The cash transfer of subsidies may well be a game-changer for both politics and governance, but its hurried implementation could have the effect of throwing the baby out with the bathwater. Such a scenario was witnessed during the implementation of a pilot project aimed at transferring kerosene subsidies directly to the bank accounts of beneficiaries in Kotkasim block.
Launched in December 2011, beneficiaries were asked to buy kerosene at market rates. The subsidy component was to be credited to their bank accounts. Everyone was given three months' subsidy of Rs. 263 in advance. Most people received their second and third instalments in February and May 2011, but funds started drying up after that.
"The scheme is fine, provided that payments are timely. I have stopped buying now," said Rotan Singh from Pur village. Only 210 litres of kerosene, against entitlements of 1,350, were sold at Pur's fair price shop in November.
District collector Ashutosh Pednekar said the delay in payment over the last six months has been due to uncertainty over the project's continuation. "Payments will be made soon," he said.
Also, the project design is inherently weak. Data regarding purchases reaches the district supply office, where a person effects transfer of money to individual accounts. The project is not linked to Aadhaar, which would have made the purchase of kerosene, transfer of money and its withdrawal from the account, all into a seamless, automatic process.
The dramatic drop in kerosene sales — from 84,000 litres in November 2011 to just over 5,000 litres in October 2012 — is mainly due to stoppage of leaks. "As much as 80% of the kerosene sold here was being routed to diesel water pumps," said Lakshman Singh, an attendant at the fair price shop in Pur. "That has now stopped."
However, many former beneficiaries — who are lacking in desperation, awareness or willingness — have now started excluding themselves from the scheme. "Since we are dealing with kerosene here, it is fine. But such a scenario in the case of food would have a dangerous outcome," said Zuber Khan, a former MLA. Savatri Singh is a case in point. Though she does want kerosene, she faces problems with opening a bank account.
When asked about the awareness camps organised by banks in her village, the retort was a simple “I did not know”.
Meanwhile, the woman continues to live without kerosene — which is possible in Kotkasim. And that is exactly the reason why her village was a bad place to launch the pilot project on kerosene, in the first place.
Kotakasim is a relatively well-off place where there is not even enough demand for the rural employment guarantee scheme. Surrounded by industrial belts, jobs are easy to come by. The population predominantly comprises Jats and Yadavs, and Dalits are few in number. Agriculture wages can rise as high as Rs. 250 a day.
Agriculture is profitable here, the land is fertile and water tables are healthy. Electricity supply is relatively regular, and cooking gas is used in most households. Cotton and mustard plants are used for lighting traditional choolas. "Hardly anybody uses a kerosene stove in these areas," says Shafia Khan, pramukh, Alwar district panchayat.
The leakage has been checked, but by virtually cutting kerosene supply. So, the pilot project has proved that the people of Kotkasim can live without kerosene, not that the idea of cash transfer is effective or desirable.