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Cash Transfers and UID: Essential Demands

December 27, 2012

Statement by citizens (signatures below)

We support cash transfers such as old age pensions, widow pensions, maternity entitlements and scholarships. However, we oppose the government’s plan for accelerated mass conversion of welfare schemes to UID-driven cash transfers. This plan could cause havoc and massive social exclusion. We demand the following:

1. No replacement of food with cash under the Public Distribution System. 

The PDS is a vital source of economic security and nutrition support for millions of people. It should be expanded and consolidated, not dismantled.

2. Immediate enactment of a comprehensive National Food Security Act, including universal PDS.

Instead of diverting the public’s attention with promises of mass cash transfers before the 2014 elections, the government should redeem its promise to enact a National Food Security Act (NFSA). 

3. Cash transfers should not substitute for public services.

While some cash transfer schemes are useful, they should complement, not substitute for the provision of public services such as health care, school education, water supply, basic amenities, and the PDS. These services remain grossly under-funded.

4. Expand and improve appropriate cash transfers without waiting for UID.

There is no need to wait for UID to expand and improve positive cash transfer schemes such as pensions, scholarships and maternity entitlements. For instance, social security pensions should be increased and universalized.

5. No UID enrolment without a legal framework.

Millions of people are being enrolled for UID without any legal safeguards. The UIDAI’s draft bill has been rejected by a parliamentary standing committee. UID enrolment should be halted until a sound legal framework is in place.

 6. All UID applications should be voluntary, not compulsory.

 UID should never be a condition for anyone to access any entitlements or public services. A convenient alternative should always be available. 

7. UID should be kept out of the PDS, NREGA and other essential entitlement programmes for the time being.

 Essential services are not a suitable field of experimentation for a highly centralised and uncertain technology. Other applications (e.g. to tax evasion) should be tried first.

Explanatory Note:

Why we Oppose the Rush to Cash Transfers and UID

We support cash transfers such as old age pensions, widow pensions, maternity entitlements and scholarships. In fact, many of us have been part of struggles to expand social security pensions and improve their delivery. We also support appropriate, people-friendly uses of modern technology for this purpose.

However, we have serious reservations about the government’s rush to link these cash transfers to “Aadhaar”, the unique identity (UID) number. This is because the linking of these schemes can cause huge disruption – think of an old man who is currently getting his pension from the local post office, but will now have to run around getting his “UID-enabled” bank account activated and then may find his pension held up by fingerprints problems, connectivity issues, power failures, truant “business correspondents”, and what not.

We are also firmly opposed to the introduction of cash transfers in lieu of food and other commodities supplied through the Public Distribution System, for many reasons. One, subsidized food from the PDS is a source of food and economic security for millions of poor families. In 2009-10, implicit transfers from the PDS wiped out about one fifth of the “poverty gap” at the national level, and close to one half of it in states like Tamil Nadu and Chhattisgarh. Recent experience also shows that it is possible to further revamp and reform the PDS without delay.

Two, the banking system in rural areas is not ready to handle large volumes of small transfers. Banks are often far and overcrowded. The alleged solution, banking correspondents, is fraught with problems. Post offices could possibly be converted into useful payment agencies, but this will take time.

Three, rural markets are often poorly developed. Dismantling the PDS would disrupt the flow of food across the country and put many people at the mercy of local traders and middlemen.

Four, there are concerns of special groups such as single women, disabled persons and the elderly who cannot easily move around to withdraw their cash and buy food from distant markets.

Last but not least, inflation could easily erode the purchasing power of cash transfers. When the government refuses to index pensions or NREGA wages, how can it be trusted to index cash transfers to the price level? Even if some indexation does happen, small delays or gaps in price information could cause significant hardship for poor people.

The Kotkasim fiasco is a telling example of the potentially disruptive effects of inappropriate cash transfer schemes. The experiment was launched with much fanfare and immediately projected as a “stunning success” based on the fact that kerosene subsidy expenditure had declined by 80%, but in fact, the main reason for this decline was the collapse of the entire kerosene distribution system.

