While Congress vice-president Rahul Gandhis announcement of removing fruits and vegetables from the APMC Act made good sense since it enables cutting down the number of intermediaries between farmers and consumersthough creating supply chains will take some timethe same cannot be said about some of the other points made by him at last weeks press conference. Gandhi repeated the old statements about going after hoarders but omitted to talk of the biggest hoarder of them allthe Food Corporation of India (FCI) has around two-and-a-half times the grain it needs and, if it so chooses, can completely finish off cereals inflation by dumping stock in the market.
What was even more perplexing was Gandhis statements about reviving the PDS shops and modernising them. In theory thats a good idea, but given the effort put in by the government on creating the Aadhaar platform and then connecting it with bank accounts, wasnt the idea to, over a period of time, move to direct cash transfers? If it was, then surely the decision to modernise the PDS network is a colossal waste of time and money. More so since, based on the data so far, around 40% of the output put through the system does not reach the targeted groups of people.
But, it will be argued, we are a long way from perfecting Aadhaar and, till such time, the poor cannot be allowed to go hungry and the PDS is the only way to ensure this. Seductive as that logic may be, it is simply not true. Where the government has used Aadhaar to transfer fundsbetween June and now, 1.84 crore customers in 184 districts have been given R1,700 crore of LPG subsidy transfers. Thats enough proof of concept, and suggests that if Aadhaar is not being used in other schemes, it is because the government is not in a terrible hurry to plug the huge leakages in the R3 lakh crore or thereabouts that India spends each year by way of social security expenditure. That is unfortunate.