governance, political economy, institutional development and economic regulation

Hello government calling

Helping the poor is a complex  balancing act between tolerating the fiscal cost of leakages to ineligible persons and the social cost of a perception of inequity because of unfair exclusion of eligible persons. A similar amount as dole for all poor households (the new politically correct term for a “cash transfer”) irrespective of their distance from the poverty level, creates the piquant situation of making the last eligible household at the line of poverty, richer with the dole, them the next (but ineligible) household  just above the poverty line. A tapering cash transfer amount (similar to the inverse of the Income Tax regime, where the cumulative tax proprtion keeps increasing, as income increases, but the next above person does not loose out on the nominal benefit of the person below) is one way out of this trap, but it is complex and expensive to assess and administer. In practise this would require computation of the annual income of each the 70 million poor households; an onerous task which would cost too much relative to the meager amounts the government can afford to pass on to the poor.

The other option for “targeting” the poor, is to subsidise “inferior goods” which the rich  would never use. The downside is that this requires the creation of an artificial market for “inferior goods” dependent on government subsidy (rarely an efficient option) and the adverse social stigma that such goods attract. The definition of “inferior goods” also changes. The Mahatma made Khadi ultra chic. Coarse grains, once the food of the poor, are today the “healthy” food of choice of the elite, while the poor eat white bread.  Also the range of such goods is too limited for extensive use as “cash support/subsidy” mechanism. A varient is the “food for work” programs which automatically restricts employment and hence income, to those who are willing to do manual labour. Ofcourse, these are not suitable for the poor who are aged, sick or are kids.

The third option is to subsidise socially beneficial actions by providing a financial incentive to a family for getting girls educated, kids vaccinated in time, regular pre natal care to mothers and medically supervised delivery, but all this only if they access “inferior institutions” like government schools and health clinics, which are not the service providers of choice of the rich. 

Irrespective of the subsidy/cash transfer model used, a common element is the capacity to monitor and evaluate the impact of the intervention on atleast an annual basis. Unfortunately we do not monitor development outcomes as closely as we monitor inputs (the number of kids vaccinated, number of  mothers provided pre-natal care etc). Had outcomes like disease prevelance levels and maternal and child health indictors been monitored closely, we would not have 40% of Indian kids who are malnourished. This illustrates the need to improve program implementation.

The fulcrum of program implementation in India is the 660 districts manned by officials of the state governments and led by the “steel frame” (IAS, IPS, Indian Forest Service) which have a notional, dual allegiance to the Union government and the states . This administrative structure continues despite the 1992 constitutional provisions for decentralising powers and finance to elected leaders at the local level because the state governments are loath to transfer powers downwards to local political leaders; a replica of how the Union government behaves with the states. This stalemate ensures that the District Commissioner/Magistrate (an institution handed down by the British) is key to making or marring a development program. The average District Magistrate has a multidisciplinary team of between 50 to 100 qualified officials representing all the departments and ministries working with her. She is the “district level” version of the Governor of the state, an unelected official with significant administrative powers. 

At the district level, there is hardly any real time information available on the outcomes of a program. Information becomes available, with a lag, of two to three years. District Magistrates and their colleagues, visit villages in their districts during the winter season to review development programs and the status of the rule of law. An updated dashboard of socio-economic indicators of the village they are visiting, is rarely available to them, for making a rigorous evaluation on the spot. Instead, officers rely on anecdotal evidence, which varies, according to how it was obtained and how well it is triangulated. It doesn’t have to be this way.  

Poverty data, based on assessments of household consumption, is collected on a five year rotation, but an annual rapid survey of household consumption is possible using internet enabled tablets, connected through the telecom network, to a central server. This can make real time data available at fairly reasonable costs. Once everyone has an Aadhar card and can be uniquely identified it will be relatively easy to monitor the economic status of the poor. The poor frequently migrate, within the country, for jobs. Till now migration resulted in duplication, misue or the emigrant dropping out of the social protection system. With the UID, migrants can be identified anywhere which makes  Aadhar a major technological breakthrough for identifying and benefiting the poor. 

India is perceived worlwide as an IT superpower. Indians abroad are routinely approached by non Indian friends to fix an IT problem, on the mistaken perception that all Indians are Math geeks and IT experts!! The reality back home is unfortunately very different. Undoubtedly e-governance (the manner in which citizens interact with government to get public services) has changed dramatically since the time the electronic railway reservation system was launched in the 1980s. The achievemnets however are still way below potential.

The government still doesn’t use  telecom technology and social media for assessing the impact of its programs despite ample international evidence that handheld computers and social media apps are invaluable realtime guides for program implementors. CB Naidu as CM Karnataka (1995-2004) used to review all his districts every morning using Video Conferencing. 10 years later, VC is now a clunky tool; good for conferencing but inefficient for gathering real time data which is best done through a smart phone or tablet. The government meanwhile is still entangled in paper based systems. The missing coal scam files illustrates this antiquated oddity.  Going electronic is an indivisible concept. It cannot be done efficienctly in a piece meal manner. The entire chain of command, from the President of India through the Prime Minister to the village level worker needs to be able to access the same electronic platform for strictly regulated and supervised official use and interaction. Only then will we be able to turn the page to the 21st century. The fight against poverty must be SMART (Specific, Measurable, Attributable, Results oriented and Timebound) if it is to succeed.



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