Cutting out the middleman

The bigger change in Chhattisgarh was to change the role of the middlemen who take food from government warehouses, transport it to villages and sell it. In Uttar Pradesh, such middlemen are private dealers. Partly because they are not paid properly for their work, they use the system to make money for themselves and are the main source of corruption, which they get away with it thanks to political contacts. There is no evidence that the shopkeeper in Maheshpur, Radhe Shan Singh, is himself corrupt but his background is typical. He has run the local PDS for nearly a quarter of a century and got the job thanks to a political connection. There was a disputed election for the village council in 1990 and a member of his Rajput caste became head of the council, or sarpanch. He got the job of running the PDS, a bank loan to finance start-up costs—and has not looked back. Most houses in the village have a couple of bare light bulbs. His is lit up like a Christmas tree and sports a satellite dish. Four buffaloes graze placidly outside his house, next to a rank of his new motorcycles. He admits that 40% of the food allocated to APL cardholders never reaches his shop. Malnutrition in the area persists, says Lenin Raghuvanshi of a non-governmental organisation in eastern Uttar Pradesh. Gulshan says his family goes to bed hungry. His house has just three rooms, each the size of a walk-in wardrobes; his family possessions are strung from the ceiling in a hammock to protect them from floods and rats. Eleven people live there.

In Kailashpur, Radhe Shan Singh’s opposite number, Chinta Mani Singh, is also from an upper caste. But he is not a private dealer. In the mid 2000s, the Chhattisgarh government un-privatised the distribution bit of the Public Distribution System and handed over the shops to local institutions or self-help groups. It also started paying them properly, so it became possible to make a living legally. The main aim was political: to win votes in the villages by improving social safety nets. This provoked a fierce fight that went all the way to the Supreme Court in Delhi as dealers sought to protect their lucrative businesses. But they lost. Now, in Chhattisgarh, as in several other states, food is delivered from government warehouses by separate contractors (in bright blue trucks), and the shop is run by the village council. It seems to be working. According to Mrs Kheera’s survey, 97% of respondents in Chhattisgarh say they normally get their full entitlement of food, compared with 77% in Uttar Pradesh. A spot check of a few shops showed that the shop records and ration-card entries matched in 94% of cases in Chhattisgarh—but only half the time in Uttar Pradesh.

Though Kailashpur has none of the obvious attributes of wealth—it has no rural industry or large shops, for instance—its people seem better fed and better housed than in Maheshpur. Mr Drè ze reckons that, in the states as a whole, the PDS has reduced the number of people below the poverty line by 15% in Uttar Pradesh but by 40% in Chhattisgarh. “There have been two improvements in the past five years, ” says Mr Singh. “The government has improved in the sense that it gives more attention to programmes like the PDS. And the people have improved in the sense that they have more education and have become very demanding. Sometimes we can barely keep up.”