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The belief in the Sonia Gandhi-led
National Advisory Council (NAC) that it was the rural employment
scheme, and not the nuclear deal, which led to the Congress's 2009
victory, might be an exaggerated assessment. But a similar policy
of empowering the underprivileged through a policy of cash
transfers is likely to help the party cross the electoral Rubicon
in two years' time.
Although the issue of the government directly depositing cash in
the bank accounts of the needy has long been in the public domain,
the government has been reluctant to take any initiative till now
because of stout resistance from the opposition parties. Even
today, critics of the measure remain active. Among them are not
only the habitual nay-sayers - the communists - who have a problem
for every solution but also the former civil society activists
under Arvind Kejriwal, who have now formed the Aam Admi Party (AAP).
They see the cash transfers as a bribe to voters at the
tax-payers' expense. But so was the employment scheme, which
guaranteed a payment of Rs 120 per day for nearly three-and-a-half
months of manual labour. The advantage, however, with cash
transfers is that it eliminates the middlemen who are responsible
for the "leakages" in the employment scheme. As a result, the
longstanding calculation that only a fourth of the doles meant for
the poor reaches the target, as Rajiv Gandhi suspected, will no
longer vitiate the subsidy regime. What is more, an effective
control of the subsidies will bring down the inordinately high
fiscal deficit.
There may be problems, of course, as there are with any project.
One of them is the possibility of the cash being misused via
expenditure on items for which the grant is not meant. But such
criticism underlines a paternalistic outlook, which presupposes
that the government knows better what is good for the recipients
than the latter themselves. Another problem is the misdirection of
the cash transfer to accounts which are in the names of
non-Indians, e.g., illegal Bangladeshi immigrants, as has been
suggested, since the biometric identity proofs under the Aadhar
scheme do not certify the person to be an Indian citizen. But this
is too far-fetched a possibility to be taken seriously.
However, what the floating of these ideas suggests is that the
opponents of the move will go to any length to discredit it. Their
objective is clearly political since they seem to have realized
that the new scheme may be of considerable benefit to the
Congress. True the Congress itself is motivated by the same
objective. But that should not lead to the trashing of an idea
merely because it has been advanced by the ruling party at the
centre. Instead, the focus should be on a clear-sighted
examination of its pros and cons and to give it two cheers if the
plus points outscore the minuses.
Politics in India, however, rarely follows such a logical course.
Hence we see the curious spectacle of the opposition parties
frustrating the government's efforts in a direction which they had
supported when in power. Foreign investment in the retail sector,
for instance, was on the Bharatiya Janata Party's (BJP) agenda
when it ran the government at the centre, but it is now vehemently
opposing the measure.
While politicians are calculating the gains and losses of their
parties vis-a-vis the new scheme, which is being tried out in
India for the first time unlike in Latin America, especially
Brazil, where it has been in vogue for several years, the
ideologues are looking at cash transfers through their customary
tinted glasses. One of their objections relates to a spurt in
inflation, which may be caused by the infusion of a large amount
of ready money into the economy. The other is the dependency which
the beneficiaries may develop with the unearned income flowing
into their bank accounts. However, the second trait has also been
regarded as unwarranted since, except for a few wayward
individuals, the indigent are unlikely to act as spendthrifts.
Instead, they will learn to save and invest.
Left-wingers like the economist, Jean Dreze, have welcomed the
cash transfers, but with the proviso that these should supplement
the "public provision of health, education and other basic
services", as in Brazil. But, in their blind preference for the
public sector, they have overlooked the dismal state of primary
health centres and government-run schools, especially in the
villages and small towns. Arguably, the extra money for the poor
will enable them to opt for better hospitals and schools in the
private sector.
Although it will obviously take time to prove whether the new
scheme will be a game-changer, as union Finance Minister P.
Chidambaram and Rural Development Minister Jairam Ramesh believe
it to be, it should be allowed to run its course and not
castigated by the opposition parties from the start.
Amulya Ganguli is a political analyst. He can be
reached at amulyaganguli@gmail.com
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