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Going round in circles

Prime Minister Narendra Modi, on December 25, Good Governance Day, while directly transferring ₹18,000 crore to the accounts of nine crore farmers with the simple click of a button, recalled the aphorism immortalised by the former Prime Minister Rajiv Gandhi: “Only 15 paise of every rupee meant for welfare of the downtrodden reaches them.”

It took me back in time when I was witness to the horrendous reality of what the late Rajiv Gandhi had observed with genuine anguish. As the then Development Commissioner for Handlooms, I was responsible for implementing certain schemes for the benefit of handloom weavers in India. One of them was the late lamented Janata Cloth Scheme.

The Centrally sponsored scheme was launched in 1976 with the twin objectives of providing sustained employment to unemployed and under-employed handloom weavers and at the same time, making available cloth at affordable prices to those below the poverty line. Certain weaver organisations (largely cooperatives) were given the responsibility to get the identified range of products of fair average quality produced at the prescribed rate for procurement (somewhat akin to the minimum support price, or MSP, for crops). The cloth so acquired was sold by the procuring agencies at a subsidised rate to the targeted consumers. The difference between the procurement and sale prices was made good to the organisations responsible for the implementation of the schemes by the government. It took off in no time; originally, the mill sector was also given some targets for the purpose, but, in due course, it became the sole preserve of the handloom sector. The unpleasant side-effects of the scheme were visible soon enough.

First came the purists. They were aghast at seeing the potential artists taking to production of run-of-the-mill cloth because of the guaranteed procurement. Then the bureaucracy moved in to bare its fangs. It used to happen something like this. The weaver would produce the cloth; and there was a large range to pick up from, with regional variations, spanning dhoti, sari, lungi, long cloth and shoddy (pun unintended) blankets, et al. When he brought his product for delivery to the implementing agency, it would occasionally get rejected on flimsy grounds. When he came out of the office, with literally nowhere to go since there was no market for it outside even at cost price, the sharks would be waiting. The weaver sold it at whatever price the middleman paid rather than lug it all the way back home. Thus, he was poorer because of the scheme. He did not get even 15 paise out of the government’s one rupee; he actually lost 15 paise or more in pursuit of the elusive one rupee. Often, the middleman would sell the same product to the procuring agency in some fake weaver’s name, splitting the benefit. I made out a case for discontinuance of the scheme. It took some time to materialise because of the vested interests involved.

Committee report

In 1994, the Public Accounts Committee of Parliament, in its report on the Scheme had this to say: “In this report the Committee have found several shortcomings in the implementation of Janata Cloth Scheme…decline in employment in some States…unsatisfactory distribution system resulting in Janata Cloth not reaching the targeted population… inadequate quality control…absence of proper system of scrutinising subsidy payment…underpayment of wages, sale through unapproved agencies…(A) decision has been taken to phase out the Janata Cloth Scheme during the Eighth Five Year Plan…”

But while it lasted, the scheme was very popular with many of the actors involved, including NTR, who, as Andhra Pradesh Chief Minister and in charge of the Handlooms portfolio, took keen interest in designing the saris, beyond the cost ceiling prescribed by the Union government, at the cost of the State government.

The Prime Minister’s invocation also reminded me of the case of a hapless artisan, who was sanctioned a loan under the interest subvention scheme of the Development Commissioner for Handicrafts to buy a new musical instrument for his professional use. By the time the loan amount was physically disbursed to him, it had been reduced to less than half and was, therefore, not of any use for the purpose. He happily converted it into a “consumption” loan unbeknownst to the disbursing authority.

As the poet has said, “The old order changeth, yielding place to new ... lest one good custom should corrupt the world.”

(The writer is a former Secretary-General of the Rajya Sabha)

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Printable version | Mar 6, 2021 7:34:16 AM |

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