October 24, 2020
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When Direct Cash Transfers Don't Work

Money can't buy you this "development thing" — at least not when it is thrown like this under the latest "plan" in which the centre has tasked Maoist-affected districts to suddenly expend Rs 25 crore each by March 31.

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When Direct Cash Transfers Don't Work
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After months of internecine turf battles within the government, involving the Planning Commission and various ministries, the Integrated Action Plan (IAP) for development of 60 districts most affected by Left Wing Extremism (LWE) is finally on track. The bureaucratese, translated into plain English, means that New Delhi is directly granting Rs 25 crore each for development works to 60 Maoist-affected districts this year. Next year, the grant will go up to Rs 30 crore for each district. It is ostensibly aimed at quick resolution of problems of healthcare, drinking water, education and roads where a team comprising the district magistrate, the superintendent of police and the district forest officer shall undertake development works of their choice in the district.

Lest it be so misconstrued, money has never been an issue for undertaking development in these districts. Planning Commission’s website has the details of adequate funding provided in these 60 districts for centre’s 10 flagship schemes, including the NRHM, PMGSY, SSA, RGGVY and MGNREGA. A “performance study” the Commission conducted in these states and submitted to the government in January this year shows that nearly half the money allocated on these schemes remains unspent. 

While money under flagship schemes is available, the Planning Commission has created confusion by reminding the District Magistrates that they can only undertake those projects under the IAP, “the funds for which were not available under the flagship schemes.” This is at cross-purposes with the reason offered by the union home minister for instituting the IAP, when he convened a video conference with the District Magistrates of these 60 districts last week and asked them to expend Rs 25 crore by 31st March of this year. 

Mr Chidambaram had earlier explained his rationale thus: “We have cut through all the very refined economic gobbledygook and simply put money in the hands of the three senior most district-level officers, and said 'Go ahead and do whatever you think is doable in a matter of three months, depending upon what the villages need.'" Providing these officers with the liberty to execute area-specific schemes is primarily an exercise by the government to cut red-tapism from bureaucratic procedures which, in the minister’s view, hinder timely execution of development projects.

While bringing speedy development to Maoist-affected areas is a laudable objective, the government’s plan raises a larger question. States, the primary interface between the public and the citizenry, have been taken out of the loop in this scheme. The state governments are elected by the citizens to be answerable for their needs and requirements. If development in 14 districts out of 24 in Jharkhand and 15 out of 30 in Orissa is going to be directly controlled by the centre, the state governments are no longer responsible for half its citizenry in these states. By institutionalising a direct link between the bureaucrats in the districts and the union home ministry, the elected representatives at the state and local levels are no longer stakeholders in the process of development. It is for a reason that the Indian Constitution nowhere refers to a “centre”, but only to a “union” of states.

The states seem to be equally complicit in accepting this new instrumentality: perhaps because they are receiving greater development outlays, without being held accountable for their outcomes. 

Leaving alone the confusion over the projects which can be executed under the IAP by the district authorities, the easy availability of funds and simplified bureaucratic processes are unlikely to deliver desired results. A similar special development package of Rs 20,000 crore, which concentrated on 55 districts and was spread over three years, was instituted under the UPA-1. It did not yield any substantial outcomes.

This essentially boils down to the lack of capacity to execute development projects. Merely enhancing the efficiency of the bureaucratic process will not create that capacity. There are not enough private contractors, government agencies or public bodies present in these districts to undertake development works. This capacity, already severely depleted in backward regions of the country, is further exacerbated by the lack of security in these 60 districts due to the Maoist threat. 

The common political wisdom that development and security are two prongs of a successful anti-Maoist policy — where one feeds off another — is only partially true. “While development is a must, security first” is the mantra which gets the sequencing right.

Otherwise, even at a conservative estimate of 10 percent levy for the Maoists from the IAP projects, Maoist coffers would swell by Rs 330 crore by next year.

In such a scenario, pressure to fully expend Rs 25 crore by 31st March this year will only lead to mis-spending, wastages and even worse, fudging of data by the districts. After all, nine women can’t have a baby in one month, no matter how closely they coordinate their work.

After the Dantewada massacre last year, Mr Chidambaram was under the hammer from leading members of his own party for focusing only on security, allegedly at the cost of development. The improving security situation in the North-East and Kashmir means that more paramilitary battalions will now be available to the centre for anti-Maoist operations. By flaunting his pro-development stance, Mr Chidambaram can safely afford to launch security operations of greater intensity against the Maoists later this year. 

By adopting a prescriptive approach of doing this “development thing”, the UPA government is only trying to lessen its own risk of criticism, when things again go wrong. The real driver for launching the IAP is then nothing but what Yes Minister's Sir Humphrey Appleby called "Politician's logic: We must do something. This is something. Therefore we must do it." 


Sushant K. Singh heads the National Security programme at the Takshashila Institution.


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