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Written by Gaurav Gupta, Roopa Kudva | Updated: July 13, 2020
9:29:54 am
Ninety four per cent of eligible families had received extra PDS
rations by end May and 80 per cent hadreceived cash entitlements
averaging close to Rs 2,000.
(Also written by Rohini Nilekani)
In a welcome move, the Pradhan Mantri Garib Kalyan Yojana, which
targets 800
million people for free rations through the Public Distribution
System, has been
extended until November. As the COVID-19 pandemic rages on, a
massive effort is
being undertaken to minimise the economic impact on our most
vulnerable
population. Schemes such as Jan Dhan, PM Kisan and PM Ujjwala
aim to transfer Rs
532 billon to 420 million people. These efforts have proved to
be reasonably
successful. With this success, and with so many people now in
danger of slipping
into poverty, it is imperative to create a regime, even with a
sunset clause, of
universal benefits.
We have commissioned a multi-round survey of 47,000 households,
mostly below
poverty line, across 15 states. The surveys explore whether
relief schemes have
been working as intended, who is missing out and what more is
needed. Our data
revealed the immediate, and likely long-lasting ,nature of the
economic shock.
Primary income earners in two-thirds of the households have lost
their jobs or
wages. The average family has lost more than 60 per cent of its
pre-crisis income
and is now making just Rs 4,000/month. Twenty four per cent of
low-income
households have run out of money and supplies. Forty per cent
families are in debt.
In some states, as many as one in five primary income earners do
not expect to find
work in the near future.
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In this dire situation, government relief has been an important
lifeline. Ninety four
per cent of eligible families had received extra PDS rations by
end May and 80 per
cent had received cash entitlements averaging close to Rs 2,000.
Our data also
suggests that about five million households could have both run
out of savings and
not received any cash transfer from the government.
We estimate that over 55 million workers, who were earning above
poverty line
incomes, have lost jobs, temporarily or permanently, during this
crisis. Many such
workers would not show up as eligible under standard lists. The
scale of current
urban-rural migration makes this challenge worse. If we shift to
universal benefits
we can minimise a situation where millions miss out on critical
relief. Whoever
turns up to a ration shop needing free/subsidised rations should
be able to get it.
People should be able to sign up for a cash relief transfer with
minimal paperwork.
The good news is that now it’s more possible than ever
before.
Digitisation has created efficiencies that can be leveraged to
expand the welfare
net. The vast amount of leakage in the welfare system was not
due to fraud by
citizens, but because of fraud and inefficiency by those
delivering the benefits.
Successive governments should be applauded for the steep
reduction in such
problems. Implementing the JAM trinity has helped lower
transaction costs, reduce
leakages and reach beneficiaries quickly. Aadhaar can prevent
identity frauds. Our
sophisticated payments infrastructure enables direct benefit
transfers. The speed at
which MGNREGA payments are made to beneficiaries has improved
more than
threefold since 2015. Pilots for the One Nation-One Ration Card
project have shown
that inter-state portability is possible.
Several states have experimented with a more universal approach
with positive
results. Tamil Nadu’s PDS system has strong coverage and
equitable pricing,
delivering 20 kg of rice at Rs 1/kg every month to all families
who need it. More
recently, Chhattisgarh universalised PDS to provide for their
returning migrants
with encouraging results. MGNREGA has always been open to all
rural households.
We could factor in voluntary opt-outs. The “Give up LPG Subsidy”
campaign offers
many lessons. By highlighting the real intended targets of the
relief effort and the
adverse impact on millions of people, others could be inspired
to give up their own
benefits. This could reduce some of the burden on the
exchequer.
We are in a marathon when it comes to this pandemic. People will
need support for
longer than anticipated. During a crisis, the emphasis needs to
be on including
those who really deserve the help rather than making sure the
wrong people are
kept out. It’s precisely because the current systems are largely
working that we can
contemplate a universal benefits approach. This approach can be
discontinued
once the pandemic ends and the economic shocks abate. The PM’s
recent
announcement is a strong starting point. Let’s extend that
further by making it
universal — free basic rations to whoever claims to need it.
Nilekani is a philanthropist and chairperson, Arghyam. Gupta is
partner and
Asia director, Dalberg Advisors. Kudva is managing director,
Omidyar
Network India
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Digitisation makes welfare schemespossible. It can be
discontinued whenpandemic endsWe are in a marathon when it comes to
this pandemic. People will need support for longer thananticipated.
During a crisis, the emphasis needs to be on including those who
really deserve the helprather than making sure the wrong people are
kept out.
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