Expanded PMUY - II

Behind every development statistics, there is a human story. My last post on this topic was liked by so many because I showed the human side of this exercise. Today I plan to discuss some broader issues with this exercise.

India as a country experimented with both socialism and capitalism. There were positive and negative points with both these systems.

The basic problem with socialism was that it curbed human initiative and the growth rate of a country suffers. People work, not for patriotic feelings, but for self-growth. When socialism takes from the successful and gives to the “Have-nots” it creates a lack of interest among the capable people to work. As such individual enterprise suffers and subsequently the growth that a country could have achieved.

Capitalism, on the other hand, encourages individual initiative but it creates a massive disparity between the rich and the poor. This disparity results in social upheavals and violent revolutions.

It is not that the policy planners of India did not know that. Welfare schemes were launched from long back. The subsidy bill of the union budget of 2011-2012 was 1.44 trillion rupees whereas planned expenditure was 4.41 Trillion Rupees. I am intentionally giving a pre-BJP government figure to show that social welfare was on the agenda of all governments since independence.

However, the sad and bitter truth is that a microscopic part of that social welfare expenditure actually reached the intended recipients. Most of the social welfare measures gave rise to the creation of a mafia and leakage of government funds.

So the greatest challenge in any planning activity is to see that the fund allocated to social welfare does reach the intended beneficiary. If you watch the actions of the current government you will see that – they were concentrating on this leakage since the beginning

The first initiative was – Pradhan Mantri Jan Dhan Yojana. This was the first step in the fight against the leakage in the welfare funds. The second was PAHAL or DBTL. Please note that these were major structural changes in the way of transferring social welfare to the intended masses.

Although politically not correct to state, but demonetization did bring in money to the zero balance bank accounts. Despite the initial trouble a lot of poor people who had opened zero balance accounts benefited because their accounts were used to park funds by the corrupt. While taking out the money a percentage was left with them on account of their hospitality.

We Indians are fundamentally corrupt. Externally we praise Anna Hazare and curse Vijay Mallya but internally we admire people like Nirav Modi and Vijay Mallya.

When major structural changes in the economy are done – the outcome cannot be easy or smooth. The famous innovative capability of the Indian to find a loophole in the system will be put to maximum use.

The biggest challenge for the implementation of the Expanded PMUY is to see that the real poor do get the benefit and the funds do not get diverted to the rich people.

The catch 22 situation is – if you make the norms too stringent some poor people will not be benefited. On the other hand, if you relax the rules the option of leakage of fund opens up.

The Expanded PMUY basically relaxed the norms a little bit. However, the ration card still remained the main borderline to decide who is eligible or not. But come to think of it – is the integrity of the ration card foolproof? I do not think so. Many eligible people do not have any ration card.

Secondly, the people who do not have the ration card still do not come under the relaxed norms of the expanded PMUY because they do not have the other documents also. This is the biggest challenge and I do not know how the policymakers plan to overcome this problem.

Working in the field I think there is a fundamental difference between welfare measures launched earlier and welfare measures launched now.

The Govt under Hon’ble Prime Minister Narendra Modi has completely changed the rules of the game. Instead of the villagers coming to the administration the administration is made to go to the villagers. When I walked into a village and meet the people they understand that fact and start hoping that something good is going to happen.

Two earlier schemes have brought in an element of trust for the Prime Minister’s initiative – Firstly the Jan Dhan Account Scheme has been utilized by many villagers to open zero balance bank accounts and secondly the flow of money into these accounts among the people who participated in the Pahal Scheme, cemented that trust. So the basis for the element of faith on the government was created.

Before I end my musings, let me state that although in two different ends of the political spectrum, our current Prime Minister has a great amount of similarity with one Ex-Prime Minister, namely Late Indira Gandhi.

Both of them understood the pulse of the common man. Secondly, both of them were strong personalities and dared to take harsh decisions. Both of them had a streak of authoritarian behavior. Both of them command immense popularity among the poor and the marginal.

People like us fall in the bourgeois class. At this moment let us wholeheartedly participate in the welfare policies framed by the government. History will tell how right we were.

Let us forget political affiliations for the time being.

(I shall again write a human story in my next blog on this subject. Some of you may find this blog a bore. :) )