An impression has been created that the government is all set to launch UID-enabled cash transfers on a mass scale before the 2014 elections. This is very misleading, and looks like an attempt to make people rush to UID enrolment centres. This announcement also diverts attention from the government’s failure to enact a National Food Security Act. The food security bill, very weak in the first place, has been languishing with a Standing Committee for a whole year. Meanwhile, food stocks are accumulating on an unprecedented scale. The need of the hour is a comprehensive National Food Security Act, not a potentially disruptive rush for UID-driven cash transfers.

List of Signatories

  1. Sunil Abraham, Centre for Internet and Society
  2. Pushpa Achanta, Writer
  3. Bina Agarwal, Professor, Institute of Economic Growth
  4. Samantha Agarwal, Activist, Raipur
  5. Ankita Aggarwal, Researcher, New Delhi
  6. Ashutosh Agrawal, Student
  7. Anivar Aravind, Entrepreneur, Technology Manager
  8. Chirashree Das Gupta, Ambedkar University
  9. Indu Agnihotri, Director, Centre for Women’s Development Studies
  10. Sohail Akbar, Associate Professor, Jamia Milia Islamia
  11. Evangeline Anderson-Rajkumar, United Theological College Bangalore
  12. Janki Andharia, Tata Institute of Social Sciences
  13. Sadhna Arya, University of Delhi and Saheli Women’s Resource Centre
  14. K.V. Nagesh Babu, Assistant Professor, Tata Institute of Social Sciences
  15. Amiya Kumar Bagchi, Vice Chancellor, Tripura University
  16. Megha Bahl Student, Faculty of Law, University of Delhi
  17. Arindam Banerjee, Jawaharlal Nehru University
  18. Arindam Banerjee, Assistant Professor, Ambedkar University
  19. Sreshtha Banerjee, Social Activist
  20. Sanjay (Xonzoi) Barbora, Tata Institute of Social Sciences (Guwahati)
  21. Kripa Basnyat, PWESCR, Programme on Economic, Social and Cultural Rights
  22. Moushumi Basu, Associate Professor, Jawaharlal Nehru University
  23. Akansha Batra, Junior Research Fellow, Indian Statistical Institute
  24. Anjali Bhardwaj, Satark Nagrik Sangathan
  25. Bharat Bhatti, Student, Ambedkar University
  26. Kiran Bhatty, Senior Fellow, Centre for Policy Research
  27. Praful Bidwai, Journalist
  28. Ramila Bisht, Associate Professor, Jawaharlal Nehru University
  29. Arudra Burra
  30. Kathyayini Chamaraj, Journalist
  31. C.P. Chandrashekhar, Professor, Jawaharlal Nehru University
  32. Sarika Chaturvedi, Ph D scholar, Karolinska Institute, Sweden
  33. Aheli Chowdhury, JOSH, Delhi
  34. Arati Choksi, People’s Union for Civil Liberties, Bangalore
  35. Gowru Chinnapa, Bangalore
  36. Priti Darooka, PWESCR, Programme on Economic, Social and Cultural Rights
  37. Jitu Das, Alghanim Industries
  38. Asit Das
  39. Anirban Dasgupta, South Asia University
  40. Jashodhara Dasgupta, National Alliance for Maternal Health and Human Rights
  41. Saurav Datta
  42. Ashwini Deshpande, Professor, Delhi School of Economics
  43. Ritu Dewan, Mumbai University
  44. Nikhil Dey, Mazdoor Kisan Shakti Sangathan
  45. Harish Dhawan, Associate Professor in Economics, University of Delhi
  46. Arundhati Dhuru, National Alliance of People’s Movements
  47. Gabriele Dietrich, National Alliance of People’s Movements
  48. Sarah Dobinson, PWESCR Programme on Economic, Social and Cultural Rights
  49. Jean Drèze, Visiting Professor, Allahabad University
  50. Ajit Eapen
  51. Warisha Farasat, Lawyer
  52. Jayati Ghosh, Professor, Jawaharlal Nehru University
  53. Kaveri Gill, Independent researcher
  54. S. S. Gill,  Director General, CRRID, Chandigarh
  55. Paranjoy Guha Thakurta, Journalist
  56. Aashish Gupta, Research Assistant, Allahabad University
  57. Ruchi Gupta, National Campaign for People’s Right to Information
  58. Zoya Hasan, Professor, Centre for Political Studies, Jawaharlal Nehru University
  59. Neeraj Hatekar, Professor, Department of Economics, University of Mumbai
  60. Rohini Hensman, Independent scholar and author
  61. Himanshu, Assistant Professor, Jawaharlal Nehru University
  62. Danish Husain, Actor
  63. Indira C, Researcher Public Health, Delhi
  64. Kaveri Rajaraman Indira, Concern, Indian Institute of Science
  65. Jaya Iyer, Khadya Nyaya Abhiyan
