February 22, 2020
Home  »  Magazine  »  Business  » economy: subsidies »  The Budget Sets Foot In Kitchens

The Budget Sets Foot In Kitchens

An experiment in cash transfers in a Delhi slum gets a mixed reception

The Budget Sets Foot In Kitchens

Sharoon is among the hundreds from the slum settlement of Jahangirpuri, in northwest Delhi, who are protesting against government plans to remove ration supplies from fair price shops or PDS outlets and instead ‘empower’ people by giving the subsidy amount as cash transfers  directly into their bank accounts. With 13 members in the family to feed, Sharoon puts it rather bluntly: “In our house, the money could end up being used for something else, given the many demands. I’d prefer to get rations.”

On since June, the agitation by poor families from the jhuggi-jhonpri clusters, or JJ colonies as they are known, of Jahangirpuri, has stalled the Delhi government’s plans to replicate the pilot project carried out last year in Raghubir Nagar in west Delhi organised by sewa Bharat, funded by the UNDP. Female heads of 100 families were provided Rs 1,000 each in their bank accounts with the freedom to buy what they liked.

Almost all of them reported they were happy with the experience, says Renana Jhabvala of sewa Bharat. The report compiled by sewa states that the PDS outlets in the colony started functioning well. There was no drop in the food items consumed by the families, with many even buying eggs or meat with the money. Households with elderly members, in particular, were reported to have used the funds for medical care. “What we have recommended is a policy of choice,  and of not immediately jumping into cash transfers,” says Jhabvala.

Some people fear that cash transfers to accounts would end up being used for other purposes than buying food.

The reasons are obvious: despite its many flaws, the PDS remains the lifeline of poor people, particularly in tribal and backward areas. Calling the Raghubir Nagar project a failure, Pushpa, of Bhalaswa Lok Shakti Manch, says the claims in the report are exaggerated: her team’s study in the same area has reinforced the fear that there’s no way the money can stretch to provide enough food for the family. “We want PDS outlets to continue functioning. We don’t want a repeat of what happened when pulses went out of the PDS—at present prices, it has gone out of most poor people’s daily diet,” she says.

Despite the continuing protests in Jahangirpuri, the Delhi government is moving ahead with plans to provide two lakh vulnerable families with Rs 600 in cash transfers every month. A total of Rs 144 crore has been allocated for the project to be implemented in 920 jhuggi-jhonpri clusters across the state.

There have been other protests—Ashok Khandelwal, an advisor to the commissioners of the Supreme Court, stresses that his study of cash transfers in place of subsidised kerosene sale in Kotkasim block of Ajmer has revealed that “those who really need it stand deprived”. Even ten months after the start of the pilot scheme, 10,000 out of 25,000 eligible families don’t have no-frills  bank accounts, Aadhar or UID number, and so are kept deprived. The operation of the scheme is so cumbersome that a large number of families are not availing the subsidised kerosene. All the sarpanches in the area have jointly filed a PIL and 34 PDS shop-owners have refused to lift kerosene during the last five months. As Khandelwal puts it, the scheme is resulting in “deprivation by design!”

Next Story >>
Google + Linkedin Whatsapp

Read More in:

The Latest Issue

Outlook Videos