Prelims Perspective: Problems in PDS and reasons for slow growth
Mains Perspective: Highlight the Issues by providing the examples related to PDS.
Facts about the slow growth of economy:
Index of industrial production (IIP) declining successively in September and August,Which may lead to Serious concerns about jobs and incomes in the manufacturing sector.
Construction has failed to recover too. Even service sector growth is a slowdown story once government expenditure is taken out.
Exports are declining and there is a sign of rise in inflation driven by food inflation.
Rural economy needs a stimulus if demand has to improve in the economy.
Consumption expenditure declined by almost 10% in rural areas, where most of the schemes were implemented.
Reports of the National Statistics Office (NSO) suggest that the problem may lie in a broken delivery system and exaggerated claims of transfers by the government.
A recent report by the Comptroller and Auditor General (CAG) has not only flagged a decline in consumption of LPG cylinder refills under the Ujjwala scheme, but also highlighted cases of the delivery of cylinders to minors and unidentified beneficiaries.
For example, 1.4 million beneficiary families consumed anywhere between 3 and 41 cylinders each in a month, which is difficult to believe, given that most of them are poor.
Data from the NSO:
As against the claim of several states being classified as “open-defecation free”, the surveys show the proportion of our population with toilets and access to these at much lower levels than the figures claimed by the government.
The largest scheme, of transferring cash to farmers as part of the Pradhan Mantri Kisan Samman Nidhi Yojana, has also run into trouble, with only 76.2 million people having received the money until 30 November 2019. Of these, only 31.2 million farmers have received all three instalments, as against a target of 140 million farmers.
National Rural Employment Guarantee Scheme (NREGS) is already suffering from delayed wage payments and non-availability of work. With NREGS wages almost half the market rate, the scheme has lost its ability to play the role of demand multiplier.
There is now an urgent need to revive the rural economy. Public-expenditure-led interventions could have provided the necessary stimulus to raise demand in the rural economy.
Fixing that delivery mechanism should be as big a priority as the need for increased spending through a rural stimulus package.