Scrap ‘Cash for Kerosene’ scheme, demand activists

December 14, 2012 12:00 am | Updated 04:57 am IST - NEW DELHI:

The pilot project at Kotkasim, Rajasthan has revealed loopholes, they say

Sampat Rai is a resident of the Kotkasim block of Rajasthan’s Alwar district, where the Cash for Kerosene Scheme (CFKS), an experiment with cash payment of kerosene subsidies, was launched last year on a pilot basis. Mr. Rai is lucky as, unlike other residents of the area, he has a bank account where the kerosene subsidies are supposed to be transferred after he buys kerosene from the market at the market price. But receiving Rs. 90 over the year has increasingly become an expensive affair for the octogenarian as his son has to forego a day’s wage to accompany him to the nearest bank, which is 6 km away from their house. Mr. Rai, while describing in detail the “loopholes” of the CFKS scheme, said: “It takes me the whole day to collect money from the bank with my son, who has to sacrifice his one day’s wage for this purpose. My practical experience shows that it is simply not worth it.”

He was joined by several other residents of Kotkasim, activists and development economists, such as Jean Dreze and Ritika Khera, at the Jantar Mantar here on Thursday, who argued that the experiment of direct cash transfer of kerosene subsidy in the area had led to a virtual paralysis of the kerosene distribution system in the block.

“The Kotkasim experiment has been projected as a success and a model for the whole country on the basis of the dramatic reduction in kerosene offtake and therefore in the kerosene subsidy. Field studies in the area however suggests that the subsidy has been reduced but at the cost of driving most people out of the subsidy system,” said Ms. Khera, while demanding that the scheme be scrapped.

Ms. Khera said that in Kotkasim the poor households seemed to be the worst hit by the project as the subsidies were not paid in time. “The payment of subsidies is very erratic and untimely. Many households are yet to receive any subsidy, despite shelling out Rs. 500 to open a supposedly zero-balance account. Because of this erratic pattern several households have curtailed their kerosene purchase, which cannot be termed a ‘success’ by any standard,” she added, while highlighting how the dealers at Kotkasim were forced to buy kerosene at a loss to show the scheme a “success.” Sanno Devi, a Delhi resident, advised the government to fix the existing system before expanding the scheme throughout the country. Her father had not got his pension since last one year. It took an RTI and several rounds of visit to several offices before the pension amount was deposited in her father’s account. “At any cost we do not want the cash transfer to cover the public distribution system,” she said.

The activists protesting against the scheme argued that it could play havoc with the public distribution system (PDS). They demanded that the PDS should at no cost be replaced with cash.

Demanding an immediate enactment of a comprehensive National Food Security Act, People’s Union for Civil Liberties activist Kavita Shrivastava said: “Instead of diverting public attention with false promises of cash transfer before the 2014 general elections, the government should redeem its promise to enact the food security Bill.”

Welcoming cash transfers in pension, she demanded that the government increase the amount and universalise it. She also rejected the idea of the UID as the basis requirement of these schemes.

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