Potential Concerns with the Proposed Food Security Bill

Yamini Aiyar and Gayatri Sahgal

On Friday, relevant ministries in the Government of India and the National Advisory council are going to start a round of negotiations to finalize the much awaited food security bill. The key issue up for debate is the question of universalization of the entitlement. The initial draft bill restricted the entitlement to the country’s poorest. The current negotiations are an effort to push for universal coverage as well as for a wider grain basket. The second and perhaps more critical issue for debate is the steps that need to be considered to deal with the widespread corruption and leakage in the current Public Distribution system. The new draft bill prepared by the planning commission has proposed that the disbursement process be linked to the UID which could deal help with the elimination of bogus cards ( to give a sense of the scale of the problem- since 2006, 5,300,000 bogus ration cards had been identified in West Bengal. Andhra Pradesh wasn’t far behind at 1,046,000 and Orissa was amongst the lowest at 250,000!). Linking with the UID is one important way of dealing with the corruption menace. But, corruption and leakage in the PDS is not just about bogus cards. At every step of the delivery chain, the system is plagues with perverse incentives that make accountability and efficient delivery impossible. To give you a sense of the problem, the Accountability Initiatives’ Gayatri Sahgal analyses the different levels of corruption in the PDS system. If the new bill is to ensure that entitlements reach the poorest, problems at every level of the system need to be addressed. This requires the political will to address systemic failures and undertake radical administrative reforms. Let's hope the new bill provides for that!

Diversion and Leakages in the PDS System

Key Facts

• There are significant leakages in the functioning of the PDS system. Only about 42% of subsidized grains issued from the Central Pool reach the target group. Over 36% of the budgetary subsidies on food is siphoned off the supply chain and another 21% reaches the APL households. (Performance Evaluation of Targeted Public Distribution System Planning commission, 2005).
• Data regarding the leakages in terms of type of food grain revealed 36% diversion of wheat, 31% diversion of rice and 23% diversion of sugar. Diversion appears to be more of a feature of northern, eastern and north Eastern states (Saxena, 2009).
• Share of food subsidy received by Below Poverty Line (BPL) families and Antyodaya Anna Yojana (AAY) scheme has been decreasing. In FY 2008-09, BPL and AAY received 84% of total food subsidy released, down from 80 % in FY 2006-07 (Accountability Initiative, 2010).
• Amongst the States, Bihar and Punjab have the highest rates of leakages; more than 75% of the grain allotted from the central pool fails to reach the intended beneficiaries. States such as AP, Kerala, Orissa, Tamil Nadu, and West Bengal, record leakages below 25% and are considered to be low leakage states (Planning Commission, 2005).
• At the level of the Fair Price Shops FPS, states such as Haryana, Bihar and Punjab record the highest levels of leakages (above 50%), while states such as HP, Assam, MP, Orissa, Tamil Nadu, and West Bengal record rates of leakages less than 10% (Planning Commission, 2005).
• The FPSs are generally not viable because of low annual turnover and they remain in business through leakages and diversions of subsidised grains (Planning Commission, 2005).
• Though the off-take per household has shown some improvement under TPDS, yet only about 57% of the BPL households are covered by the TPDS (Planning Commission, 2005).
• The cost of income transfer to the poor through PDS is much higher than that through other modes. According to the study, for one rupee worth of income transfer to the poor, the GoI spends Rs 3.65, indicating that one rupee of budgetary consumer subsidy is worth only 27 paise to the poor (Saxena, 2009).
• Leakages due to improper storage and transportation facilities are also significant. In FY 2008-09, Rs. 101 crore and Rs. 133 crore was lost due to poor storage and transportation respectively (Food Subsidy Budget Brief, Accountability Initiative, 2010).
• Leakages in the form of ghost cards are also widely prevalent. In West Bengal, 53 lakh fake ration cards were cancelled from July 2006 till December 2009 (Accountability Initiative, 2010).

Click to view the Leakages and Diversions in the Public Distribution System.

The UPA-II Government's Unfulfilled Promises

Yamini Aiyar, Director of the Accountability Initiative, assesses the performance of the UPA government.

(Click on the image to enlarge text.)

