can just buy it off the shelf and take it home or ask for delivery at a price. You don't have to queue up at the ration shop for your rice and wheat. Even the poor don't have to rush with cans and tins for their kerosene.

The upside of the cash transfer scheme is that you can live with your head held high. From being a cringing recipient of official largesse, you are now a valued customer for shopkeepers, who will woo you with their wares, whether it is kerosene, food or gas.

Remember the time when you had to depend on the telephone man's goodness to get a phone or get it up and running? Now mobile companies run after you (though, one must admit, their service is not upto the mark, but that's another story). Tomorrow, the gas delivery man will chase you, and not the other way around.

Of course, this will happen only when, and if, Nilekani's scheme is accepted by the government. It's a big if, considering that this government has not had the courage to take any bold decision.

But it will happen later or sooner, for the government simply can't afford to subsidise everybody to avoid going bankrupt. When cash transfers come, your status changes.

Even the poor will be able to live with dignity. The cash subsidies they get can be used for anything: they can send their children to better schools, upgrade to better food, and shop at the mall. They will no longer remain begging bowl beneficiaries, whining about the price of kerosene or wheat at the end of a long line. They will become paying customers - and be treated with respect.

Updated Date: Dec 20, 2014 03:59:20 IST