The Bengal ‘cut money’ issue goes beyond politics

India’s welfare delivery system has improved. But, as the corruption controversy in Bengal shows, it’s not foolproof.

The ruling Trinamool Congress (TMC) in West Bengal is facing a peculiar challenge in the state: the “cut money” controversy. “Cut money” is an illegal commission that TMC workers have been charging from people who want to avail the benefits of State-run welfare schemes. According to reports, there were “fixed rates” for specific programmes, ranging between Rs 200 to Rs 25,000. Such demands by TMC workers have led to protests and clashes; the latest one took place on Tuesday in North 24 Parganas where a local TMC leader’s house was attacked after “cut money” allegations surfaced against him. With the Bharatiya Janata Party (BJP) making deep inroads into the state (evident from the Lok Sabha results) and civic polls due in 2020 and assembly elections in 2021, chief minister Mamata Banerjee is obviously keen to quickly douse the flames of discontent. Last month, she directed party workers to return the commissions to the beneficiaries.

The “cut money” controversy, however, is not just a political issue. It shows that despite improvements in the infrastructure of service delivery, many citizens, especially the poor, still face a challenge when it comes to interacting with the State for acquiring basic and necessary services. This leaves them at the mercy of local officials and political agents.

There are two kinds of corruption when it comes to welfare funds and development projects, a former Indian Administrative Officer told me recently. First, when contractors participate in the tendering process for government projects, unscrupulous bureaucrats/local politicians ask them to add a certain amount of money to their cost. So it really doesn’t matter who wins the state-mandated process — the cut money is always secure. In this way, the official process is not subverted, only tweaked to benefit a few.

When it comes to welfare, wrong identification of beneficiaries (people close to the party in power) or adding fictitious beneficiaries to the list is the modus operandi; the Bengal episode is a creative addition to the second one.

The impact of such malpractices goes far beyond monetary loss to the beneficiaries — it hurts the nation’s economic well-being and growth. In her paper, Governance and Public Service Delivery in India, economist Farzana Afridi of International Growth Centre (IGC), Delhi, writes that public theft raises the fiscal burden on the government, inflating the costs of programmes, and the behaviour of public officials to hide the graft can reduce the efficiency of the programme.

The obvious question then is: how to erase corruption so that people can reap the full benefit of the welfare programmes?

First, information is critical: The users of public services, or the electorate, are often not well-informed about public services. This, writes Afridi, increases their vulnerability to being manipulated by politicians and bureaucrats, through clientelistic transfers, demands for bribes, vote-buying and intimidation. So there is an urgent need to mobilise, educate and have a better informed citizenry.

Second, make public policies less confusing: “Most public policy programmes work best when they follow KISS (keep it simple, stupid) principle,” says economist Reetika Khera. Too many conditionalities and graded tiers confuse people, forcing them to seek the help of these corrupt agents.

Third, expand the coverage of public schemes: Instead of keeping welfare restricted to certain groups, make universal entitlement the norm. For example, the Chhattisgarh government’s decision to expand the PDS coverage (under Raman Singh) led to a near foolproof delivery.

Fourth, strengthen the capacity of local governments: The IGC research suggests that robust training of public officials could help ensure effective and transparent implementation of public programmes, especially in reserved constituencies.

Fifth, put in place good grievance redressal mechanisms: This should be strong enough to respond to the complaints impartially, and in a time-bound manner. It is critical because even rumours of corruption, if not nipped in the bud, can discredit a programme, as well as the morale of citizens.

And, sixth, leverage technology: It has its own set of problems, yet reducing human interface to the maximum extent possible could mitigate corruption to a large extent.