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Saturday, January 24, 2015

Special Report: Why Chhattisgarh State Ration Shops Are Turning Away People Without 'JDY Bank Account'?

This is probably part of the national push to replace food rations with cash transfers. In the first week of January in Chhattisgarh, many people who went to government ration shops to collect their month supply of food grains were turned away because they did not have bank accounts.

It is usually the poor who do not have bank accounts. So, for a couple of weeks, it was those in the greatest need of subsidised grains who went without them.

Sumitra Dhruv, a grassroot activist who lives in the state's Dhamtari district, recounted the case of Sonai Bai, a 50-year-old Gond woman from Pharasgaon village. "The old woman came to us seeking help with opening a bank account," said Dhruv. "The ration shop owner had told her she would not get her rations until she had one."

The nearest bank from Sonai Bai’s village was 20 km away. "It took more than one visit to open the account. For poor people like her, the cost of travelling up and down was too much."

Ashok Vishwakarma, a driver in the town of Ambikapur in north Chhattisgarh, had a similar experience. His wife had to open a bank account before the family could get their food rations. In Chhattisgarh, ration cards have been issued in the name of women, a majority of whom do not have bank accounts.

But what does a bank account have to do with food rations?

On January 22, national newspapers reported that a high-level panel on food security had submitted its report to the Modi government. Among other things, the panel recommended that the government implement a system of cash transfers instead of the current public distribution system, which directly delivers the food grains to those who need it. The move to cash transfers, also called direct benefit transfers, could save the government Rs 30,000 crore annually, the panel is reported to have said.

The recommendations are well aligned with the Narendra Modi government's policy preferences. Starting on January 1, the government has rolled out cash transfers for cooking gas subsidies across the country. In recent speeches, Prime Minister Modi has said that cash transfers could soon cover education, health, fertilisers and food. It is food where the move is likely to be most contentious, particularly in states like Chhattisgarh, which even though they are ruled by the Bharatiya Janta Party, have adopted a different approach to welfare.

In 2012, when the United Progressive Alliance government in the centre mooted the idea of cash transfers, Chhattisgarh chief minister Raman Singh stuck his neck out, opposing any dilution of the public distribution system. In December that year, the state assembly passed a resolution that asked the central government to exempt Chhattisgarh from its plans to replace food rations with cash subsidies. The state government reiterated its stand in a meeting with the (now defunct) Planning Commission in Delhi in August 2013.

Singh has been opposed to cash transfers because his success with reforming the public distribution system has not only won him accolades, it has been key to his electoral success. He initiated wide-ranging PDS reforms in his first term in office. The reforms plugged leakages in the supply chain and expanded the coverage of the scheme to more than two-thirds of the state’s population, getting him another two terms in office.

With a change in government at the centre, Chhattisgarh appears to be rethinking its stand. This week, the Hindi newspaper Navabharat published a report that said that Chhattisgarh would become the first state to implement cash transfers for lentils, sugar and kerosene. Only rice would be distributed at ration shops, it said.

The government has issued a denial to the report. But it has found it hard to explain why ration shops are forcing people to open bank accounts. "No decision has been taken on moving to DBTs," the secretary for food and civil supplies, Alok Shukla, told Scroll. But in that case, why were bank account details being sought at ration shops, and did that indicate that the government was laying the ground for direct transfers? "Preparing for DBTs is different from taking a decision on them," Shukla said.

Any decision on direct transfers would have to take into account problems that an old Gond woman like Sonai Bai is likely to face if her monthly supply of food rations is replaced with cash. If the nearest bank is about 20 km from her village, would she be able to bear the cost of accessing the government subsidy? After she withdraws money from the bank, what if there are only a few private food shops near her village, which lies in a forested area? Wouldn’t those shopkeepers jack up prices, reducing the amount of food she can buy with the money?

"We would have to move very carefully with DBTs,” admitted a state government official who did not wish to be named. "There is a case for introducing DBTs in places that are well-connected. After all, why should the government lose money in buying and supplying food grains through a leakage-prone system when it can instead rely on technology to deliver cash into accounts? But in rural and tribal areas where connectivity and markets are poor, we need to tread cautiously."

But there’s a view in Raipur that caution might take a backseat to political expediency. If the desire to win popular support led Chhattisgarh chief minister Raman Singh to reform the PDS, the need to curry favour with Prime Minister Narendra Modi could push him to dismantle it too.

On Thursday, the Right to Food campaign in Chhattisgarh released a statement to the press. “Children are able to eat dal (lentils) only because the government supplies two kilos of it every month. If the government gives Rs 70-80 in its place, it won't help fill the nutrition gap. People do not have the time or the money to spend on travelling to the bank to collect such a small amount. 

Nationwide studies have shown that a family gets to eat food only when physical rations are made available. Cash money gets spent on other things. Women do not have control over it. A move to DBTs would wash away ten years of hard work to improve the public distribution system."
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