  66. Devaki Jain
  67. K.P. Jayasankar, Professor, Tata Institute of Social Sciences
  68. Praveen Jha, Jawaharlal Nehru University
  69. Sadan Jha, Assistant Professor, Centre for Social Studies, Surat
  70. Ravinder Jha, Miranda House, University of Delhi
  71. Rajiv Jha, Shri Ram College of Commerce, University of Delhi
  72. Amrita Johri, Satark Nagrik Sangathan
  73. Sunny Jose, Associate Professor, Tata Institute of Social Sciences
  74. Aleesha Mary Joseph, Student, St. Stephen’s College
  75. Deep Joshi
  76. Vijay Lakshmi Joshi, People’s Union for Civil Liberties
  77. K. P. Kannan, Chairman, Lawry Baker Institute of Habitat Studies, Thiruvantanthapuram
  78. Anirban Kar, Associate Professor, Delhi School of Economics
  79. Ashok Khandelwal, Economist
  80. Madhulika Khanna, Researcher, New Delhi
  81. Sushil Khanna, Indian Institute of Management Calcutta
  82. Reetika Khera, Assistant Professor, Indian Institute of Technology, Delhi
  83. Asha Kilaru, Public Health Researcher, Bangalore
  84. Ashish Kothari, Kalpavriksh
  85. Subasri Krishnan, Filmmaker
  86. Kavita Krishnan, CPI(ML) Liberation
  87. Abhay Kumar, Karnataka
  88. Richa Kumar, Assistant Professor, Indian Institute of Technology, Delhi.
  89. Awanish Kumar, Ph.D. Scholar, Tata Institute of Social Sciences
  90. Madhuresh Kumar, National Alliance of People’s Movements
  91. A.K. Shiva Kumar, Economist
  92. Lawrence Liang, Alternative Law Forum
  93. Kamayani Bali Mahabal, Advocate
  94. Neeraj Malik, University of Delhi
  95. Anubhuti Maurya, Bharati College, University of Delhi
  96. Surajit Mazumdar
  97. Indrani Mazumdar, Centre for Women’s Development Studies
  98. Bhanwar Meghvanshi, Dalit Adivasi Aur Ghumantu Adhikar Abhiyan, Rajasthan
  99. Subhash Mendhapurkar, SUTRA, Himachal Pradesh
  100. Aggie Menezes, Associate Professor, St Xavier’s College
  101. Mira Mehta, Department of Nutrition and Food Science, University of Maryland
  102. Kalpana Mehta, Manasi Swasthya Sansthan, Indore
  103. Ritambhara Mehta, Independent Researcher
  104. Nivedita Menon, Professor, Jawaharlal Nehru University
  105. Rajkishore Mishra, Orissa
  106. Srijith Mishra, Associate Professor, Indira Gandhi Institute of Development Research
  107. Gautam Mody, Secretary, New Trade Union Initiative
  108. Mritiunjoy Mohanty, Professor, Indian Institute of Management, Calcutta
  109. Sanat Mohanty, Associate Professor, Indian Institute of Technology, Delhi
  110. Anjali Monteiro, Professor, Tata Institute of Social Sciences
  111. Vipul Mudgal, Inclusive Media for Change, Centre for the Study of Developing Societies
  112. Prakriti Mukerjee, Yoda Press
  113. Poonam Muttreja, Population Foundation of India
  114. Tithi Nandy, Healthwatch Forum Uttar Pradesh
  115. R. Nagaraj, Professor, Indira Gandhi Institute of Development Research
  116. Farah Naqvi, Writer and Activist
  117. Sudha Narayanan, Assistant Professor, Indira Gandhi Institute of Development Research
  118. Rajendran Narayanan, Visiting Scientist, Indian Statistical Institute
  119. Arvind Narrain, Alternative Law Forum
  120. Saboohi Nasim, Assistant Professor, Aligarh Muslim University
  121. Balaji Narsimhan
  122. Nandini Nayak, School of African and Oriental Studies, University of London
  123. P. Niranjana, Assistant Professor, Tata Institute of Social Sciences
  124. V.P. Niranjanaradhya, National Law School of India University
  125. Claire Noronha, Collaborative Research and Dissemination
  126. Madhurima Nundy, Institute of Chinese Studies
  127. Gangaram Paikra, Right to Food Campaign, Chhattisgarh
  128. Parthapratim Pal, Associate Professor, Indian Institute of Management Calcutta
  129. Sandeep Pandey, National Alliance of People’s Movements
  130. Soma Kishore Parthasarathy, PhD scholar, Indian Institute of Technology Bombay
  131. Medha Patkar, National Alliance of People’s Movements
  132. Prabhat Patnaik, Retired Professor, Jawaharlal Nehru University
  133. Utsa Patnaik, Retired Professor, Jawaharlal Nehru University
  134. Boban V. Paul, NGO professional
  135. Pamela Philipose, Director, Women’s Features Services
  136. Neetha Pillai, Senior Fellow, Centre for Women’s Development Studies
  137. Dr Prabir, Independent Consultant, West Bengal
