Equating cash transfer to vote transfer

By Shreya

Election fever has caught hold of everyone; Congress and BJP both are preparing their pitches and designing and altering them according to their requirements. For the Congress, the Food Security Bill and the Land Acquisition Bill remain the only two main achievements that it could showcase before these elections. Congress is trying to transfer votes by introducing new public friendly policies. Its  new weapon i.e., its direct cash transfer scheme which was projected as a scheme that could act as a game changer for effective governance and targeted delivery of services and subsidies; has finally found its way back.

Direct benefit transfer was one of the factors intended to rescue the party in the general elections of 2014. It was recently implemented in state of Rajasthan as a part of election campaign. However, the implementation problems blunted the DBT in Rajasthan. The benefits from the scheme never reached the beneficiaries but were rather diverted due to the lack of supporting mechanism needed to ensure its proper implementation.

In order to understand the linkages in DBT we need to understand its structure. According to ‘The Economic Times’, the DBT process is essentially an assembly of two parts. The first part is the aadhaar number, issued by the unique identification authority of India (UIDAI) to every Indian. Many beneficiaries have already received their codes. However, all individuals especially the beneficiaries, are still not covered under this scheme.

The second piece is the linkage of this aadhaar card number to a bank account number, which is the job of the banks. However, the seeding process (i.e. the linkage process) went too slowly. Due to illiteracy and lack of the information, many individuals are still unaware about the working procedure. Added to that pops up corruption and bribery– the most reasonable and expected outcomes of any scheme implemented in India. When the government took the decision to implement DBT for LPG cylinder sales, the reason was to ensure and compel people to get aadhaar numbers, but as soon as this happened it became even more difficult for individuals to obtain the number as the officers began to ask for heavy bribes.

The simple fact is that there is a lack of administrative preparedness for organising an event of that scale. There are no proper criteria and working plan laid by the government and any working committee, there is paucity of data about the individuals because of which there is still ambiguity over the issue of identification of beneficiaries. The question of HOW THE BENEFICIARIES WILL BE IDENTIFIED still remains unanswered.

Considering the case of 3 districts of Rajasthan where DBT was launched- Ajmer, Alwar and Udaipur- show the adverse effects of incomplete linkages and confused and abrupt implementation. Of the 325,590 registered beneficiaries present in these 3 districts, only 31% had an aadhaar number and only 12% received DBT i.e. a high amount of leakages have been registered or it may be the case that  the system has not been put into place properly.

Despite all these shortcomings, the hurry with which the scheme has been pushed through the pipeline just gives one indication i.e. the political motive, because it’s obviously a big mistake to set the deadlines when it is actually not clear whether the supporting factors are in place or not.

However, a poor return of electoral capital from DBT in Rajasthan soon made many congress members complain of the system that was in place. Therefore, despite the high profile campaign about the scheme’s merits, it has now been delinked from aadhaar cards in case of LPG, reversing major reforms ahead of elections and delivering a blow to the scheme. Congress leaders complained that asking a customer to first buy gas cylinders at market price and then paying the subsidy into person’s bank account was complicated.

So it seems that Congress once again has withdrawn its new initiative. However, Nandan Nilekani, the man behind UID, has criticised government’s decision and this has also led to a great confusion and loss for banks.

A World Bank study recently reported there is a direct link between cash transfers and voting behaviour. It was found beneficiaries express a stronger preference for the ruling party that implements and expands cash transfers. So it has been criticised that the Congress introduced the system in order to gain political mileage, but pushing a policy through the pipeline which is currently not supported by the existing infrastructure of the country for self interest—is it justified?

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