Privatisation is a panacea for all ills. That is what the World Bank thinks, suggests, propagates and pushes full-steam around the globe, despite fierce criticism and condemnation from several countries, people, experts and civil society groups. The world over, the bank’s privatisation policy has led nowhere, achieved nothing, as is well documented by different scholars including Nobel Laureate economist Joseph Stiglitz, who worked with the bank from 1996 to 1999.

The bank has pushed privatisation in public services such as health, education and water in different countries of Asia, South America and Africa. It has only added more problems than solutions. In many countries, the bank was accused of deliberately imposing it as a condition for access to its loans.

In India too, the latest report released this week by the Washington DC-based lender on the Indian social sector comes in the same opinion mode. For the public distribution system (PDS), the World Bank report has favoured cash transfers, something many policy makers are supporting now. “In the medium to long term, the report recommends offering households the option of a cash transfer while continuing food-based support for specific situations…,” said the report titled ‘Social Protection for a Changing India’.

“There is room for much more active engagement with the commercial private sector also, including in areas such as public grain distribution, targeted credit and livelihood interventions for the poor…,” it held.

The report prepared at the request of the planning commission said PDS is suffering because of high leakages and weak administrative policies. In the two-volume report, the bank talked about how “large internal bureaucracy” of the Food Corporation of India (FCI) was resisting PDS reforms. “We do realise that there are challenges in terms of the size of institutions and vested interests,” said World Bank chief economist John Blomquist.

The World Bank’s argument seems to be an extension of the planning commission’s idea, which has also favoured cash transfer. Plan panel deputy chairman Montek Singh Ahluwalia himself recommended cash transfer which he thinks can curb corruption and plug leakages.

However, there are different sections in the planning commission who think it is “stupid to abolish PDS”. Abhijit Sen, a planning commission member, said, “Under targeted PDS, we are supplying food where the poor are, and not where there are shortages. The main objective of food management or the PDS should be to stabilise prices.” He also pointed out that the mess in PDS is largely a result of shifting to a targeted PDS from a universal PDS in 1997. Even the national advisory council (NAC) recommended against the cash transfer.

Grassroots NGOs also do not support the bank’s new report. Ration Vyvastha Sudhar Abhiyan, a Delhi-based NGO, last month released a report said that Delhi slums dwellers do not want cash transfer. “Ninety–nine percent of Delhi’s slums want an improvement in the PDS system and not cash transfer,” it said. “Around 84 percent respondents felt that inflation would soon reduce the value of the cash and would not be able to purchase the grains.” Deepa Sinha, member, Right to Food Campaign, told Governance Now last month, “Once the amount is fixed for the scheme, it will remain for years.” The Delhi government has been conducting a pilot survey on 100 people in Raghuvir Nagar from January to June.

The problem with the cash transfer is also identifying the beneficiaries. When prodded further on this issue Blomquist became cautious. “I am not going to leave the impression that there should be complete abolishment of PDS but in future. One may think about a more cash-based system,” he said.

Blomquist’s argument does not absolve the World Bank’s failures worldwide in the past. In Ghana, the health insurance scheme it presented was criticised as “unfair, inefficient and un-transparent”. Also, there was public outcry in Ghana against its water privatisation push. In 2007, the government in Italy withdrew support from the bank’s water privatisation agenda. The private pension scheme supported on the bank’s line has developed cracks in Poland.

Shouldn’t the bank consider a total overhaul in its working style instead of suggesting the local governments what to do?