In Kotkasim, sarpanches want scheme scrapped
The gung-ho optimism about ‘direct cash transfers,” the UPA’s chief springboard for the next polls, may have a darker side. Sarpanches of Kotkasim block, Alwar district – where the country’s pilot project for direct cash transfers (DCT) of kerosene subsidies has run since the last 9 months – want the project to be scrapped, if it continues to be shoddily implemented.
“We have collectively written to the collector stating that we are receiving numerous complaints from people. The system will work only if advance subsidies are deposited on time. Three months’ advance subsidies were supposed to be deposited in December itself when the scheme started. But it came late, only once for 2-3 months.
Some have bought kerosene at market
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The much touted reduction in offtake – from 84,000 litres in Kotkasim block before the scheme was launched, to 12,000 litres now – is in fact a combination of plugging diversions and sharp drop in consumption, but the latter not all out of choice.
“Bank accounts have been opened in the name of the mukhiya (household head) who, in many cases, are too old to go the bank a few kilometers away and stand in the queue for Rs33-36 (the subsidy amount per litre). In such cases, someone in the family has to accompany him. In interior villages, where there are no banks even in a 5km radius, this will mean wasting a whole day’s time and wage for availing the subsidy,” said Pooja Yadav, sarpanch of Teovas panchayat.
This has been reiterated in a recent study done by freelance researchers Bharat Bhatti and Madhulika Khanna in Kotkasim, under the guidance of right to food economists Jean Dreze and Reetika Khera. “The poorest households seem to be the worst hit under the new system. For them, going to the bank to collect the subsidy means losing a day’s wages and also transport costs. For some, these costs exceed the subsidy…many households are yet to receive any subsidy, despite shelling out Rs 500 to open a (supposedly “zero-balance”) bank account,” it noted, concluding all this has led to curtailment of consumption.
Ramcharan Meena, district supplies officer (DSO) of Alwar said, “we have conveyed these practical difficulties to the government. They are now talking of introducing mobile ATMs in rural areas which will facilitate easier cash withdrawal. This is only a pilot and we will improve based on its learnings,” he said.
Pros & cons of cash transfers
Reduces transaction costs and problems of storing, transporting and distributing commodities
Plugs leakages in kind
Reduces subsidy burden as huge diversions are checked
‘Freedom’ of household to choose what they want to do with the cash
Cash can stimulate economy and develop local markets
Increases transaction costs for people where banking coverage is poor
Without advance subsidies in place, scheme is a non-starter
Can engender corruption without a monitoring mechanism
Can create conflicts in expenditure priorities within family
Cash can be used in ways that undermine the transfer goal
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