OPINION: Populist policies are short-cuts to power

In a desperate bid to shore up its dwindling support base, the Congress-led UPA regime has now resorted to cash handouts. But this is no substitute for good governance.

The Union Government has announced that it will directly transfer cash subsidies into the bank accounts of beneficiaries via their Unique Identification Numbers from January 1, 2013. The objective of this scheme is supposedly to plug leaks in the system and prevent corruption caused by middlemen.
However, the Government has, at the same time, also said that getting a Unique Identification Number under the Aadhaar scheme is not mandatory but voluntary. The most dangerous part of the Aadhaar scheme is that it is for every ‘resident’ of the country, irrespective of the kind of documentation they may or may not have. In other words, individuals without any valid documents can also get a Unique Identification Number under the Aadhaar scheme even though the new number will not replace other forms of identification.
This puts a question mark on the scheme and opens the flood gates of corruption as Aadhaar benefits can also be enjoyed by those who may not be citizens of the country. The UID charter says that the ID number does not establish citizenship and it is for anybody residing in India.
But what does this mean? Is UID duplicating the Census of India? Why should the Indian Government issue any form of identification to a foreigner who is already in the country on a valid passport and visa.
One does not have to spend thousands of crores of rupees to get a useless piece of information regarding how many non-Indian citizens are residing in the country at any given time. All official entry points in to this country are controlled by immigration and customs agencies, and they have all the necessary information. What may be required is coordination between the several Government agencies that man the borders.
But coming back to the Government’s recently launched Direct Cash Transfer scheme, it is amazing that the programme is based on the Unique Identification Number, which is not even mandatory. This is not legally sustainable. Also, it is quite possible, and in fact it is bound to happen, that illegal immigrants, terrorists or just about anybody over-staying their visa in India will enjoy the cash subsidy that will start flowing in from January 2013.
The entire Direct Cash Transfer scheme is ill-conceived. And this is not even to mention the fact that it uses tax payers’ money to pay for the subsidies. In the financial year 2010-11, the Union and State Governments spent a total of Rs3.69 lakh crore in the social welfare sector (education, healthcare, social security, etc). The total amount of Union Government subsidy in the social sector in 2011-12 was Rs1.62 lakh crore.
The Congress-led UPA regime at the Centre says that ‘e-transfer’ of money will cut down corruption and delivery delays. But the Government simply does not have adequate infrastructure to do carry out this scheme. Even in a city like Delhi, the Government-run internet service provider remains out-of-order at least 25 per cent of the time. One can only imagine the conditions in the rural areas, where even electric supply is not only erratic but sometimes is missing for days together.
In its report to Parliament on December 13, 2011, a Parliamentary Standing Committee that considered the National Identification Authority of India Bill, 2010, in fact rejected the biometric data-based identification system. The report is actually a severe indictment of the hasty and directionless project which has been “conceptualised with no clarity of purpose”.
If the Union Government still sincerely believes that the benefits of the scheme will reach the poor, then it is either blissfully ignorant of the realities on the ground or it is deluding itself and hoodwinking the people. The result of all this is that the common citizen has to suffer at the hands of corrupt bureaucrats. The corrupt extort money and the others have little choice but to pay up.
Also, let us not forget that nothing happens at the bank for free. Even the opening of a bank account has a price tag attached to it. Similarly, loans too can only be availed from banks at a price. When I discussed this issue of direct transfer of cash with a retired banker, he unhesitatingly admitted that the scheme was another avenue for the bank and in some cases the Post Office to make some more money. He added jocularly that bankers had the right to take a cut as all beneficiaries were getting the money free of cost. Against this backdrop, the Government must perhaps be reminded of a financial inclusion survey conducted by the World Bank, which found “only 35 per cent of Indians had accounts in formal financial institutions. This number dwindles to 21 per cent amongst the poorest. Recent assessments on social pensions — an existing cash transfer scheme — shows that opening bank accounts is tough for the poorest”.
Consequently, then, unscrupulous employees at the bank will now have another opportunity to make money on the side. Worse still, the customers will have few choices when its comes to grievance redressal, as lodging a complaint against an unscrupulous official will be like opening a Pandora’s Box. The accused bank employee will simply ensure that even legitimate work of the complainant never gets done. This is happening every day already.
The cash transfer systems of Brazil and Mexico are touted as examples that India is following. But only about five per cent of the population of both those countries is below the poverty line. In India that figure is anywhere between 37 per cent and 46 per cent.
The Government’s Direct Cash Transfer scheme also has another worrying aspect. For example, when it gives a pregnant woman a certain amount of money, it is essentially telling the so-called beneficiary to deliver her baby at any medical centre but without first strengthening the country’s overall healthcare infrastructure. In fact, the cash scheme is little more than another means of purchasing votes. The UPA Government is clearly taking a short-cut. Instead of delivering to the people good governance, it is luring the voters with cash.
But then again, all political parties that are in power, without exception, indulge in populist tactics such as this Direct Cash Transfer scheme, with a view to garner votes. ‘Flexible morality’ is the reigning mantra these days.
Think of how minorities are pampered through special grants and community-based reservations. Our leaders should bear in mind that good governance alone is ultimately the best politics, and the only sure-shot way to stay in power.

(The author is Former Director, CBI, India.)