Direct benefits transfer is increasingly seen only as a framework of fiscal efficiency. It’s much more than that and can actually be used to bring about deep rooted social change
R Swaminathan | October 3, 2015
What can we do if we link money, digital identity and a mobile phone? A lot, if one were to put it simply. The idea is brilliant and practical at the same time, which is a rarity. It’s an idea that the government of India seems to have picked up and is keen on running with it for a long time. Like all things in the Modi Sarkar, they call it by a fancy acronym: JAM or Jan-Dhan, Aadhaar & Mobile.
There are two typical reactions to this move by the government. Both are on expected lines. The first is an almost blind adulation that has come to be associated with techno-fundamentalists. It’s an approach that’s underpinned by an extremely simplistic understanding of complex social realities and an equally naïve conceptualisation of the potential of technology to remove such complexities. In short, the techno-fundamentalists eventually come to the conclusion that social problems are nothing but a technological fix away. In their collective rose-tinted vision, JAM is the silver bullet that will destroy generations of deprivation and marginalisation that has seeped into the fabric of Indian society. Even a cursory analysis of how direct benefits transfer is playing out at the food subsidy level should substantially change the rosiness of the vision to a different hue.
The second reaction is at other end of the spectrum, and is something that’s increasingly associated with the technophobes. It’s an approach that’s based on an overarching fear of any form of technology, and more specifically digital technology, to resolve or change anything that’s remotely in the social realm. In short, for the technophobes, in the final analysis, digital technology is the big bad brother that will further amplify and accentuate social inequities. In their yellowed vision, digital technologies are nothing but another set of tools for the powerful to exert greater control. Just a glance at the way mobile phones have democratised access to information and communication systems in huge swathes of rural India should fundamentally bring in greater rosiness into their vision.
JAM has tremendous transformative potential. There is no doubt about it. Equally, if it implodes, it has enough destructive power to put back India by decades. It’s potential for good and bad are both based in the manner in which JAM is replacing the traditional plumbing and wiring, if one may use a real-world analogy, of the bureaucratic and programme delivery system. The reality lies somewhere in between. If the LPG subsidy is touted to claim how JAM can be a successful way of bringing in greater efficiency and transparency in the allocation and delivery of energy subsidy, the manner in which the direct transfer of food subsidy is playing out in different states with people completely getting deprived of basic food safety net is a warning sign of how JAM can implode. It is within this context that JAM needs to be placed. When the concept and practice of convergence as envisaged by JAM are debated within this context, there are particular strands that need to be understood and deconstructed in some detail and depth. These are critical strands and, if not strengthened adequately with proper public discourse, can rip apart quickly leading to an implosion.
The first is the issue of efficiency. JAM and direct benefits transfer are currently seen in the policy and decision making circles as means to achieve two things: fiscal efficiency at the macroeconomic level through a ‘better targeting’ of beneficiaries and reduction in leakages and corruption by ensuring that benefits and subsidies reach the people directly. The current discourse on efficiency completely ignores the fact that a large population of the most marginalised and deprived sections is not being served at all by the government due to inadequate allocation. There is an urgent need to free the concept and practice of efficiency from the stranglehold of bureaucrats and technocrats so that the efficiency discourse reorients its frameworks to exclusively deal with last-mile delivery rather than allocation. In fact, JAM and direct benefits transfer should be seen as a mechanism for the government to substantially increase its allocation to social sector and focus areas such health, nutrition, education and various critical public goods like water, food and common resources.
The second is the discourse on targeting, which in more ways than one is linked to the current narrative on efficiency. There are several robust and methodologically solid studies that prove quite decisively that targeting of benefits and subsidies not only does not work but also adds layers of inefficiency and operational costs on to the bureaucratic infrastructure. Simply put, any operating logic that needs to identify beneficiaries on set parameters needs the physical and people infrastructure to start doing so. Embedded in that infrastructure are layers of subjectivity, opportunity and processing costs, time delays and audit and forensics requirements. Targeting is capital and technology intensive and requires huge amounts of data, money and people to ensure that parameters are followed. Yet the results are at best spotty. JAM and direct benefits transfer, if located within the reoriented definition of efficiency, can actually be used to remove targeting as methodology of delivery of entitlements and services. There are several real-world examples of how universal entitlements – food grain entitlements through the public distribution system in Chhattisgarh and health services in Cuba – have worked quite well to bring out groups and communities out of extreme poverty.
The third is the idea of universal basic income. If the discourses on efficiency and targeting can be reoriented, JAM can as well become the delivery platform for every single Indian to get a basic income from the state. It isn’t an outlandish idea. It’s based on a deep-rooted social logic that every Indian, whether rich or poor, should get a direct income from the government because s/he and his or her descendents have contributed to the growth of India. For example, a construction worker who builds highways and roads that leads to crores of revenues which in turn contributes to the country’s GDP also needs to earn a regular dividend from it. SEWA has displayed the effectiveness and practicality of the idea by showing its possibilities in a pilot project, supported by Professor Guy Standing (the author of The Precariat Charter), where over 18,000 Indians (men and women and children) were given '300 every month directly deposited into an individual account. Children were given '100 a month, and interestingly the mother was given the authority to operate the account. Preliminary results indicate a substantial jump in all human indicators, from nutritional to learning outcomes.
It’s clear that the government has embarked on a journey that’s going to see digital technology play a big role in the delivery of services, rights and entitlements. In fact, that’s the core of electronic and mobile governance. It is, however, critical to ensure that digital technology is not seen only as a tool to bring about macroeconomic fiscal efficiency.
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