A group of economists and social scientists have urged Bihar chief minister Nitish Kumar to not buckle under pressure from the Centre to use Aadhaar-based point of sales (PoS) machines for the distribution of rations under the public distribution system (PDS). These machines have been found to suffer from several technological shortcomings, the academics said, so Bihar should adhere to its own “well-tested PDS reforms” which involve “timely door-step delivery of grain, putting ration lists and other PDS data online and ensuring a fixed schedule for delivery of grain”.
In a letter to Kumar, economist Jean Drèze and his associates Kamayani Swami, Reetika Khera and Ashish Ranjan have also referred to how the PoS system failed in the states of Jharkhand and Rajasthan, where it is being tried out.
The Wire had earlier reported that Drèze and Sneha Menon had done field research and checks at a pilot project of the scheme in the Ranchi district of Jharkhand and learnt that a number of technological glitches had cumulatively resulted in denial of rations to a large number of people.
The group warned the Bihar chief minister on what he might experience should the state government follow the directions of the Centre blindly on the issue. They also wrote about their apprehensions about the imposition of PoS machines in the PDS and about replacing food with cash.
Drèze and others also noted that they had been watching the PDS in Bihar with keen interest and were impressed with the rapid improvements that took place until 2014. However, they expressed their disappointment with the initiatives, saying their most recent survey in June 2016 had revealed “no progress” in the past two years.
To add to the complexity of the situation, they said “we hear that the central government is putting pressure on state governments to explore two alternatives to the PDS: switch to cash, or deploy Aadhaar-enabled machines at ration shops. In response to this pressure, several state governments have started using PoS machines.”
Referring to their own experience with PoS machines in Rajasthan and Jharkhand, they said it had been “very negative”.
“On the one hand, PoS machines fail to address the main source of corruption, which is quantity fraud (dealers give people less than their full entitlements) rather than identity fraud. On the other hand, because the PoS system is so unreliable (it requires several fragile technologies to work together, in addition to correct seeding of Aadhaar numbers etc.), it ends up depriving large numbers of people of their entitlements. In Ranchi District (the pilot district in Jharkhand), PDS cardholders have been getting less than half of their entitlements since the PoS system was made compulsory. Imposing a technology that does not work on people who depend on it for their survival is a grave injustice,” they explained to Kumar.
They said many states have decided to try PoS machines because they understand that the other option given to them by the Centre – to switch to cash transfers – is neither practical nor advisable. “Among other issues, the banking system in Bihar is simply not ready to handle mass cash transfers. As with NREGA wages and social security pensions, the payments are likely to be very irregular and chaotic, depriving people of the little security they have from the PDS and causing much discontent.”
In a situation where many states may be finding themselves stuck between the devil and the deep sea, the group has suggested that instead of switching to other systems that are almost bound to fail, Bihar should persevere with its PDS reforms.
“Some of these reforms have already been initiated in Bihar, with significant results, but others are yet to be implemented (in our experience, for instance, very few PDS shops in Bihar have an information board). Further, much more needs to be done to make PDS dealers accountable, if not replace or remove them altogether as has been done with much success in Chhattisgarh and Odisha,” they said.
Finally, the group suggested that Bihar government could also consider using non-biometric PoS machines that record transactions in offline mode, for weekly uploading on the PDS portal. This would ensure reliable recording of last-mile transactions without the fatal dependence on multiple fragile technologies inherent in the PoS system. Such a system is already under implementation, with some degree of success in Madhya Pradesh.