  138. Pranesh Prakash, Law and Policy Researcher
  139. Mythri Prasad, Researcher, French Institute of Pondicherry
  140. T. V. H. Prathamesh, Research Scholar, Indian Institute of Science, Bangalore
  141. Raghav Puri, Independent Researcher
  142. Pushpendra, Director, Centre for Social Studies, Surat
  143. Kalyani Raghunathan, Ph.D. Scholar, Cornell University
  144. Annie Raja, National Federation of Indian Women
  145. Jawahar Raja, Advocate, Delhi
  146. Suvrat Raju, Reader, International Centre for Theoretical Sciences, Mumbai
  147. R. Ramakumar, Associate Professor, Tata Institute of Social Sciences, Mumbai
  148. Kannama Raman, Associate Professor, University of Mumbai
  149. Usha Ramanathan, Legal Researcher
  150. Ashish Ranjan, Birla Institute of Technology, Patna
  151. Bharat Rastogi, Graduate student, University of California Santa Barbara
  152. Savitri Ray, FORCES Network, Centre for Women’s Development Studies
  153. Mohan Rao, Professor, Jawaharlal Nehru University
  154. E. Rati Rao, People’s Union for Civil Liberties Karnataka
  155. Vidya Rao, Jain Vishva Bharati Institute, Rajasthan
  156. D. Narsimha Reddy, Chair Professor, NIRD, Hyderabad
  157. Rammanohar Reddy, Editor, Economic and Political Weekly
  158. Dr. K. Srinath Reddy
  159. Ira Regmi, Student, Lady Shri Ram College for Women
  160. Rohit, Assistant Professor, South Asia University
  161. Aruna Roy, Mazdoor Kisan Shakti Sangathan
  162. Saheli Women’s Resource Centre Sahyogi, Patna
  163. Preeti Sampat, Independent Researcher
  164. Meera Samson, Collaborative Research and Dissemination
  165. Sunil D. Santha, Assistant Professor, Tata Institute of Social Sciences
  166. Radha Kant Saxena, People’s Union for Civil Liberties
  167. Sukla Sen, EKTA (Committee for Communal Amity), Mumbai
  168. S. Seshan
  169. Sudeshna Sengupta, Mobile Crèches
  170. Mitu Sengupta, Centre for Human Development and Human Rights, New Delhi
  171. Prem Krishan Sharma, President, People’s Union for Civil Liberties, Rajasthan
  172. Saurabh Sharma, JOSH, Delhi
  173. Veena Shatrugna, Former Deputy Director, National Institute of Nutrition
  174. Jeevika Shiv
  175. Dr. Mira Shiva, Initiative for Health & Equity in Society
  176. Rama Shyam, Tata Institute of Social Sciences
  177. Aditya Shrivastava, Advocate
  178. Shankar Singh, Mazdoor Kisan Shakti Sangathan
  179. Bhanwar Singh, Astha
  180. Mahipal Singh, National Secretary, People’s Union for Civil Liberties
  181. Paramjeet Singh, People’s Union for Democratic Rights
  182. Surjit Singh, Director, Institute of Development Studies, Jaipur
  183. Dipa Sinha, Ph.D. Scholar, Jawaharlal Nehru University
  184. Shantha Sinha, National Commission for the Protection of Child Rights
  185. Ahmed Sohaib, Jamia Teachers’ Solidarity Association
  186. Gautam Sonti
  187. Vivek Srinivasan, Stanford University
  188. Nisha Srivastava, University of Allahabad
  189. Ravi Srivastava, Professor, Jawaharlal Nehru University
  190. Shambhavi Srivastava, Graduate student, University of British Columbia
  191. Kavita Srivastava, National Secretary, People’s Union for Civil Liberties
  192. Sulakshana, Right to Food Campaign, Chhattisgarh
  193. Nandini Sundar, University of Delhi
  194. Mayur Suresh, Ph.D. Scholar, University of London
  195. V. Suresh, General Secretary, People’s Union for Civil Liberties
  196. Kamayani Swami, Jan Jagran Shakti Sangathan
  197. Padmini Swaminathan, Tata Institute of Social Sciences, Hyderabad
  198. M.S. Swaminathan, Member of Parliament, Rajya Sabha
  199. Sharmila Tagore
  200. Krishan Takhar, People’s Union for Civil Liberties
  201. Vamsi Vakulabharanam, Reader, University of Hyderabad
  202. Padma Velaskar, Professor, Tata Institute of Social Sciences
  203. G. Vijay, Assistant Professor, School of Economics, University of Hyderabad
  204. M. Vijayabaskar, Madras Institute of Development Studies, Chennai
  205. Vimochana, Forum for Women’s Rights
  206. Achin Vanaik, Retired Professor, University of Delhi
  207. Sujata Visaria, Hong Kong University of Science & Technology
  208. Bezwada Wilson, Safai Karamchari Andolan
13 Comments leave one →
  1. Gaussian permalink
    December 27, 2012 11:34 AM

