Wednesday, November 28, 2012

Opposition stumped by Congress’s Direct Cash transfer scheme….

There seems to be no limit to how inane the arguments can get when one is caught off guard. Stumped by the Center’s fast-tracking of the direct cash transfer scheme, which no one expected to be rolled out during the tenure of UPA-2, political opponents of the Congress are struggling to find cogent arguments to somehow discredit the bold initiative. That they are attempting this impossible task at all shows just how desperate, and how badly rattled, they are.

One of the inane arguments presented is that this cash transfer is a bribe to the voters! So if the government gives subsidized this and subsidized that to the voters, that’s not a bribe, but when it converts that to cash, it is a bribe! There is no logic in this. It only show the kind of fear that has spread through the opposition ranks with everyone acutely aware of the potency of the scheme. Cash in hand is a far more powerful electoral currency than a subsidy in kind. That’s what is really riling the opposition. Somehow they would like to stop it. Ideally, they would like to have been the authors of this game changer. That they have been overtaken politically by the Congress is just unacceptable to them.

The other argument is that the timing makes the objective suspicious. Now I have two counter arguments for this. Firstly, the elections are at least 18 months away. This is 30% of the life of the government. So are we saying that no big initiatives should be taken even when there is so much time left? It’s supposed to just sit twiddling its thumbs for such a long time? Is the opposition saying that policy paralysis is the only acceptable prescription for the last 30% of a government’s life? This is bizarre! The other counter argument I have is that the opposition conveniently forgets that the government is also a political dispensation. It has its own political goals just as much as the opposition has. The government will time its political moves in a way that benefits it the most, just like the opposition times its moves too. How’s this argument valid at all then? How is it ok that the opposition can play politics and that’s fair game, but when the government does so, it becomes wrong?!

The third specious argument was given by the Left yesterday. They say that in times of high inflation, cash is not as good as the underlying goods. This argument would be fundamentally correct, had it not been for what our experience has been with such things in the past. Take NREGA for instance. It started off by being a scheme providing Rs 100 a day to the beneficiaries. Soon, as the rate of inflation increased, the government linked the daily payment to inflation. Take government salaries. They are all directly linked to inflation. Take the MSP the government gives to farmers. The year on year increases are closely linked to inflation. So in India, the Left’s argument is not valid. When inflation starts to take a toll, the government will proportionately increase the cash dole. Incidentally, this was the same argument used by Obama recently in the US election campaign against Romney. Romney preferred giving a “voucher” which is like cash, with which the beneficiary could buy any insurance policy. Obama’s point was that the voucher would soon be insufficient to cover the increasing costs of insurance. The Left’s argument ironically appears to have been minted in the US! The Left should now love the US!

When I wrote yesterday that neither Kejriwal nor Anna had applauded this huge corruption busting initiative of the government, one of my readers responded by saying that this is akin to first robbing a person and then returning his money to him. This is another inane argument. This is the kind of negativity we have to avoid if we have to make progress on our various issues. Because the essence of this argument is that we shouldn’t correct what has historically been wrong. And if someone is making amends, then they must be doing so because of some ulterior motive! By this logic, why should we enact the Lokpal Act at all? It will only be reversing an age old ill! How can not enacting the Lokpal (the crux of Anna’s agitation)be a big problem, but enacting it not be a big deal? Taking the metaphor cited by my reader forward, is it better that we don’t return the money to the person who we have robbed in the past?

As a result of such political desperation, the real issues are not being discussed. One of them is that when cash reaches the hands of the poor, will they switch their spending from food and fuel to liquor and lottery. That would be socially debilitating. It would increase malnutrition amongst children and women, undoing a lot of the progress we have made in this area. There is also a worry about logistics. The government’s calendar is ambitious, but will other institutions be able to keep pace? Will banks open accounts at double quick speed? Will Aadhar enrollments cover the entire country so soon? More importantly, will the government have the time to make mid-course corrections when it experiences implementation problems (which are bound to be there)? No one is talking about these, perhaps because they are politically not very sellable to the voters!

One of the stories in the papers today is disturbing. Apparently, the government is considering providing cash transfers, in some cases like LPG, even without the backing of Aadhar cards. This is dangerous because fictitious, unverifiable, bank accounts can be opened by corrupt public officials and intermediaries, pocketing huge amounts for themselves in the process. It is only when these bank accounts are backed by biometrics – which are unique to each human – can this be prevented. In its rush to reap political dividends, the government should not go overboard. A bad start can derail a good program and a game changer can become a game destroyer. Its better to be a little late than sorry.

The real truth is that the opposition – especially the BJP – has got shaken to the bone by the direct cash transfer scheme. No one expected this government to wake up so determinedly and start firing from all its cylinders so soon. The opposition tried everything to stop this from happening – stalled Parliament, questioned Executive decisions, made arbitrary corruption accusations. But the Congress, from a position where it was being held hostage, has now started turning the tables on its captors. It’s burning midnight oil and storming ahead like there’s no tomorrow. The opposition has a reason to be distraught!

No comments:

Post a Comment