Delivering Food Subsidy - The Oxford Topic of Food, Politics, and Society - page 322

Concluding Comments
The only sorts of arguments that can become compelling against cash transfers are
whether they are feasible and whether they will indeed reduce corruption. On feasibility,
one can ask whether cash transfers are possible in the Indian setting where the banking
network is not widespread in rural areas and most people do not have bank accounts.
On corruption, one can ask whether cash cannot be siphoned off just as easily as grain.
Indeed, these two questions are related, since for cash transfers to be able to reduce cor-
ruption they need to be a part of a well-functioning system.
As discussed earlier, new technologies that allow secure biometric identification
and permit access to bank accounts through cell phone networks hold great prom-
ise. Any potential beneficiary will then be able to have a bank account in which
the due amount can be directly deposited bypassing the local bureaucracy that is
often responsible for siphoning off the money. Notice that new technologies also
can be applied to reform in-kind transfers. Real-time policing of the supply chain
and secure biometric id can reduce corruption losses. However, these reforms will
not address the potential adverse impacts of expanded government involvement in
procurement.
But is it conceivable that a system can create and maintain a databank for over 1.2
billion people and use it without significant errors? This is a reasonable doubt, and all
we can hope for is that there will be many pilot projects and experiments so that we
get to examine whether the system works. The best possible scenario is where states are
allowed to experiment with different systems including cash transfers, reformed in-kind
transfers, or hybrid models (e.g., cash transfers in cities and in-kind transfers in finan-
cially underdeveloped regions). We will learn a lot about the strengths and weaknesses
of various ways to deliver food subsidy, and the most effective ways will sought to be
emulated across the country.
Notes
1. For accounts of India's early food policy, see Bhatia (1970) and Chopra (1981).
2. This is acknowledged officially. The latest such statement is from the Planning
Commission (2011, p. 77), which stresses that unless the supply chain is modernized and
private investment encouraged, “the intermediation process for farm products, especially
perishable products, will remain antiquated with considerable wastage, low net realization
to the farmers and high consumer prices.”
3. There are many such regulations intended for the protection of either producers or con-
sumers. For instance, private players can buy produce only from the so-called regulated
markets. In particular, they are not permitted to directly buy from farmers or to set up
their own markets. The reforms of the 2000s aimed to dilute the monopoly of these regu-
lated markets.