    Cash transfers with out UID linkage would result in ‘universal’ cash transfers – to the random, indiscriminate, and mighty. No wonder all the current day PDS lovers love such indiscriminate cash transfers. In your world, the idea of a welfare state is non-existent when coupled with technology and it’s ‘capitalist’ siblings. You would want us to believe that technology is a mirage and can never match up to state’s elegant, ‘under-control’, top-down bureaucratic apparatus. I bet you guys had foretold a decade ago that mobile phones would never in life-time reach the rural populace. Nevertheless, you would still want to foretell and forecast the dooms day scenarios! The truth in reality is about a fear – an imagination/paranoia, that one day, technology will grow to the level that individual privacy will stand threadbare under the eyes of an all too powerful government. I wish all you believers can migrate to a pacific island and lead a government-free private life and leave us alone!

  2. Rahul S permalink
    December 27, 2012 11:47 AM

    Are you really opposed to cash transfers as an alternative to PDS? Or you are opposed to limited structures that are in place to implement this system? You see, these two are two different things. I understand when you say that banks are far, enrollment in banks are not done, it should not be done for elections etc etc but, you can not be really against the system of cash transfers.

    Do you know what percentage PDS which according to you “is a vital source of economic security and nutrition support for millions of people” actually reaches millions of people? Do you know the number of people who are “BPL card holders” but are actually not BPL in the present system? The initial logic of linking UID with PDS was that the subsidy would reach to the people who really wants it rather than fake ones.

    Apart from that there is a huge problem in managing PDS. A lot of food grains is wasted. At many places you get such pathetic quality of food grain that I am sure none of us would want to eat them. But people eat them because they do not have any alternative. This is what they get. Providing people with cash is like enabling them with an alternative to choose how they want to spend that money as a family. Apart from that based on my experience with PDS system, I have seen that people are ok if they do not get their specified quota every month. They are ok with getting less grains because they think “aisa hi hota hai”. Millions of rupees are lost in side selling of grains which is meant for PDS.

    A healthy criticism always comes with a an alternative solution. Your post is missing one.

  3. Somnath permalink
    December 27, 2012 1:26 PM

    It is ironic that the same people who had opposed computerization of banks on grounds of “unemployment” are so pathologically opposed to new ideas. Or maybe not so ironic after all. The left liberalati has not grown beyond the 1930s smokestacks in terms of it’s appreciation of technology.

