Jharkhand govt’s bank transfer pilot for food subsidies turns a nightmare

Aychi Nagduwar is 85 years old and she lives with her 40-year-old mentally-challenged son in Singhpur near Ranchi. The food subsidy supposed to be credited by the Jharkhand government under the Direct Benefit Transfer (DBT) scheme has not reached her ever since it began in October.

Somari Mundain near Ranchi lives with her young grandson and he used to get the grains from the dealer, but now he is unable to work his way around the bank. She has travelled multiple times and each time she was told that her DBT money hasn’t been credited. In fact, her DBT money hasn’t been credited since October and she uses her widow pension to buy ration.

Octogenarian Fulit Kachhap is physically challenged and in order to help her, her daughter had filled in her own account for the DBT transfers, but the money was transferred to Fulit’s account. Now, the daughter has to book an auto, spend ₹300 to take Fulit to the bank to authenticate her biometric identification, then she has to get her mother back home. Once she does that, she goes back to the bank, waits in the queue for a few hours to be able to withdraw the DBT payment. There are no separate queues for the old and handicapped in these banks.

Dulari Kachhap is a tribal girl, whose father had died months before the DBT launch in their village. The account to which the DBT payment is transferred belongs to the deceased father. No one else can withdraw from the account. They have attempted to solve the issue multiple times, but it hasn’t been solved yet. Her family hasn’t been buying PDS ration for the last five months.

And these are not just a few isolated cases. This is the norm in Nagri block where the BJP-led Jharkhand government had launched the pilot Direct Benefit Transfer scheme in which BPL beneficiaries would get the amount in their account for purchase of foodgrains from the Public Distribution System (PDS) dealers is a dismal failure and around 25% of the cardholders did not receive the subsidy. And this is in a state where, according to the National Family Health Survey, 47.8% of the children under the age of five are underweight and 65% of the women under the age of 49 are anaemic.

A recent survey by the Right to Food campaign at Nagri points towards the abject difficulties of those trying to avail the government subsidy. It was found that that 97% of the sample households opposed the DBT pilot. “Their anger with the DBT system is because in January 2018 about 25% of cardholders did not receive the cash. Even those who get money face many hurdles. Many households do not know which of their bank accounts is being credited with DBT money (the sample households had 3.5 bank accounts on average). They have to often make multiple trips to the bank to find out if the money has come, as most of them do not receive SMS alerts. Some banks even disallow cardholders from withdrawing money (claiming that the amounts are too small), forcing them to make further trips to the local Pragya Kendra or banking correspondents, where they often have to pay bribes. The entire process leads to a huge waste of time and money for the cardholders. It is especially cumbersome for the elderly, the disabled, and those who find it difficult to take time off work,” states the survey.

The Jharkhand Chief Minister Raghubar Das had launched the pilot scheme at Ranchi’s Nagri block despite opposition from various social groups. Instead of simply buying rice at ₹1 per kg at the ration shop, the PDS cardholders will receive the subsidy (calculated at ₹31.60 per kg) in their bank accounts, and then they could buy rice at the ration shop at ₹32.60 per kg. The pilot covers around 12,000 cardholders and 52,000 beneficiaries, and seeks to replace subsidised rations with cash. The Jharkhand government plans to extend the scheme across the state, if it succeeds.

And it is not just the recipients who are upset, even the PDS dealers are annoyed with the system. “This is mainly because the dealers spend more time distributing rice. Earlier, they were able to distribute in a few days. Now, people come as and when they are able to get their DBT money. Even the biometric authentication takes time due to connectivity problems. If it takes 15-20 days to distribute, the official commissions are inadequate. Also, in the new system the dealers have to handle huge amounts of cash every month, which is not always safe or convenient, especially for those who live in villages distant from the bank,” says economist Jean Dreze, who is also part of the Right to Food campaign in Jharkhand.

And Nagri is only the latest in a series of unsuccessful DBT pilots. According to NITI Ayog’s surveys of DBT pilots in Chandigarh, Puducherry and Dadra and Nagar Haveli, this system is more expensive. These surveys also found that over time a small proportion of cardholders stopped receiving the cash subsidy. While the pilots in other states allowed cardholders to buy food items from the market, in Nagri, people are restricted to purchase grain from the PDS shop. A DBT pilot also failed in Kasba block of Purnia district (Bihar), though the government hasn’t stated why.

“If a system such as this should work, the government should have reliable systems in place like how it transfers salaries to its employees. But, in case of social welfare schemes, there are no systems; mismatches in the databases and the consequences are severe in this case,” elaborates Dreze.

“I don’t understand what this system is for? Is this all for five kilos of rice? All this new technology has only inconvenienced the people who need this the most. We need to get rid of private dealers as most of them do not want to ease the system for the poor. Chhattisgarh and Orissa have gotten rid of the private players and introduced Mahila Mandals and gram panchayats to distribute the PDS and the system works much better there,” points out Dreze.

“The DBT experiment in Nagri is yet another case where poor people are treated as guinea-pigs for unreliable technologies. Little effort is made to protect them from the dangers of these experiments,” adds Dreze.

The Raghubar Das-government had even declared 2018 as “Nirog Bal Varsh”; the year in which they vowed to intensify the fight against malnourishment. The Chief Minister Raghubar Das had stated that his government’s priority was to make the state free from malnourishment in the next three to four years But, the news on the ground is far from heartening. In fact, his government’s policies have only made it worse.