Thursday, 10 July 2014

`Wasteful' tag on rural job scheme, Aadhar may stay

The economic survey has partly endorsed UPA’s welfare strategy by endorsing cash transfers to needy sections, but warned against wasting resources through the rural job guarantee scheme and large-scale food and fertiliser subsidy.Cash transfer of entitlements to those living below poverty line using technologies such as biometric identification would be viable, it said, hinting at continuation of the Aadhar-based direct cash transfer scheme (DBT).
The Modi government’s first survey pointed out that not all the money put into subsidy schemes reaches the poor and attributed rise in fiscal deficit after 2008-09 to increase in subsidies.
“Subsidy programmes are particularly problematic when they hamper changes in prices and the consequent shifts in resource allocation.
Therefore, it is increasingly feasible to identify BPL households and give them cash,” said the survey. “New technologies of biometric identification and payments through mobile phones have created a range of new possibilities,” it said, adding that these were cheaper than subsidy programmes.
The survey highlighted that major subsidies in 201314 touched Rs 2,47,596 crore, well above revised estimates.
It pointed out that in categories such as fertilizer subsidy, expenditure causes a distorted resource allocation that hampers productivity.
It argued that food subsidy has been increasing owing to the widening gap between economic cost of procurement by Food Corporation of India and the central issue price fixed under the Public Distribution System.
The survey argues for an urgent revamp of UPA's flagship Mahatma Gandhi National Rural Employment Guarantee scheme to “prevent its misuse“ and create “meaningful“ infrastructure. It was pointed out that while the scheme is demandbased and panchayat-centric, on the ground the role of grassroots institutions such as gram sabha is missing.
In some places, only women are interested in availing of work as market wages for men are much higher, resulting in small, less useful projects being undertaken rather than big, tangible projects.
“So, there is an urgent need to revamp MGNREGA to make it more development oriented programme creating tangible and meaningful assets and infrastructure, including tourism related infrastructure or some agriculture related activities,“ it said.

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