    So banking computerization was evil. A few years later private mobile phones were evil too.

    Now UID. The gratuitous suggestion on using it for tax evasion purposes simply shows an extraordinary lack of awareness. The Tax Information Network is at least a decade old in it’s architecture, and has contributed in no mean measure to the expansion of the direct axes to GDP ratio in the last 10 years.

    The infrastructure being visualized for GST is a lot more complex.

    The biggest bugbear to UID seems to e that “it has not been done anywhere else in the world”. One assumes that would mean that such glorious instances of social democracies as Cuba and Venezuela haven’t managed. Well, they would have, perhaps, if they had the world’s largest technology workforce after te US. If corporations like GE were developing their next gen engines and materials in centres in Havana. Indeed, if they were countries that regularly managed to send spacecrafts up in the space, eight upto the moon.

    The lack of cOnfidence in our abilities is so stark in the narrrative that it’s amazing.

    Reform the PDS? Sure, paraphrasing Rajni Kothari, let’s cOndemn ourselves to repeat the same mistakes that we had for 65 years. Instead of trying new things and at least commit new mistakes.

    The argument also displays a strange paternalism towards the poor, strange coming from a progressive lot. The argument seems to be, the poor can’t handle cash to the best of their interest (food and nutrition). Hence state subsidy should restrict itself to the goods, even giffen goods, that we think are apprpopriate for them. Misses the essential point of dignity that cash bestows , compared to am entitlement shop like the ration shop which not gives te intermediary a sense of social superiority.

    Is UID perfect? It isn’t. But it’s good enough to try out. After all we persisted with a broken system for 65 years!

  4. December 27, 2012 4:42 PM

    Anyone demanding projects which require tremendous amounts of money (Food security, increasing of PDS, etc.) should also suggest ways of getting that money. What expenditures do you demand to be cut to meet these requirements? Do you want to raise more taxes as well? By how much?

  5. ShankarG permalink
    December 27, 2012 8:32 PM

    All three of the pro cash transfer commenters here – SIddharth Gore, Rahul S and Gaussian – appear to have missed the point. As the signatories have explained, the PDS in particular and public provision in general is vital to ensuring that people actually have access to food / health care / etc. If you are in rural INdia and there are only a few grain retailers who are accessible to you, if PDS is shut down, what is to prevent those traders from massively hiking the price? The reality is that cash transfers are no solution at all to the problems that the PDS and government health care is meant to address, in which subsidies are a secondary goal and the main point is to ensure that all people have access to basic facilities. Amartya Sen and Jean Dreze’s famous work in the late 1980s demonstrated how the PDS’ effect in stabilising prices was a key reason that independent India has avoided famine. Recently this has been greatly weakened by the nonsensical idea of “targeting” the PDS – and prices have remained more stable in States, like Tamil Nadu, that have reverted to a universal PDS with no APL / BPL distinction. Rahul S, plenty of alternatives exist, and the PDS has been made far more effective in States like Chhattisgarh and Tamil Nadu. The signatories cannot be blamed for your ignorance. As for the tax revenue problem, Siddharth Gore, whether the money is provided through cash transfers or PDS the problem remains. ANd the reality is that enormous subsidies are being provided to small but powerful interests such as the mining sector, the thermal power sector, SEZs, etc. that can easily be stopped and the resulting revenue can be funneled into these expenses. Jean Dreze once demonstrated how removing subsidies to the jewelry industry would cover a substantial part of the costs of the food security bill. This is the reality and has been expressed many times in public.

    • Gaussian permalink
      December 28, 2012 8:47 AM

      If fertilizer shops, liquor outlets, micro finance, and mobile phones could penetrate deep into most rural pockets, why do you think rural entrepreneurs cannot suck in the disposable incomes arising out of cash transfers by selling food grains, sugar, oil and other groceries? If there are certain impediments that you can imagine preventing market access, why not address those issues?

    • Rahul S permalink
      December 29, 2012 12:17 AM

      @ShankarG – I will comment on few things that you have mentioned .