Grievance Redressal Mechanisms - The Ombudsman in Kerala

Joshua Stark

An elderly man, standing beside his daughter, is yelling and waving his arms. “A tree is overhanging his property and polluting his pond” whispers my Malayalam translator. “He wants it removed, but the panchayat has done nothing”. The man pauses briefly before resuming his offensive. His embattled target is another elderly man, a retired high court judge – the Ombudsman of Kerala. He is here in the northern city of Kannur in Kerala for two days to hold sittings and hear grievances – though they are not all as colourful as this one.

The Ombudsman – literally, the people's protector – is originally a Swedish institution which has since been adopted widely across the world. At its core, the Ombudsman is an office which dedicates itself to receiving, investigating and resolving citizen's complaints against government. The intent is to create an independent and powerful check on government bodies – state bureaucracies, service providers, and other state institutions. To do this, the Swedish Ombudsman for instance most often issues simple requests to state institutions. The Swedish Ombudsman also has the power to act as a public prosecutor – he or she has the power to bring a case to the courts on behalf of those who submit complaints. However, this has rarely been necessary.

Other Ombudsmen have had a more turbulent relationship with the state. In the early 1990s, many Ombudsmen offices were created in Latin America. In many cases, simple requests were not enough to resolve grievances. Faced with indifference and occasionally outright hostility, the Latin American Ombudsmen more often used their “moral power” as public protectors of the people to force change. In Guatemala the Ombudsman denounced prominent politicians, and in Honduras the Ombudsman defended the right of the opposition to run for President. In some cases, the state responded with more hostility. Some Ombudsmen had their budgets slashed, or were simply replaced.

The Kerala Ombudsman represents a particularly Indian approach to the institution. It functions effectively like a court, albeit one where some rules of procedure are simplified. A citizen files a complaint and is given a date for a hearing at one of the Ombudsman's sittings around the state. Once both parties are present at the hearing, they present their cases. The Ombudsman can then resolve the case if there appears to be a solution. Or, if he believes more information is necessary, he may order an investigation. In the case above, he might order the Deputy Director of panchayats to produce a report containing photos and measurements of the offending tree along with copies of the relevant building or pollution codes. At the next available sitting – which might be one month away, or much longer – the report will be presented and the Ombudsman will make a further decision.

Many of the complaints submitted to the Ombudsman are more serious than some dead branches in a pond. At the hearings I attended I saw cases regarding access to drinking water, non-payment of wages, construction of public toilets, land encroachment, unlawful construction, false entry in muster rolls for NREGA works, the allocation of houses designated for the poor, pollution from various industries, and the behaviour of commissions under control of a panchayat.

Unfortunately the Kerala Ombudsman has not received the support it needs from the state government. Since 2001 the Ombudsman has requested funds for an independent investigative team, and the government has consistently ignored this and other requests. As it stands, the Ombudsman must rely on local officials – usually the Deputy Director of panchayats – for all investigations. Despite the usual apathy, the state government has not been overtly hostile to the Ombudsman. This may be due to one of the Kerala Ombudsman's unique features – it is only given purview over local self government institutions, rather than any government action whatsoever. The state government – which decides the Ombudsman's budget and effectively appoints him – is beyond the reach of the Ombudsman. While this means that corruption, incompetence and indifference at the state level is left untouched, perhaps it does enable the Ombudsman to effectively deal with complaints at the local level. While having an elderly man yell at him about a tree is bearable, it is not clear whether the Ombudsman could withstand such an assault from the Chief Minister.

Joshua Stark is an intern with Research Foundation for Governance in India, Ahmedabad. He has been researching grievance redressal mechanisms in India with a special focus on the institution of the Ombudsman.

CWG 2010 here we come...but at what cost?

Mandakini Devasher Surie

Delhi is a city under siege! Over the last year, a silent army of civil engineers, urban planners, construction workers and contractorss have brought this to a standstill. Signs of the siege are everywhere – on uneven sidewalks and pavements which threaten to send pedestrians sprawling, on roads and flyovers where monstrous potholes threaten to swallow unsuspecting motorists and bring the city to a grinding halt. The mission? Make Delhi ready and able to host the Commonwealth Games (CWG) in October this year.

