Shortcomings of Administrative Identifi cation

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Despite introduction in 1997, surveys for the identifi cation of poor families

were not completed in 18 out of 31 states by 2000 (CAG, 2000). Even in

states where identifi cation was completed, identifi cation cards were not

provided to a signifi cant number of poor families. Thus implementation

of the exercise has been slow and ineffi cient.8

A major criticism of the targeting is also that it has wrongly excluded a

large number of eligible families. There are several reasons for this, both

conceptual and operational. Conceptually, the main issue has been the

appropriateness of income poverty to defi ne the poor, specifi cally the

absolute poverty line used by the Planning Commission. It is argued that

the offi cial poverty line represents too low a level of absolute expenditure,

which may exclude large sections of the population who experience low and

variable incomes. If other criteria are used, such as nutrition, the number

of households that can be deemed poor is much higher than ceiling fi gures

estimated by the Planning Commission in 1993–94, (GOI, 2003). 9

Operationally, as noted above, identification surveys have not been

completed in 18 of 31 states and, across the country, 18 per cent of families

identifi ed as poor do not have identifi cation cards. Even where surveys have

been conducted, there still remain concerns on accuracy given the diffi culties

of measuring income. Since there are no regular offi cial estimates of actual

household incomes, implementation of administrative identifi cation is

subject to substantial practical and administrative problems. For example,

an evaluation of the Targeted PDS in Uttar Pradesh – one of the poorest

states in India – by the World Bank based on the Uttar Pradesh-Bihar

Survey of Living Conditions (1997–98) found that 56 per cent of households

in the lowest income quintile did not get identifi cation cards. In the next

quintile, 63 per cent of the households were without cards.

The actual income equivalent of the benefi ts received under the Targeted

PDS has been found to be very modest. According to the review of CAG

(2000), average income transferred per household per month to the belowpoverty-

line population was between Rs 22 and Rs 46 across different states.

In Punjab, it was less than Rs 7. However, the government incurs substantial

costs to achieve these unimpressive transfers. These costs include, aside from

subsidizing the sale price of grains, the costs of transportation and storage

and, even more signifi cant, the minimum support prices paid to farmers

(which are signifi cantly higher than market prices). The total subsidy cost

for the PDS system was Rs 410.8 billion during 1992–99, according to

CAG (2000). The estimated cost of transferring 1 rupee of income to poor

households under the Targeted PDS was put as high as Rs 6.68 (Dev and

Evenson, 2003).

Hence the administrative identifi cation exercise to classify all households

into those above and below the poverty line has been implemented with

several shortcomings. Its progress has been slow and ineffi cient, and the

results are not always reliable. However, the classifi cation based on this

exercise is used by a majority of the schemes in operation today that are

targeting poor households.