      “…If you are in rural INdia and there are only a few grain retailers who are accessible to you”

      -Your observation is far from reality and of course far from economics. Few grain retailers can not increase their price abruptly for only those people who will be getting money from cash transfers. There are many other families purchasing grains from them who will not get money from the government. Moreover, in most of the villages people go to nearby market weekly to get most of their daily use items and therefore competition from these markets will take care of your concern.

      “…PDS has been made far more effective in States like Chhattisgarh and Tamil Nadu. The signatories cannot be blamed for your ignorance”

      First of all, I think it is a rude comment. But let’s move to your point here. I have no idea about Tamilnadu but I have worked for two years in Chattisgarh recently with a local NGO supporting women SHGs. The state govt was promoting SHGs to take up the rations centers in villages and I tell you from my own experience working with them that it is far from being effective. If effectiveness according to you is getting at least 15kgs of rice from an allotted quota of 25kgs, then you may call it effective.

      “ANd the reality is that enormous subsidies are being provided to small but powerful interests”

      Ok. But isn’t it that how do you handle the leakage is the main issue? We spend sufficient amount of money on PDS and we can save plenty if we are able to plug the leakage.

  6. December 28, 2012 4:24 PM

    Asking ‘where will the money come from’ does not make me an enemy of PDS. On the contrary i fully understand the danger of suddenly dismantling the PDS. But it is also true that it is riddled with problems. My point is, instead of us (who most likely never go to ration shops) arguing over which one is better, why don’t we give the people that option? Those who want to continue with PDS can do so, whose who want to switch to Cash Transfers can do so too. Isn’t that a good compromise solution?

  7. Somnath permalink
    December 28, 2012 7:49 PM

    There is actually no reason to “dismantle” anything at all. The PDS infrastructure can remain as a distribution effort of the state, where essential commodities are sold at a price that covers the cost of procuring and distributing them. These outlets can and will be competition to the private retailer.

    The cash subsidy then enables the consumer to choose between various consumer goods.

  8. December 29, 2012 1:57 AM

    A two-part response:


    “….we oppose the government’s plan for accelerated mass conversion of welfare schemes to UID-driven cash transfers….” So, is the petition opposing cash transfers in welfare schemes, or their accelerated mass conversion or the UID itself? [The explanatory note suggests it could be a combination of the last two.]

    I agree with points 1 and 2. I don’t understand the relevance of point 3. Points 4, and especially 5, I agree with.

    Isn’t point 6 self-contradictory? If you accept UID – which that point seems to be doing for argument’s sake – then won’t having an alternative defeat the purpose? It’s like saying a passport will do instead of a Voters’ Identity Card inside a polling booth. Which has incidentally happened, and which defeats the purpose of the VID. But that is a debate for later.

    Point 7 could have been avoided. The list of 34 schemes being tried out in the 43-district pilot does not include the PDS and NREGA. The development blocks where PDS and NREGA-related pilots have been on will continue to test their efficacy. “Essential services,” mentioned in the same point, need to be clarified. The Janani Suraksha Yojana, after all, is essential for some.

    Of course, the fact that schemes covering a large number of people are not being tested is an indication that all is not to plan. There are huge disparities between enrolment [registration], generation [receiving a Unique Identification Number] and the mapping of the Aadhaar to specific schemes despite at least six months of concerted efforts. The pilot in Ranchi, for instance, will cover only about 70,000 of its 29.1 lakh population. There is a significant rural-urban divide in enrolment, too.


    I have a huge problem with a statement like: “….think of an old man who is currently getting his pension from the local post office, but will now have to run around getting his “UID-enabled” bank account activated and then may find his pension held up by fingerprints problems, connectivity issues, power failures, truant “business correspondents”, and what not…”

    That is what I would like to describe as a post-apocalyptic scenario; something the writers of The Walking Dead would be proud of. This is not to say that these problems don’t exist: they do. But this all-that-can-go-wrong-will-go-wrong combination is rare. A little leg-work could have helped cite instances where such problems have spiked. It may not look as shocking, but one would not be hard-pressed to identify different people, with bank account-activation problems, panchayat bhavans with connectivity issues and fingerprint identification issues. Moreover, statistics help put such scenarios into perspective.

    For example, micro-ATM seems to be struggling to identify the fingerprints of older people who still engage in manual labour. The agencies which were involved in the first round of enrolments seem to have done a shoddy job: biometric markers have not been recorded, Aadhaar-linked bank accounts have not been opened in too many cases.

