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Resource centre on India's rural distress
 
 

Loud no to cash by Raghav Puri

In Chhattisgarh, people swear by the PDS, which has witnessed a revival since 2004 when the government revamped it.

IN Chhattisgarh, as part of the survey on public distribution system (PDS) versus cash transfers, a team of student volunteers visited 12 villages spread across Mahasamund and Sarguja districts. The State may have been in the news for all the wrong reasons in recent times, but the way its PDS worked came as a big surprise.

A large number of the respondents strongly opposed any move to introduce cash transfers. This was understandable, considering that 96 per cent of the 144 households that were interviewed got their full entitlement of 35 kg of foodgrain at Rs.2 a kg every month from the ration shop.

The PDS in the State has witnessed a revival since 2004 when the government took radical steps to revamp it. First among these was the shifting of the management of ration shops from private dealers to cooperative societies, gram panchayats and women's self-help groups (SHGs). This not only helped plug leakages but also led to greater accountability and transparency.

Second, to address the problem of ‘fake ration cards' the government computerised all ration card records and followed this up with verification drives at the gram panchayat level. All households that were surveyed had ration cards with an imprint of the most recent verification conducted last year. Chhattisgarh also has a functioning PDS helpline number where complaints can be lodged.

Finally, the Mukhyamantri Khadya Sahayata Yojna (MKSY, the Chief Minister's Food Assistance Scheme) provided ration cards to poor households that were excluded from the PDS because they were not on the BPL list. While 1.3 million households were already getting subsidised rations from the PDS, the MKSY added another two million households at the State's expense. This has helped attain a near-universal PDS; in rural areas, as much as 80 per cent of the population now have ration cards. More than half of the households that were interviewed were getting rations under the MKSY.

For the majority of PDS users, cash transfer was not a viable alternative; 93 per cent of the respondents preferred food rations from the local PDS shop to cash transfers to their bank or post-office accounts. There were many reasons for this: remoteness of markets, risk of misuse of money, and, most importantly, food security. “If we get cash we will spend one day at the bank and one day at the market. When are we going to work?” said Chatru of Damodara panchayat in Mahasamund district. His concerns are valid considering that the bank and the closest market selling rice throughout the year are both located at the block headquarters 18 km from his village.

Many respondents, particularly women, expressed their concern over the possible misuse of money. With alcoholism being a major problem in these areas, many women were afraid of losing control over the household budget. According to Nyali Koshy from Badetemri panchayat in Mahasamund, “ If we get cash then all decisions will be made by the men and we cannot keep an eye on them the entire day. If our men withdraw the cash and spend it, what will we do?”

Interestingly, even men were worried that cash would be spent on non-food items. Many of them said they did NREGA work for a day or borrowed from neighbours to make Rs.70 for the monthly rice quota of 35 kg. With cash transfers, they feared, this would change as their spending on food (at much higher prices) would be decided on a day-to-day basis after taking other expenses into account.

Finally, food security itself was the prime concern of most households. Mirabai of Aarangi panchayat in Pithora block aptly summed it up: “ Will I eat the money? Who will ensure that I can find rice in the market?” Nidra from Damodara panchayat said: “Currently the government takes the trouble of ensuring that rice is available in the village but if we get cash then we will have to go looking around for rice. For us, the ration shop is better.”

As paddy cultivation is seasonal, the supply of rice in the local markets is erratic. This leads to times when rice is not available and prices shoot up. The PDS, however, ensures a regular supply of rice at subsidised rates to these families and also saves them a trip to the market, which often takes up an entire day.

In the remote panchayats of Chipparkaya and Teerang in Sarguja district, the Pahari Korba, a hill tribe, make a monthly trek to their ration shop located nearly 6 km away, in the plains. According to them, the uphill trek with 35 kg of foodgrains on their backs is better than making a trip to the bank and then a longer trek from the market to their village. The sarpanch of Chipparkaya told us that soon an extension counter of the ration shop would be constructed in the Pahari Korba settlement, making it easier for them to purchase foodgrains, particularly in the dry season.

For an improved PDS

Many of the respondents would rather see the government further improve the PDS than give them cash. Other than making the ration shops more accessible by opening extension counters in remote villages, the provision of subsidised dal (lentil) and cooking oil was high on their wish list. Large households complained that entitlements should be adjusted to the household size as 35 kg of foodgrains a month was just not enough for them. Others wanted the wheat component of the PDS quota to be replaced with rice, as often they had to sell the wheat to buy the staple cereal, rice. It is hoped that these issues will be addressed in future discussions of the National Food Security Bill, to be tabled soon in Parliament.

As a student of public policy, I remember studying the success stories of cash transfers in South America – a favourite among proponents of cash transfers in India – and wondering why India was not promoting this model. However, this visit to Chhattisgarh was a much-needed reminder that “context matters”. While cash transfers may be a possible alternative to the PDS in areas where markets and banking services are functional and easily accessible, the large majority of India's poor live in villages like those in Chhattisgarh. Cash transfers in these areas will not only make it more difficult for the rural poor to get foodgrains but also threaten food security.

An image that will remain with us is that of Nankiben, a 64-year-old widow from Binkara panchayat in Sarguja. She followed us up to the end of the village asking us to promise that we would not replace the PDS with cash transfers.