CONCLUSIONS

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Poverty targeting in India has achieved some modest success but in general the

picture is highly disappointing with very considerable evidence, principally

from offi cial ‘grey cover’ reports, of high leakage and misappropriation.

Problems of implementation, whether at the center, the state or the

district level are clearly evident. At the highest political level successive

governments have failed to take responsibility for streamlining the system

of CSS, presumably because it is not a genuine political priority and because

they fear challenging the local vested interests that have built up behind

the present ineffi cient system. The multiplicity of schemes, and their sheer

numbers, contributes to the problem of poor governance. Each scheme,

with its own paperwork and bureaucratic requirements, adds to the load

on the point of convergence – the district-level administration – which is

part of implementation irrespective of whether funds are transferred via

state governments or directly from the center.

The delegation of implementation of CSS to officials at the local

government level and the local village or community institutions in principle

should lead to greater ownership of the programs, but in practice has often

contributed to the problem of corruption and weak governance. Inadequate

institutional capabilities of lower tiers of government and inequities in

power within villages allow capture by local elites and the corruption

of government offi cials. Decentralization, an appealing solution at the

conceptual level to improving delivery on the ground, has faced severe

problems at the level of actual implementation.

The central problem that emerges clearly from the evaluation studies on

these programs is that of poor governance. Gross violations of prescribed

norms and guidelines of implementation are common, resulting in use of

intermediaries, falsifi cation of records, and provision of false information.

Targeting programs with a large component of individual subsidy or large

income transfers attract the attention of corrupt offi cials and the local

elite. Substantial proportions of funds in such schemes are extracted from

benefi ciaries through illegal means (bribes and other special levies), aside

from manipulating the benefi ts towards those not eligible. The effect in both

cases would be to increase leakage, diverting resources to those not intended

for coverage under the schemes. However, problems of corruption and poor

governance are not confi ned to the targeting programs alone, but also affect

more broadly large segments of government expenditures.

There have also been technical diffi culties in the operation of many

schemes. The key means of identifying the poor has relied on the system

of administrative identifi cation, designed initially to provide food security

through the public distribution program. Secondary targeting – using

indicators such as social category, gender or geographical location – is used,

but in conjunction with administrative identifi cation. For the requirements of

the targeted public distribution system, the government sought to implement

administrative identifi cation by dividing the population into those above

and below the poverty line. However, this exercise has been implemented

poorly, leading to ineligible families being included as poor and families

actually below the poverty line being excluded. Given the immense poverty

in the country, with almost 80 per cent of the population living at below

US $2 per day and a comparable proportion malnourished, attempts to

overcome information asymmetries by directly ‘tagging’ families as below

the poverty line, have faced conceptual and operational problems, resulting

in errors of both undercoverage and leakage.

Food-for-work schemes have used targeting based on self-selection, which

in principle should lead to the absence of either type of targeting errors.

However, there is ample evidence that such schemes have also been misused.

The choice of assets in self-employment schemes has tended to be poor,

leading to dissipation of the assets acquired. This often refl ects the poor

literacy and human capital level of the benefi ciaries, but the problem is

compounded by the absence of supporting services (technical, marketing

and business support) to the recipients.

The life of community assets developed through schemes depends

critically on the social mobilization and community ownership of the

assets. Technical departments of the government are typically ill-equipped

to provide support in this area, nor do they have incentives for doing so.

Some benefi ts for the poor have been achieved and some forms of scheme

have had more success at minimizing targeting errors. More modest schemes

with small regular payments to recipients have tended not to be worth the

effort of funds diversion and hence show only very low leakage. There have

been welcome initiatives in involving community and self-help groups and

NGOs. Schemes where disbursal of benefi ts and scheme-related decisions

are undertaken in public show fewer opportunities for corruption. Some

NGOs may be better placed than government departments to provide

the support needed by poor households in building up assets through

employment creation schemes. There is some evidence that involvement

of NGOs in targeting programs has been accompanied by relatively better

implementation (although screening of NGOs is also critical). Also the

operationalizing of self-help initiatives can be complex.

In short, as yet greater efforts at transparency and accountability have

not materialized in parallel with the attempts at devolving powers to lower

tiers of government. The combination of low literacy and human capital

amongst the poorest of the poor, inequitable power structures within many

rural areas, and lack of transparency, allow greater room for corruption

to fl ourish amongst offi cials and the local elite. Greater involvement of

benefi ciary communities and community-based organizations such as

NGOs should be attempted at each stage of implementation as part of

program design. Shining a torch in areas darkened by lack of transparency

will assist in curbing malpractice and corruption. The way forward is not

easy, but for India a considerable amount is now known on the problems

faced by poverty-targeting initiatives.