Sen's clout shows in UPA welfare sops, but the Bhagwati lobby fights back - The New Indian Express

Sen's clout shows in UPA welfare sops, but the Bhagwati lobby fights back

Published: 01st Sep 2013 08:44:18 AM

The  Direct Benefit Transfer (DBT) scheme, aimed at providing subsidies to BPL families directly without involving middlemen, has led to friction between various ministries. The difference of opinion between two top Indian economists—Amartya Sen and Jagdish Bhagwati—has led to an open war between the PMO, Planning Commission and Finance Ministry on one side and the ministries of Rural Development, Social Justice and Empowerment, Health and Family Welfare on the other.

“But of late, with Sonia Gandhi’s National Advisory Council (NAC) gaining clout, Sen’s rights-based approach is reflected more in government as MGNREGA and the Food Security Bill show,’’ he said.

The social sector ministries, headed by Sonia acolytes Jairam Ramesh, Selja Kumari and Ghulam Nabi Azad want the funds to be routed through the states. The PM and Planning Commission headed by Montek Singh Ahluwalia disagree, wanting the money to be given directly by the Centre bypassing the states.

Their stand is that Delhi should be the custodian of the funds to avoid leakages and ensure accountability. They also argue that state governments—15 of them are non-Congress—would take the credit if it is they who distribute the big bucks. The social sector ministries, on the other hand, want the funds transfer along the lines of MGNREGA—as advocated by Sen. Incidentally, the Nobel winner’s long-time collaborator is Jean Dreze, a former member of the NAC, who had played a crucial role in shaping MGNREGA. The ministries also argue that the target population of the UPA schemes lead a hand-to-mouth existence and that any delay in transferring funds could plunge them into greater poverty, thus undoing the very intention of the scheme. This is one of Sen’s major grouses.

“There was a meeting of all the ministries concerned earlier this month to sort out the differences. But they could not arrive at a decision as there was a clear rift on the mode of fund transfer,’’ said an official with the Ministry of Rural Development.

To end the stalemate, the PMO has convened the meeting of the Executive Committee on Direct Cash Transfers in the second week of September. Pulok Chatterjee, Principal Secretary to Prime Minister, will chair it; the secretaries of the ministries concerned, the DG UIDAI and the Secretary, Planning Commission, will attend. According to the official, the Planning Commission has already held discussions with District Collectors on the issue.

The Government’s plan is to cover all states by April 2014, just before the next Lok Sabha elections. The scheme has already been initiated by linking LPG distribution to DBT in 20 districts. The Cabinet Committee on Economic Affairs (CCEA) had recently decided to extend the scheme to 269 districts. Officials of the social sector ministries are closely in touch with Sen and his loyalist economists in matters related to policy matters. While the Food Bill was being conceived, the officials in charge had sought his suggestions on several occasions to make it more “people friendly”. “The Food Bill is clearly influenced by Sen’s right based theories,’’ said an official who was involved in drafting the Bill.

It is not a sheer coincidence that Bhagwati had been steadfastly opposing the Food Security Bill, saying it is “going to fuel inflation”.

The two economists had been sparring in public on Indian economy issues on what should the priority should be—growth or redistribution. Bhagwati had stated that “Sen puts the cart before the horse; and the cart is a dilapidated jalopy!’’ The Cambridge connection does not seem to have worked; Sen was also a student at the prestigious university along with Manmohan Singh, but they did not share a rapport. All three economists, Sen, Bhagwati and Manmohan, have won the Adam Smith prize in different years.


Also read:

Welfare policy cracks UPA


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