Within a day of taking over as the chief minister of Tamil Nadu, J. Jayalalithaa has begun a rain of sops. In one of her first acts, she’s ordered distribution of free rice for poor and below poverty line families.
Apart from the fact that this step will prove to be financially ruinous, it will also make it difficult for other governments to resist populist measures.
It will also lead to the diversion of rice from the public distribution system (PDS) to the open market. The absence of any price differential between open market and PDS prices is certain to fuel large-scale leakages of food meant for the poor.
The chief minister has said that to fulfil her poll promises, a special programmes implementation department will be created. Such measures are quite irrelevant as perverse incentives have a life of their own and no level of oversight can arrest them.