The Hindu Business Line : Panchayat kitchens, in lieu of PDS

To tackle corruption, consider a scheme in which panchayats are funded to run kitchens to supply idlis or chapattis on nominal payment or even free, says P. V. INDIRESAN.

This is 210th in the Vision 2020 series. The previous article was published on September 17.

Cooked food for those who register. No serving corruption, this way.

According to the Times of India (September 17, 2007), an estimated Rs 31,500 crore worth of grain has been siphoned out of the Public Distribution System in the past three years, with UP and West Bengal being the worst culprits.

UP has had chequered politics with unstable governments, while West Bengal has had the unprecedented luxury of 30-year long rule by the same party. Therefore, corruption must be inherent to the system and not a function of politics or style of governance. In any case, the Public Distribution System requires a major overhaul.

As other countries do, the Indian government too has elaborate mechanisms for targeting the poor. All such attempts suffer from uncontrolled leakage, not only here but everywhere in the world. Further, such schemes create a powerful (and a relatively well paid) bureaucracy, both inside the government and among non-government agencies.

As a top leader of a charity organisation once confessed, their jobs vanish the moment poverty (rather destitution) is cured. Hence, powerful groups of do-gooders have a self-interest only in mitigating poverty, not in curing it. Welfare workers too are human; they would not like to lose their middle-class livelihood (with an added bonus of a saintly halo).

Some ground rules

Dharma darshan in Tirupati is one system where the poor are not short-changed and get what they want. It suffers from little or no corruption; no poor person is ever turned away. The Tirupati temple avoids the pitfalls of targeted poverty alleviation by simply offering its charity to whosoever asks for it — without any questions asked. As it offers darshan free, all poor persons enjoy the facility without restriction. However, they have to wait much longer than rich, paying, devotees do.

Even then, there is a risk that the poor will sell their entitlement to the rich. Tirupati has eliminated that problem also: every person who stands in the longer Dharma darshan queue gets a stamp of identification on the wrist. It is a simple but effective system of biometric identification.

Then, the ground rules for helping the poor are:

Do not try to identify who is poor and who is not; accept as poor anyone who claims to be poor. Do identify such volunteers biometrically.

Have a special supply for the poor at prices they can afford; ideally that should be free.

As a corollary, offer over-priced luxury services for the rich.

Time constraint

Unfortunately, this system will work only when people can wait for long periods, not if there is a time limit for the required service. Wherever there is time restriction, the system must satisfy an additional condition: there should be no shortage of supply; supply must exceed demand.

Further, product differentiation between what is given to the rich and the poor is crucial. The greater the price differential between what the rich will pay and what the poor can afford, the easier it becomes to cross-subsidise the poor. Unfortunately, price differentials are not high between different types of grain. Even reserving coarse grain such as ragi and bajra for the poor at low cross-subsidised prices is unlikely to succeed because that too may be diverted to feed chicken, which the rich like to eat. As matters stand, there is not enough grain to satisfy both poor people and the chicken the rich like to eat.

The Tiebout model

Cooked food is a different matter altogether. Variation in prices of cooked food is far higher than in grain prices. The rich may buy the same grain or dal the poor want; they will not eat the same food, certainly not on the same dining table as the poor do. (Rich-poor apartheid is universal in dining areas, except during pilgrimages). The rich and the poor self-separate wherever cooked food is served. It is also easier to cross-subsidise cooked food than uncooked grain. Cooked food is also more difficult to smuggle out.

The poor are found generally in remote villages. Hence, the responsibility of feeding the poor will fall mainly on panchayats. Unfortunately, as village panchayats are in far-flung, difficult-to-access places, corruption is an ever present danger. The poor are liable to be short-changed unless the system is transparent and competitive too.

Nearly fifty years ago, C. M. Tiebout explained that civic administrations can be forced to compete with one another by promoting free mobility of people. His idea can be applied to ensure competition in the present case. Consider a scheme in which panchayats are funded to run kitchens to supply idlis or chapattis or whatever on nominal payment or even free.

Biometric identification

Without restriction, everyone should be able to register in the scheme, but biometric identification should be enforced to ensure that only those who formally register enjoy the food. Leakage may be further reduced by insisting that beneficiaries eat on the premises. That rule will also deter the non-poor from enrolling in the scheme. Competition is ensured on the Tiebout model by allowing the customer a choice of where he or she eats.

Here is a scheme closest to what the Tirupati temple practises. No time or effort is wasted in targeting the poor; all are welcome. A more complex biometric mechanism than in Tirupati will be needed here because food has to be provided everyday. Yet, it can remain as simple as a previously registered finger print.

No system functions satisfactorily unless someone or other makes a good living out of it. Hence, panchayats should be given large enough commissions to make it financially attractive for them to undertake the task and even compete with neighbouring panchayats.

Incidentally, this scheme makes it unnecessary for the poor to scrounge for fuel. Often, the poor send their children to forage for fuel and do not let them attend school. Once cooking is avoided, more children (particularly girls) are likely to attend schools.

Will, not finance, required

Here are the raw bones of an idea that may be worth attempting not merely where poverty is acute as in the KBK region of Orissa, but even in rich cities such as Chandigarh, where, too, according to a philanthropist, many families do not get one square meal a day. No doubt, distributing cooked food is messier than distributing grain. It is also a fact that quality control of cooked food is more difficult than with grain, but quite feasible as McDonald franchisees have shown.

The scheme is worth considering at least for pregnant women and nursing mothers because our country has the dubious distinction of being amongst the worst in maternal/infant mortality. Further, when infants are fed well in the first couple of years, they acquire stamina to bear hunger better in later years. Their intellect too is developed better. A back-of-the-envelope calculation indicates that such a scheme will cost no more than Rs 5,000-10,000 crore a year. With revenues being as buoyant as they are, (recently, the government approved a Rs 1,24,000-crore scheme to enlarge Central universities) getting large enough finance is not the problem. Finding enough policy makers with large enough hearts to accept schemes that minimise corruption is the problem.

(The author is a former Director, IIT Madras. Response may be sent to: indiresan@gmail.com)

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