A Win
The Direct Benefit Transfer (DBT) together with the Give It Up campaign for the Liquefied Petroleum Gas (LPG) subsidy in India has been called a major game changer by leading economists and policy analysts in India. The most important and visible impact has been in terms of the savings to the State Exchequer, to the tune of several thousand million rupees. Most of it has been brought about by reduced pilferage of the subsidy money, on account of the benefit being transferred directly to the beneficiary.
A good chunk to the savings has also been contributed by about 1 million LPG users giving up their subsidy as a response to the Give It Up call by the PM. As per data shared by the 3 largest LPG providers in India (Indane, HP Gas & Bharat Gas), every day several hundreds of affluent consumers are opting to let go their subsidies.
To give credit where due, the DBT underwent pilot implementation towards the fag end of former PM Manmohan Singh's 2nd tenure. The takeaway - for successful implementation the scheme is dependant on the availability and the linkability between the National Identification Number, Bank Account and computerized records, among others. Narendra Modi Government launched the revamped program targeted towards LPG subsidy in November 2014, after some preliminary work on the loopholes identified from the pilot roll-out earlier.
Sending the Right Message
I was visiting a family in my native village, along with my father, last December. This was around the same time when LPG distribution centres were asking people to fill out forms to update their bank account numbers for DBT. Like most other families in my village, this wasn't a very economically better off family. This came up in the course of our conversation, and the matriarch in the family was not happy with this additional 'hassle' that they are having to go through, something that they could do without. She also was thinking that the LPG price has actually increased, now that the family has to pay out more.
My father then explained that the government isn't increasing any LPG prices, but is simply transferring the subsidy amount to the bank account of the family. The distribution system would end up being more efficient, and the LPG quota per family and the subsidy will not be misused due to loopholes in the process.
I just thought, there will be several like the lady who hasn't really understood the revamped program - what it does for the people, or for the country; a problem of communication. May be it will grow on her over the years, with time. Made me also think about how many people really don't know that the LPG they are getting are highly subsidized by the State. This program will also end up creating awareness that the government is footing part of the LPG bill of every household in the country, at least those who have not given it up, yet.
The next steps
The obvious next step would be to extend this program to several of the other subsidy programs that the State runs. That would amount to another big win over corruption. But, in my opinion, the immediate need is for GOI to show to the people how these savings have been put to a better use. How is the money being routed towards fulfilling the objectives of the 'Give It Up' program? Or what other initiatives are being funded with these savings.
Or how about our MPs letting go SOME of the unreasonable perks and subsidies that they enjoy at the taxpayers' expense. Or what about finally fulfilling the promise of One Rank One Pension, for the good folks in our Armed Forces? Unless proven otherwise, many in India are inclined to think that the savings generated thus is just funding the perks of our corrupt politicos, and 'down the drain' (to use a phrase someone used on my FB TL). Having seen the amount of money swindled away in corruption over the past few decades, I cannot really blame anyone for being skeptic. Some people would need to see more tangible outcomes before taking the plunge for programs like 'Give It Up'. People aren't worried much about money that the Government spends, as long as the spend has been judicious. Quite sure, several more would join in thus, for it also gives a feel-good factor, of having done something to contribute to the needy fellow citizens, and to the country.
These quick wins every now and then, are important for the optics - realities that will matter when the incumbent is up for re-election in another 4 years' time.
~Cheers, MT.
The Direct Benefit Transfer (DBT) together with the Give It Up campaign for the Liquefied Petroleum Gas (LPG) subsidy in India has been called a major game changer by leading economists and policy analysts in India. The most important and visible impact has been in terms of the savings to the State Exchequer, to the tune of several thousand million rupees. Most of it has been brought about by reduced pilferage of the subsidy money, on account of the benefit being transferred directly to the beneficiary.
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| Source: Give It Up portal |
To give credit where due, the DBT underwent pilot implementation towards the fag end of former PM Manmohan Singh's 2nd tenure. The takeaway - for successful implementation the scheme is dependant on the availability and the linkability between the National Identification Number, Bank Account and computerized records, among others. Narendra Modi Government launched the revamped program targeted towards LPG subsidy in November 2014, after some preliminary work on the loopholes identified from the pilot roll-out earlier.
Sending the Right Message
I was visiting a family in my native village, along with my father, last December. This was around the same time when LPG distribution centres were asking people to fill out forms to update their bank account numbers for DBT. Like most other families in my village, this wasn't a very economically better off family. This came up in the course of our conversation, and the matriarch in the family was not happy with this additional 'hassle' that they are having to go through, something that they could do without. She also was thinking that the LPG price has actually increased, now that the family has to pay out more.
My father then explained that the government isn't increasing any LPG prices, but is simply transferring the subsidy amount to the bank account of the family. The distribution system would end up being more efficient, and the LPG quota per family and the subsidy will not be misused due to loopholes in the process.
I just thought, there will be several like the lady who hasn't really understood the revamped program - what it does for the people, or for the country; a problem of communication. May be it will grow on her over the years, with time. Made me also think about how many people really don't know that the LPG they are getting are highly subsidized by the State. This program will also end up creating awareness that the government is footing part of the LPG bill of every household in the country, at least those who have not given it up, yet.
The next steps
The obvious next step would be to extend this program to several of the other subsidy programs that the State runs. That would amount to another big win over corruption. But, in my opinion, the immediate need is for GOI to show to the people how these savings have been put to a better use. How is the money being routed towards fulfilling the objectives of the 'Give It Up' program? Or what other initiatives are being funded with these savings.
 |
| Source: The News Minute |
These quick wins every now and then, are important for the optics - realities that will matter when the incumbent is up for re-election in another 4 years' time.
~Cheers, MT.
