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India opens the purse for the poor
Recently, flood relief money in Bihar was siphoned off into the coffers of prominent politicians and senior government officers.
NEW DELHI - The cost of the project is estimated at more than US$40 billion per year. The aim is to provide a human face to India's economic reforms as well as permanently and politically establish the Congress Party and its supreme leader, Sonia Gandhi, in the consciousness of the majority who really matter - the poor.The contours of the anti-poverty scheme are quite apparent. The project guarantees work for at least 100 days to one member of every rural household in 200 districts, at a rate of US$1.50 per day. (India's average minimum monthly wage is approximately $60.) Ninety percent of the expenditure will be borne by the central government and the remainder by the states. This translates into a massive cost and scale, but the government believes that it can pull it off. By Rajesh Kumar, Section News Posted on Tue Aug 23, 2005 at 05:52:23 AM EST
Sonia's Robin Hood act, in which she will "rob" state coffers to give to the poor, is not without logic. A quarter of the county's population of more than a billion still languishes below the poverty line. At the same time, India has been steadily growing, with all the three main sectors - industry, services and agriculture - doing well. There are pockets of extremely high profits, such as information technology (IT)and business process outsourcing. It thus becomes important that some of the resources being generated should be transferred to the poor who have been left out.
This week, the World Bank announced it would lend India $9 billion over three years for development projects in rural areas. World Bank president Paul Wolfowitz, who is visiting India, said the funds would be used to sustain the growth needed to uplift 250 million people out of poverty. "Though it is making rapid strides, India has an unfinished agenda," Wolfowitz said. "Infrastructure constraints are an impediment to growth." Earlier this month, the Congress Party introduced the National Employment Guarantee bill in parliament, a brainchild of Sonia. She passionately argued in her speech in parliament that a country that is expected to grow steadily at 7% per annum should not have any problems in tiding over the expenses of the project. To Sonia's credit, her ideas are at least better and more mature than those of several hare-brained politicians in this country who like to gather votes by inciting communal and caste differences. An anti-reforms agenda is also of no help either. The solution is to bridge the two sections of Indian polity without the bad blood, which Sonia is attempting. There is also every political sense to Sonia's argument. Last year in May, Congress president Sonia could have been the prime minister, but she refused, choosing incumbent Manmohan Singh instead. This one act catapulted her into the realms of political infallibility as "renunciation" and "sacrifice" remain the highest virtues of Indian ethos. This year, Sonia looks to cement her position a la her famous mother-in-law and former premier, Indira Gandhi, establishing herself once and for all in the hearts of the other 700 million people of India who still remain outside the vortex of economic growth and development. One of the abiding slogans associated with Indira was garibi hatao (remove poverty). The poor remain, but the image of the do-gooder provided Indira an enviable hold over the country that no other politician could match. Sonia wants to follow in her footsteps. India's recent political history is strewn with leaders, at the forefront of economic reforms, who have lost in elections. These include former prime minister Atal Bihari Vajpayee and former chief ministers of Karnataka and Andhra Pradesh states, S M Krishna and Chandrababu Naidu, respectively. Their successes in engendering growth and changing the lives of some created resentment among the many more who could witness tall buildings, flashy cars and swanky lifestyles, without access to any. If there is one guaranteed success of Sonia's project, it will be to uplift the image of the Congress Party and Sonia among the poor, cutting across religious and caste calculations that dominate Indian politics. With elections due in left bastions Kerala and West Bengal, Sonia has managed to revive some of the pro-poor image of Congress that stood Indira in such good stead. The left parties, who are the key coalition partners of Congress, have succeeded in the past year to usurp the role of the voice of the underprivileged, painting both Congress and the opposition Bharatiya Janata Party as neo-liberal, pro-reform parties.
Economic critique Further, the implementation is always tardy and it creates a huge constituency of corrupt petty bureaucrats and encourages cadre politics, as happened during Indira's time. More recent examples include the failure of similar schemes in the state Maharashtra, where the implementers have built minor palaces for themselves in the rural hinterland. Recently, flood relief money in Bihar was siphoned off into the coffers of prominent politicians and senior government officers. This is apart from blowing a hole in Manmohan's belief in fiscal discipline. There have been reports in the media that Manmohan's beliefs in prudent economic practice did tread on Sonia's vision to emerge as a messiah of the poor. Although the leitmotif of Manmohan's 58th Independence Day speech on August 15 from the ramparts of the Red Fort in Delhi was the aam admi (common man), it is well known that his approach to dealing with problems is different. Manmohan is in favor of creating an enabling environment in the rural sector through appropriate infrastructure and business opportunities that are more sustainable through implementation of user charges. Aware of the dangers of pilferage, Sonia has acknowledged that the "benefits do not always reach the poor since the delivery systems claim too large a share of the outlays". One difference from the earlier situation is that social activists have been empowered by the recently enacted Right to Information Act, which the government hopes will enable greater public scrutiny of the program. The act has reportedly been successful at plugging loopholes in similar projects in Rajasthan. But it will still be a tough ask to check funds that are pilfered through common tricks such as fake muster rolls and thumb impressions of the supposed beneficiaries. Indeed, if Sonia does also manage a modicum of success in the implementation of her grand plans, with plenty of help from Manmohan, who is a professional economist, she could yet step out of the shadow of Indira and become a statesman rather than just another politician. Siddharth Srivastava is a New Delhi-based journalist.
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