The games have been heavily criticised and not only because preparations for them have thrown everyday life in the city completely off kilter. Concerns have been raised about the ‘game worthiness’ of several venues, the hurried efforts to ‘beautify’ certain sections of the city, the efforts to ‘clear’ the city of slum dwellers, beggars and hawkers which in practice has meant the demolition slums across the city leaving thousands homeless. A recent report by the Housing and Land Rights Network (HLRN) titled “The 2010 Commonwealth Games: Whose Wealth? Whose Commons?” puts a spotlight on some of these issues. Using the Right to Information Act 2005, HLRN accessed a copy of India’s Bid Document for the CWG games as well as information from different departments on the monies spent so far on the games. Their findings are staggering:

CWG Factoids

• The bidding process from start to finish cost India Rs 137 crore. The Bid Document included an unprecedented offer by India to provide free luxury accommodation, travel and trips to participants, delegates, officials.
• India made a last minute offer of $7.2 million or Rs 32.4 crore to train all Commonwealth Games athletes’ which apparently ensured India’s bid for the games.
• The proposed expenditure on sports infrastructure for the games was pegged at Rs 150 crore in the Bid Document but a whopping sum of Rs 3390 crore has already been spent on building stadiums. That’s a shocking 2160% increase on the initial budget!
• Official and unofficial estimates of the total cost of the games range from Rs 10,000 crore to Rs 30,000 crore;
  

The sheer volume of money being pumped into the CWG is unprecedented. To put things in perspective in this year’s Union Budget allocations for the CWG increased by a jaw dropping 6235% (from Rs 45.5 crore in 2005-06 to Rs 2,883 crore in 2009-10) (HLRN figures). Is this a case of misplaced priorities or are there really substantial gains to be had from hosting the games? In theory, the CWG games are supposed to put Delhi on the world map, bring in foreign investment, tourism and generate jobs, but international experience suggests that this is not always the case.

Several studies have shown that the economic benefits of mega-sporting events such as the Olympic Games or World Cup are hugely over-estimated. In a post-games scenario, many countries have struggled to earn back in revenues the huge amounts invested. For instance, American cities hosting the 1994 FIFA World Cup earned $ 4 billion in revenues from hosting the games but they collectively lost between $ 5.5 billion and $ 9.3 billion. Many countries are overwhelmed by debt – after barely pulling off the Olympic Games in 2004, Greece struggled to keep public debt down, the effects of which are being felt now. The costs continue to escalate for years after with countries having to find resources to manage and maintain games venues.

There are also questions about who really benefits from such events? South Africa has spent 3.5 billion pounds on preparations (1.72% of its GDP) to host the 2010 FIFA World Cup, but there are concerns that most of the facilities will really benefit tourists and the middle class rather than South Africa’s urban poor. Over and above the, investments in infrastructure mean budget cuts for other sectors. The Delhi Government has already announced that it will not have funds to undertake new projects in the forthcoming fiscal year. Moreover, according to the HLRN report funds marked for social sector expenditure have already been reallocated by the Delhi Government for the CWG. Couple this with the city wide drive against hawkers and beggars and it’s no wonder many have termed the CWG ‘anti-poor’ in its approach.

It is perhaps keeping of all of these factors in mind, that the Government of New Zealand recently refused to support the country’s bid to host the 2018 Commonwealth Games because at $600 million it was too expensive. If only, such prudence had prevailed in Delhi. Come October, Delhi will play host to athletes’ and tourists from countries across the Commonwealth. In true sarkari style, things will be completed in breakneck speed, we’ll put on a grand old show and maybe we’ll even win a medal or two. But let’s not kid ourselves; we’re in for some tough times ahead – fiscal and otherwise.

Mandakini D Surie is a Research Associate with the Accountability Initiative.

Accountability Global News Scan

A round up of accountability news and views from around the world.

USA: Obama Signs Law Supporting Global Press Freedom

President Obama signed the Daniel Pearl Freedom of the Press Act that will require the US government to draw attention to nations that tolerate or sanction press freedom violations.

China: US climate change envoy calls for more transparency

The US Special Envoy for Climate Change in Beijing called on nations to increase transparency to combat global warming, and raised prospects of China-US cooperation on the matter. China’s special representative said that countries attending the upcoming Cancun summit favour a legally binding climate accord by the end of 2011.

