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Business News/ Politics / Policy/  Govt bites the bullet on subsidies, to use SECC data that excludes 40% households
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Govt bites the bullet on subsidies, to use SECC data that excludes 40% households

All future allocations to poverty alleviation schemes will be based on Socio Economic and Caste Census findings

According to the SECC, 56% of rural households do not own land and over 51% depend on manual labour as their primary source of income. Photo: ReutersPremium
According to the SECC, 56% of rural households do not own land and over 51% depend on manual labour as their primary source of income. Photo: Reuters

New Delhi: The National Democratic Alliance (NDA) government on Friday signalled a radical regime change in its spending on entitlements.

The government released provisional data from the first Socio Economic and Caste Census (SECC) in seven decades and declared that it will form the basis for all future allocations under poverty alleviation programmes funded by the rural development ministry.

SECC has evolved exclusion criteria based on which it has found that a little under 40% of rural households will not be eligible for entitlements provided by the Union government.

And for the remainder of the population, it has evolved a deprivation matrix which allows the government to target their specific needs—education, skills, housing, employment, health, nutrition, drinking water, sanitation, social and gender mobilization—to alleviate poverty.

The allocations will be seeded with the National Population Register (NPR) Temporary Identification Number (TIN), allowing authorities to monitor the progress of households over the years.

In the process, the Bharatiya Janata Party-led NDA has not only implicitly signalled an end to the open-ended nature of entitlement spending, but shrunk the list of beneficiaries by excluding over a third of the households.

“It is very sad that about 40% of the population are people in the excluded category. This number, I think, is too high and I fear a large number of poor people have been missed out," said N.C. Saxena, a former rural development secretary.

“States have their own list for targeted subsidies and they may not like it to be changed by the Centre. This could lead to a Centre-state conflict," he warned.

By tagging the allocations to NPR TIN, the government would create a management information system to track the impact of its welfare programmes on poverty alleviation.

At the same time, it has accepted that poverty is not uni-dimensional; it cannot simply be defined on the basis of income or consumption, but can be the result of factors like lack of literacy, nutrition, sanitation and gender bias.

This is consistent with the overall NDA strategy, which is premised on the belief that a one-size-fits-all approach has to be abandoned and spending programmes have to be customized.

“We don’t have much of a choice but use the data to better target subsidies," said Pronab Sen, country director of the UK-based International Growth Centre, which works for sustainable growth in developing economies.

“But one concern is that the data was collected in 2012 and we are already three years late. How much change would have taken place by this time we don’t know...also, seeding of Aadhaar numbers with the targeted households will not be easy as you need to go back to these households to collect their Aadhaar numbers—this process should have happened at the time of (SECC) data collection," added Sen.

According to finance minister Arun Jaitley, who released the census findings along with rural development minister Chaudhary Birender Singh, the data will help government and policy planners identify households that need targeted help.

“...this document will form a basis of helping us target groups for support in terms of policy planning," said Jaitley.

The census—the first of its kind since 1932—had 14 parameters to keep households in the excluded category. The exclusion criteria include ownership of motorized vehicles, kisan credit card with credit limit of over 50,000, households with members employed by the government and any household with one member earning above 10,000 a month.

According to the census, 56% of rural households do not own land, and for over 51%, manual labour is the primary source of income. Thirty per cent of these rural households depend on cultivation as the primary source of income, and only 9.68% have salaried jobs, according to the survey.

Only 4.58% of these rural households pay income or professional taxes, the survey found.

On asset ownership, the survey shows that over 68% of rural households own a mobile phone, 20.7% own a motorized vehicle and over 11% own a refrigerator.

However, about 32% of rural families live in single-room houses and 44.5% live in mud and thatch houses.

The rural development ministry started the mammoth exercise in June 2011 through a doorstep enumeration. This was the first time such an exercise was carried out for both rural and urban India. It discloses information on a large number of social and economic indicators relating to households across the country.

These include details relating to occupation, education, disability, religion, caste status, name of caste or tribe, income and employment characteristics, main source of income, possession of assets, dwelling types, consumer durables and non-durables, and land ownership.

India is home to 179 million rural households, but almost 40% of these fall under the so-called excluded category, which means they may not be considered for government doles. This may lead to a political backlash and strong opposition from states that will want to maintain or include more households in the subsidies net.

“We have not gone through the details of the census yet, but in a federal system, the state has the powers to decide its beneficiaries. The Prime Minister keeps talking about giving more powers to the state, but it is not happening. This move infringes upon the power of the states, which get elected through a people’s mandate, to decide who should be a beneficiary for welfare schemes," said Sanjay Jha, a senior leader of the ruling Janata Dal (United) in Bihar.

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Updated: 03 Jul 2015, 11:25 PM IST
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