The real tragedy of the poor is the poverty of their aspirations, said Adam Smith. But that was much before communication revolution removed all barriers and helped poor see what they miss in their life. Even a largely semi-feudalistic nation like ours saw people casting their vote in search of a leader who would deliver what they seek. This saw powerful politicians like Indira Gandhi coining an attractive slogan “Garibi Hatao” and turn the table on her adversaries. In states after states one saw rise of regional parties committing themselves to distributing doles for the poor. People fell for such leaders.
This was in the past enticing the generation with limited aspirations. Today’s youth, who form nearly 65% of the population, are smarter. Not only the economy they live in is complex depriving them the stability of modest living conditions available to their parents, their aspirations, too, are larger. A politician, today, is challenged to meet this increasing aspirations in the days of decreasing opportunities.
Politicians now must deliver sustainable growth – growth that is inclusive. Growth is inclusive when it takes place in the sectors in which the poor work, occurs in places where the poor live and uses the factors of production that the poor possess. In India there is one onerous challenge – that of the 16 paise barrier.
Former Prime Minister Rajiv Gandhi had once said that of every one rupee allotted for betterment of the poor only 16 paise reached them. The pilferage at various points before reaching the targeted beneficiary remained an unsolvable issue for all administrations. This made schemes like MNREGA lose their lustre. In addition, a series of corruption scandals seen exposed during the UPA government turned people restless. Prime Minister Narendra Modi was elected with the expectation that he would clear the Augean Stable and bring in “achche din”.
Prime Minister Modi knew well that he would not be allowed any honeymoon period. People were looking for transparency in governance. As a prelude to that, the Prime Minister launched the ‘MyGov’ portal. The intention was to engage people in discussing governance issues. With nearly two million registered members, the portal did not exactly fire people’s imagination. In any case who cares to give suggestion to the PM or to engage is fruitless discussion!
But the next effort, Pradhan Mantri Jan-Dhan Yojana did help, despite passive resistance from bankers. The aim was to open accounts for unbanked persons. Till April 2016 the progress report shows opening of 21.68 crore accounts with deposit of Rs 36,795 crore. Of these accounts 26% are zero balance accounts. Of these 9.68 crore accounts have been seeded with Aadhaar cards. Evidently, enrolling of Aadhaar is painfully slow in many parts of the country. Out of these accounts in September 2015 nearly 45% were zero balance accounts. This came down to 26% by April 2016. Clearly many are using the PMJDY accounts. This also illustrates behavioral changes.
If one single initiative of the Government deserves notice it is the JAM initiative – leveraging Jan Dhan Yojana, Aadhaar card and Mobile. While the bank accounts have given millions of Indians access to banking services, they have also played a major role in stopping corruption. Now, subsidies get deposited directly in the bank accounts in the form of direct benefit transfers; eliminating leakages and scope for any discretionary action.
PAHAL Yojana, recently entered the Guinness Book of World Records for being the world’s largest direct cash transfer scheme. Under PAHAL Yojana, LPG subsidies are directly deposited into the bank accounts. At present under it more than 14.62 crore people are receiving direct cash subsidies. This scheme has also helped to identify and block around 3.34 crore duplicate or inactive accounts, saving thousands of crores of rupees. Currently, the Government is using Direct Benefit Transfers for around 35-40 schemes and approximately Rs 40,000 crores were directly transferred to the beneficiaries in 2015. With the passage of Aadhaar Bill 2016, the process of targeted delivery of financial and other subsidies and benefits will be more transparent and seamless reducing interventions by corrupt officials.
Apart from providing the basic banking facilities to people, the Government embarked on providing an insurance and pension cover to the citizens. Pradhan Mantri Suraksha Bima Yojana provides accident insurance worth Rs 2 Lakh at just Rs 12 per year. Pradhan Mantri Jivan Jyoti Bima Yojana provides life insurance at just Rs 330 per year. Atal Pension Yojana provides a pension of up to Rs 5,000 a month depending on the contribution. More than 9.2 crore people have enrolled for Pradhan Mantri Suraksha Bima and almost 3 crore people have joined Pradhan Mantri Jivan Jyoti Bima Yojana. Around 15.85 lakh people have registered for the Atal Pension Yojana. As people start benefitting from such schemes by drawing on pensions and benefits, these schemes will turn more popular with people demanding the service as a matter of right.
The effort to electrifying villages is another direct connect with the people reminding them the people-friendly steps initiated by the Government. Recently launched Pradhan Mantri Ujjwala Yojana is another such scheme which aims to provide cooking gas connections to five crore below-poverty-line beneficiaries over the next three years. The scheme will benefit women – the poorest in a poor family.
There are many schemes churned out regularly with the Prime Minister losing no time in touring and addressing people directly, knowing well that mainstream media or even social media cannot reach his target group. Effectively, Modi is continuing his successful people connect election campaign policy of 2014 on a different scale suiting the non-election phase of political activity. Popular leaders who rise from the bottom of the political pyramid know how not to lose their people connect ability. In elections, this contact places them apart from their competition.
The continued effort of Modi has created two irreversible action points for all political leaders. First, all benefits must reach people direct without a large part of it being skimmed by the babus or politicians in the delivery chain. Second, the leader can no longer afford to keep away from the people till the time of next election. A leader must come down to his target group regularly with some gift wrapped scheme. Connecting with people through the medium of media will no longer work.
While pundits will keep debating over the arrival of achche din and announce their verdicts, what will work in the final analysis is the people connect developed through effective and transparent schemes delivered in presence of witnesses on ground. Not only the Prime Minister but even Chief Ministers of certain states have been doing this. Continued delivery of achche din in small doses are necessary steps for political success. The Modi Government is doing the same since it took office two years back. How it sways people will be apparent in 2019.
But more than a return to power by Modi, what matters to the nation is that the structure of delivery system erected now cannot be reversed by any future Government, at the Centre or states. This is arguably the most important take away from the Modi Government so far.