Uddal Singh, a retired Indian army sergeant, is part of an experiment trying out radical changes to the Indian welfare system that the government plans to adopt nationwide — and he is furious.
He, along with the 250,000 residents of Kotkasim, a bloc of Alwar District in western Rajasthan state, were chosen to be part of a pilot scheme to end the sale of subsidized kerosene, a fuel used by the poor for lighting and cooking.
Instead of buying it at a heavily discounted rate at the local government shop, those with ration cards were each — in theory — paid cash by the government and required to purchase the liquid at the market price.
Photo: AFP
“Since one year, no money has come into my account, not one paisa [cent],” the mustachioed 58-year-old said bitterly in the village of Budhi Bawal, a dusty one-street settlement of a few thousand people, mostly farmers.
Instead of lighting his kerosene lamps, he says he now makes do with candles at night.
Officials “come here to the shop, see the record of our ration card numbers and say the money will come,” he said outside the grubby Fair Price Shop run by the local government dealer.
The Kotkasim trial has been disruptive, tricky to implement and — depending on who you listen to — either a roaring success in cutting wasteful state spending, or a disaster that has caused hardship.
The conclusions are important.
In New Delhi, where the trial is viewed as a model for the future, the government is fast-tracking plans to distribute as much of India’s US$61 billion welfare budget in cash as possible.
India is home to hundreds of millions of some of the poorest people on the planet, who depend on government handouts for survival.
“As long as the money arrives in people’s accounts, the scheme is not a bad idea at all,” village leader Rakesh Kumar told reporters in an interview.
However, he estimates 70 percent of people in his area have had problems receiving the cash.
“We have had to deal with the fallout of the government’s experiments,” Kumar said.
The attraction of paying cash to the poor and leaving them to spend it has been enhanced by two foreign programs which are broadly seen as successful: Mexico’s Progresa-Oportunidades and Brazil’s Bolsa Familia.
Under the cash model, governments can keep better track of the money they spend, cut out middlemen and even make the money conditional on beneficial things such as sending children to school.
They also bring the poor into the banking system, obliging them to open accounts to receive welfare payments.
Nandan Nilekani, who runs Aadhar, the Indian government’s scheme of handing out new biometric IDs, says the system has already reduced fraud.
“When Aadhar is used, in some of pilots, there has been a 20 percent to 30 percent reduction in beneficiaries by reducing duplicants,” he said, pointing to trials in the states of Tripura, Jharkhand and Andhra Pradesh.
Across India, 200 million people already have a new unique Aadhar ID and Nilekani’s scheme aims to cover half of the population, or 600 million people, in the next 18 months.
“On the basis of Aadhaar, we can ensure that the benefit of schemes reach genuine beneficiaries and that there is no mediator,” Indian Prime Minister Manmohan Singh said last weekend.
India subsidizes everything from fertilizer and food to kerosene, so cutting waste is crucial to the government’s drive to rein in its budget deficit.
Yet a welfare shake-up is politically risky and fraught with danger in a country where an estimated 42 percent of children under five are malnourished.
The Indian Public Distribution System is the biggest such scheme in the world, providing subsidized kerosene, wheat and rice to up to one-quarter of all households from rundown shops of the sort seen in Budhi Bawal.
It is also staggeringly inefficient. An estimated 58 percent of grains purchased by the Indian government fail to meet their intended targets, data from the Indian Planning Commission showed in 2005.
However, the results in Kotkasim are described by the top local administrator, Alwar District Collector Ashutosh Pednekar, as “remarkable.”
Figures from his office show kerosene consumption has fallen 82 percent since the cash scheme began, a saving for the government of 1.5 million rupees (US$30,000) per month.
Before, crooked dealers would siphon off subsidized kerosene at 15 rupees a liter and sell it on the black market for around 30 rupees, where it was purchased as a cheap replacement for diesel to run tractors or generators.
Those entitled to discounted fuel also had an incentive to draw their full allotment — up to three liters per month — and then sell it on at a profit.
“The diversion of kerosene for purposes other than cooking and lighting has been stopped,” Pednekar told reporters.
“The moment you start selling kerosene at a market price, the business collapses for those with a business in ‘leakages,’” the 34-year-old added.
Under the next phase of his plan, the sale of subsidized cooking gas cylinders will be phased out in Kotkasim.
In five months, the whole of Pednekar’s Alwar District, home to 3.7 million people, will move over to the cash transfer system for kerosene.
While he conceded people were “not going gaga” over the cash system, “by now, there would have been a hue and cry” if they had not received the money.
In the dusty villages of the trial area, foreign media spoke to households who said the cash had indeed arrived promptly.
However, there was also anger and confusion.
Some complained of surly bank officials who refused to help them; others said repeated complaints had come to naught; many said they had either stopped buying kerosene altogether or were now paying the higher price from their own pockets.
John Blomquist, an economist from the World Bank in New Delhi and expert on welfare programs, says cash transfers can be an effective strategy to cut fuel and power subsidies.
“As countries get more developed, you tend to see fewer in-kind benefits,” such as subsidized fuel, he told reporters. “You can design a great cash transfer system, but it’s really about do you have the mechanism in place to implement well? Can you monitor well?”
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last