Thailand: Thailand extends censorship against anti-govt. protestors

After violent crackdowns on protestors seeking to topple Prime Minister Abhisit Vejjajiva, the government continues to expand censorship by banning publications, thereby reducing both media and government transparency.

UK: The public has a right to know the truth

Secrecy in government is often a feeble excuse for inefficiency, argues Bruce Anderson in his assessment of the Tories’ commitment to transparency and the need for a more accountable government in the UK.

Africa: A new dawn in Africa

Economies are growing, émigrés returning and attitudes towards corruption are beginning to change, bringing hope for a more sustainable future in this transitioning continent.

Pakistan: Pakistani Citizens Demand their Right to Speak without “Fear of Threats”

After a series of government bans on websites such as Facebook and Youtube, free speech and human rights activists in Pakistan issue a statement to stand up for the Pakistani citizenry’s right to access information and peacefully voice their opinion.

Australia: Council’s move to change Right to Information laws “suspicious”

Recent moves by lawmakers in Brisbane raise suspicions that the cabinet is attempting to subvert Right to Information laws.

After the Tsunami: Malaysia’s Transformed Political Landscape in 2004 Continues to Test its Democracy

The documentary Selapas Tsunami (After the Tsunami), assesses the sweeping political changes brought about by the results of the 12th General Election in Malaysia, and discusses the ramifications these changes have had on government accountability and the building of an inclusive democracy. The film raises powerful arguments for decentralization—the benefits of greater regulation at the local level, the friction between federal power and local control--and highlights the inevitable backlash from an old guard that is uncomfortable with the transparent new model of democracy.

If Only Khoslaji Had the RTI...........

Abhishek

One of the most difficult things to get in Delhi is land for your house. Even more difficult is figuring out whether the land is legal or illegal, whether the land deal is genuine or if someone is tricking to trick you and make you a victim of a land fraud scam. Considering all the hassles, you might just choose to buy a flat, more so a flat which is built and allocated through the government, only to find out that there is no water in the taps, an electric current is running freely all over the place and the whole area just across the street is some kind of a hub for household industries and it just wont let you sleep. Even worse is that you open a shop on what you consider perfectly legal land only to discover after a few years that a huge crane is standing in front of your house, ready to tear apart the shop on the ‘now encroached’ land. For all of this and more, there is now a one pill cure for all the ailments in the form of the Right to Information Act.

A closer look at the RTI applications submitted to the Delhi Development Authority (DDA) reflects the power of information to bring about a more transparent and accountable system of governance. The RTI also helps citizens to overcome bureaucratic hurdles and the associated corruption which have harassed the ‘common man’ for ages. Many of these applications are inquiries about a piece of land and its use, or a flat which a person is either currently using or plans to acquire in the future. There are some which are concerned with general queries about the maintenance of colonies, parks and the associated area in a particular locality. While these cater to the interests of an individual or a group of citizens, there are others which are relevant to the general public as a whole and question the DDA on planning, implementation and malfunctioning of public works. Besides this, there are also questions on corporate houses, various government departments who seek to benefit from the information gained about any kind of prevailing contract, prospective work or just a suspected case of corruption which negatively affects their interests.

The most surprising thing about applications to the DDA is that its pretty evident that a lot of DDA officials are using the RTI to settle intra/inter-departmental issues and raising questions about the general functioning of the DDA. These musings within the DDA often take the shape of settling personal vendettas using RTI. But these cases are an exception, rather than the norm.

The role of RTI in raising awareness and generating public opinion can’t be denied. From the welfare of the poor and the homeless to the banning of sale of narcotic substance, citizens have tried to question the government on many important issues. They have tried to direct government’s attention towards forgotten matters and bring out the flaws in our system of governance. The most important flaws, which courtesy RTI, are out in the public is the tremendous gap between existing policies and their implementation. By focusing on it citizens have certainly helped in improving their lives, the lives of the people around them and most importantly the state of governance. With the increasing awareness amongst citizens about the the value of RTI as a tool, one can picture a more accountable, transparent government in the future.

Alas, only if the fictitious Khoslas of "Khosla Ka Ghosla" fame had been able to use the RTI, they would not have fallen victim to a land extortion racket.

Abhishek is an intern with the Accountability Initiative. He is a graduate from the Tata Institute of Social Sciences, Mumbai.