As a part of a project that I am working on, I visited Anita’s home the other day. Anita lives in a slum in Worli (Mumbai) with her parents and two siblings in a room about 40-50 sq ft. This is their world, the world of five adults and possibly a cat that kept a close watch on me and Tina as we spoke to Anita and her sister.
Gross family earnings will ensure that they are not classified as poor. While the city of Mumbai provides enough sources of livelihood, it doesn’t provide dignified living conditions to its denizens.
Two years back the family secured a LPG connection and we could see the two LPG cylinders in the house. They stood out in their bright red colour. The advent of the cooking gas has made life easier for the mother, saved her precious time and the small room gets less heated, a boon during the sultry summer months in Mumbai. Think productivity.
Our questions at one point of time turned to the PDS (public distribution system) and Aadhaar (UID). The family members have all got their Aadhaar numbers although they do not have any idea how it will be useful for them.
From the PDS shop, they only get pulses and kerosene these days. Rice and sugar, which was earlier available, has to be now bought from the open market for reasons not known to the sisters. Over the years the kerosene quota has got reduced.
I asked them that what do they now do with their kerosene quota since they have cooking gas at home. I was not too surprised on being told that they draw their full quota of kerosene even now.
And what do they do with it? They sell it to the local grocery store in their slum and make a tidy little profit. As I sat their thinking of illegal sale and profiteering, Anita told us that the money they get is saved to buy LPG cylinders! The ways of the poor and our erroneous assumptions. And the difficult question of morality behind subsidies.
So this family now enjoys a subsidy on their kerosene quota as well as subsidised LPG cylinders – a case of double subsidy. And they do not know that Aadhaar can put a stop to that.
The incentive to sell kerosene to the shop in their locality will still be there since the family will get its subsidy in their bank account, but Aadhaar will identify them as using cooking gas and make them ineligible to buy kerosene from the PDS shop. This is not about ghost card holders, ghost recipients, but about double subsidy.
I wonder what they would have done if they knew what the Aadhaar number could mean for them. May be someone will have to tell them of the other side – the scholarships the sisters could have got, the old age pension that their parents may become eligible for and the other benefits that will actually reach them if Direct Benefits Transfer (DBT) works properly. Plus the benefits to the country as the subsidy bill reduces.
A recent report by IIFL Institutional Equities, Savings on delivery, estimates that “on full implementation, it (UID) can reduce fiscal deficit by 2 ppt of GDP.” Under Nandan Nilekani, UID has made tremendous progress and is probably the only success of UPA-II. The risk is that in a rush to discover the next winning electoral slogan (Aapka paisa Aapke haath), the Congress leadership may have prematurely rushed into DBT without adequate groundwork or penetration of UID. Hopefully this will not derail UIDAIs efforts.