May 20, 2011, 12.00am IST
Rajiv Gandhi had famously remarked that for every rupee spent by the government on poverty alleviation, only 17 paise reached the intended beneficiaries. The recent World Bank review of 11 centrally-sponsored social security schemes in India is evidence that things have changed little. Confirming vast leakages and structural inefficiencies in delivery mechanisms, the review found only 40% of the targeted poor benefiting from the schemes. Ironically those schemes that do not specifically seek to identify the poor, such as NREGS and the widow pension scheme, have better success in covering them. For far too long our welfare schemes have been coloured by politics and stifled by corruption. The public distribution system - accounting for 1% of the GDP - leaks almost 60% of the foodgrains meant for the poor. This accounts for why India is home to a third of the world's malnourished children under the age of five, and ranks below China and Pakistan in the International Food Policy Research Institute's global hunger index.
A fresh approach to poverty alleviation is the need of the hour. In the medium term, pursuing self-selecting schemes along the lines of NREGS - that disincentivise non-target groups from pilfering resources - is a good idea. However, long-term reforms demand better identification of the poor and strengthening delivery mechanisms. Both can be achieved through greater integration of technology. For example, combining the Unique Identification (UID) or Aadhaar project with mobile banking could provide a stable platform for direct cash transfers to the poor. Similarly, mating UID with food coupons could improve access to foodgrains. The status quo must be challenged. Out-of-the-box thinking is the way forward.