    I think the part about power failures and truant business correspondents [along with the claim that the idea is “is fraught with problems”] could do with a little explanation. The micro-ATM is battery-operated and does not need an external power source. It would be naïve of me to even suggest that the BC model is flawless, but it is a huge improvement upon earlier ones. Though not often, there is anecdotal evidence to suggest that some BC’s have even gone to NREGA worksites of Ranchi’s Ratu Block, where a pilot is on.

    And “what not,” as always, is one of the greatest mysteries of the English language.

    Nitty-gritties apart, I am in complete agreement with the opposition to expand cash transfers to the Public Distribution System. Everything points to a disaster. Famine, to be precise. When that happens the next time, let’s not blame hungrier Indian and Chinese stomachs first.

  9. Reetika permalink
    January 1, 2013 4:10 PM

    Glad that the statement has generated some debate. “Brief” response below –

    On use of technology: Those who claim that the signatories are anti-technology have perhaps not read the statement carefully enough. Not speaking for all the signatories, but many of us have supported and promoted technological innovations for welfare schemes such as computerization of records, SMS alerts, and wider reach of the formal banking system. (Some signatories support local biometrics.)

    Performance of the PDS: It is funny to be lectured, by one commentator, about the performance of the PDS since so much of my work (and a few other signatories) has been to document the corruption in the PDS/NREGA without being blind to the fact that these programmes are also a huge support to millions of people across the country. The links below, will answer some of your questions on the PDS and help you support your arguments with a few facts.

    On costs: Newsreports claim that the government hopes to transfers Rs. 3 lakh crores through “cash transfers”. The estimated cost of the PDS/food security act is just over Rs. 1 lakh crores. (This does not include everything that the government is labelling “direct benefit transfers”, but a substantial part of it.) Someone has already alluded to “tax revenues foregone” – the statement of revenue foregone, presented as part of the budget (, will give you a sense of the fiscal space that is available to accomodate these demands. In 2011-12, tax revenue foregone (from all sources) was more than Rs. 5 lakh crores.

    Many poor have very fragile lives, which perhaps it is not easy for us to appreciate fully; the pensions, NREGA wages and PDS grain are a lifeline to such people. Its like me being told that I can get my salary next month only if I have a UID number – not sure how many of us would appreciate this sort of top-down approach. (Quite interesting that one commentator thinks of UID as being different from the current “top-down bureaucratic apparatus”.)

    Performance of the PDS:
    Poverty impact of the PDS:
    PDS reforms, including use of technology:

    People’s views on cash vs PDS: Letter to the PM,

    A study in Bihar, different question different results:

    What UID can and cannot do for corruption:
    Not all that unique, HT:
    Full article:

    Unique facility, or..:

    Lack of preparedness (other similar reports are also available online):

    Apologies for posting links primarily to my own work, but that’s the easiest to pull out!

  10. Ravi Shyam permalink
    August 26, 2013 12:10 AM

    By default, all poor people have been excluded from financial services. Now Aadhaar-enabled services can take them to financial inclusion. Afterall poor are the lower 80% of the pyramid.

    I see comments that opposes Aadhaar in Dec-2012. However, you see now in August-2013 that 460 Million have Enrolled and 410 Million have been issued the Aadhaar Number.

    Take a look at the Aadhaar portal : and compare with state pupulation. We notice that Goa, Delhi, Himachal, Sikkim, Tripura, Kerala, Pondicherry, Chandigarh, Andhra, Lakshdweep etc are in 90-99% enrollment category.

    More than 80% enrollment across India – North, Soth, East, West, North-East shows that Aadhhar is welcome by the majority. The rush at the enrollment centers show the same.

    The DBT provides access with options to poor lot which had been denied so far. A ground reality question to the opposing people – How many of you have / had Ration card and taken ration from PDS? Perhaps a good number. How many of you have eaten PDS ration? Perhaps none! That is the difference between theory & practical, rich & poor.

    I do not see any signature as mentioned in the beginning of the article. How to verify your signature, even if you had one? We could verify if you had affixed your Aadhaar Number authenticated by bio-metric. A paradox!

    Given the above facts & figures, the majority of India should not bother about hue & cry of 208 people opposing Aadhaar.


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