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Written by Gaurav Gupta, Roopa Kudva | Updated: July 13, 2020 9:29:54 am

Ninety four per cent of eligible families had received extra PDS rations by end May and 80 per cent hadreceived cash entitlements averaging close to Rs 2,000.

(Also written by Rohini Nilekani)

In a welcome move, the Pradhan Mantri Garib Kalyan Yojana, which targets 800

million people for free rations through the Public Distribution System, has been

extended until November. As the COVID-19 pandemic rages on, a massive effort is

being undertaken to minimise the economic impact on our most vulnerable

population. Schemes such as Jan Dhan, PM Kisan and PM Ujjwala aim to transfer Rs

532 billon to 420 million people. These efforts have proved to be reasonably

successful. With this success, and with so many people now in danger of slipping

into poverty, it is imperative to create a regime, even with a sunset clause, of

universal benefits.

We have commissioned a multi-round survey of 47,000 households, mostly below

poverty line, across 15 states. The surveys explore whether relief schemes have

been working as intended, who is missing out and what more is needed. Our data

revealed the immediate, and likely long-lasting ,nature of the economic shock.

Primary income earners in two-thirds of the households have lost their jobs or

wages. The average family has lost more than 60 per cent of its pre-crisis income

and is now making just Rs 4,000/month. Twenty four per cent of low-income

households have run out of money and supplies. Forty per cent families are in debt.

In some states, as many as one in five primary income earners do not expect to find

work in the near future.

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In this dire situation, government relief has been an important lifeline. Ninety four

per cent of eligible families had received extra PDS rations by end May and 80 per

cent had received cash entitlements averaging close to Rs 2,000. Our data also

suggests that about five million households could have both run out of savings and

not received any cash transfer from the government.

We estimate that over 55 million workers, who were earning above poverty line

incomes, have lost jobs, temporarily or permanently, during this crisis. Many such

workers would not show up as eligible under standard lists. The scale of current

urban-rural migration makes this challenge worse. If we shift to universal benefits

we can minimise a situation where millions miss out on critical relief. Whoever

turns up to a ration shop needing free/subsidised rations should be able to get it.

People should be able to sign up for a cash relief transfer with minimal paperwork.

The good news is that now it’s more possible than ever before.

Digitisation has created efficiencies that can be leveraged to expand the welfare

net. The vast amount of leakage in the welfare system was not due to fraud by

citizens, but because of fraud and inefficiency by those delivering the benefits.

Successive governments should be applauded for the steep reduction in such

problems. Implementing the JAM trinity has helped lower transaction costs, reduce

leakages and reach beneficiaries quickly. Aadhaar can prevent identity frauds. Our

sophisticated payments infrastructure enables direct benefit transfers. The speed at

which MGNREGA payments are made to beneficiaries has improved more than

threefold since 2015. Pilots for the One Nation-One Ration Card project have shown

that inter-state portability is possible.

Several states have experimented with a more universal approach with positive

results. Tamil Nadu’s PDS system has strong coverage and equitable pricing,

delivering 20 kg of rice at Rs 1/kg every month to all families who need it. More

recently, Chhattisgarh universalised PDS to provide for their returning migrants

with encouraging results. MGNREGA has always been open to all rural households.

We could factor in voluntary opt-outs. The “Give up LPG Subsidy” campaign offers

many lessons. By highlighting the real intended targets of the relief effort and the

adverse impact on millions of people, others could be inspired to give up their own

benefits. This could reduce some of the burden on the exchequer.

We are in a marathon when it comes to this pandemic. People will need support for

longer than anticipated. During a crisis, the emphasis needs to be on including

those who really deserve the help rather than making sure the wrong people are

kept out. It’s precisely because the current systems are largely working that we can

contemplate a universal benefits approach. This approach can be discontinued

once the pandemic ends and the economic shocks abate. The PM’s recent

announcement is a strong starting point. Let’s extend that further by making it

universal — free basic rations to whoever claims to need it.

Nilekani is a philanthropist and chairperson, Arghyam. Gupta is partner and

Asia director, Dalberg Advisors. Kudva is managing director, Omidyar

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Digitisation makes welfare schemespossible. It can be discontinued whenpandemic endsWe are in a marathon when it comes to this pandemic. People will need support for longer thananticipated. During a crisis, the emphasis needs to be on including those who really deserve the helprather than making sure the wrong people are kept out.

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