Rajiv was right: Montek says only 16p of Re reaches poor

Times of India, Oct 14, 2009

NEW DELHI: Twenty-five years after Rajiv Gandhi said that for every rupee sent to the common man, only 17 paise reached him, the debate is back on
what constitutes a huge indictment of the delivery system in welfare schemes.

Prime Minister Manmohan Singh told reporters in Mumbai on Sunday that leakage of funds was not as big as mentioned by Rajiv Gandhi. “Leakage of funds earmarked for development does exist but I don’t admit these leakages are as big as was mentioned by Rajivji,” he said. By coincidence, a day later, Planning Commission deputy chairman Montek Singh Ahluwalia told a seminar that the former PM was correct about the extent of leakage. He said a Plan panel study on PDS recently found that only 16 paise out of a rupee was reaching the targeted poor, as he went on to suggest that 1% of every scheme money be earmarked for monitoring and evaluation.

While their opinion on the magnitude of pilferage may differ, the top policy duo has cranked open a debate at the core of the campaign for ‘aam aadmi’. When Rajiv Gandhi spoke during a visit to Kalahandi in 1985, it was an indictment of the system in the pre-reforms era which triggered a controversy.

Many years later, while the debate seems as valid, Congress leaders say the concern has been heightened by heavy inflow of funds in welfare schemes like NREGA, Sarv Shiksha Abhiyan and the proposed food security Act. A leader said the need to address the leakages is serious for fighting poverty as much as it is to tackle naxalism. The naxalites have used the lack of development to wean away weaker sections towards rebellion.

The efforts to address the situation have started. While RTI and ‘‘social audits’’ in welfare schemes are expected to help plug the leaks, Centre is thinking of using the proposed UID numbers and bio-metrics identification to cut the fraud in targeted schemes. That the debate is once again coming from the Congress stable is significant. It was Rahul Gandhi, during a rally in Jhansi, who recalled his father’s statement, only to add that the situation had worsened since.

Politically, while such loud thinking could raise questions about Congress’s success in reforming the delivery system, the party feels it can win over the poor through honest admissions, especially if they are followed by serious attempts at reforming the system.