“I think it is a great effort, we are learning a lot from India”

Even as India’s Direct Benefit Transfer (DBT) is yet to be fully implemented under its second phase, the government’s flagship programme on distribution of entitlements to the poor came in for praise by the Asian Development Bank (ADB).

At a media conference on Saturday on the sidelines of the ADB’s ongoing annual meeting at Greater Noida near here, its Chief Economist Changyong Rhee said the DBT scheme was worth emulation and the Bank would advise other developing countries to implement it to check corruption and prevent subsidy leakages.

“I think it is a great effort. We are learning a lot from India. You are now building a bio-information [system] and then you are providing direct subsidy without any intermediary. That would significantly reduce corruption and inefficiencies…We at ADB will really push this idea to other developing countries as a way to enhance public finance and as a way to enhance transparency.”

The press interaction with Mr. Rhee was organised to mark the launch of ADB’s new study which revealed that public services in Asian developing countries are frequently failing to reach the needy and, therefore, recommended improvements to avoid a further widening of the region’s already sharp divide between rich and poor.

The report titled, ‘Empowerment and public service delivery in developing Asia and the Pacific,’ while stating that the delivery and quality of public services have lagged the meteoric growth rates seen in many economies in the region, also examines the challenges state providers face in delivering quality basic services to low income groups and the potential for giving disadvantaged communities more power over service delivery.

Mr. Rhee pointed out that although public service delivery in the Asian region improved remarkably in the last 30-40 years on account of rapid growth, the slowdown might have a negative impact on the system which called for better targeting of subsidies. Pointing out that the leakages in India’s existing public distribution system (PDS) were enormous, he said: “Countries need to shift from general targeting to focused targeting approach as lion's share of the subsidies are taken away by the rich.”

According to the report, turning the present situation around would require state institutions to be far more responsive to demands for services and be much more focused on targeting support to those genuinely in need. “Creative solutions must be explored, such as contracting out the delivery of some public services to private parties and non-government organisations, broader adoption of new communications technologies, and a possible shift to a cash-based social assistance transfer system,” it said.

Lauding the government’s initiatives in this regard, the report noted that barring India which “became the exception” with the passage of the Right to Information Act in 2005, few countries in the Asian region have enshrined the right of citizens to information on basic services.

With reference ‘Aadhaar’ which forms the basis of the DBT scheme — the largest project of its kind in the world — the report said that India is carrying out an information and communications technology project which will eventually provide unique identification numbers to all citizens in a bid to deliver welfare benefits more effectively.