The Telangana Chief Minister K Chandrashekhar Rao has initiated a bold, innovative and pioneering agenda for the people living at the bottom of the economic and social pyramid for centuries. The Dalit Bandhu Scheme (DBS) has caught national attention with other States keen to study and explore adoption.
The DBS is a direct financial front-loaded scheme to meet basic needs, decent living, enhance incomes and assets and benefit from mainstream economic growth. It is delinked from banking and institutional convergence bottlenecks.
It has potential for a cascading impact on the mainstream with higher GDP, accelerated economic growth and revenue generation, and demand for goods and services for basic needs, and ensures growth in incomes through productivity, value addition, business and new enterprises.
The DBS is unique. Unlike other top-down welfare schemes, the beneficiary decides based on her/his priorities and capabilities about the utilisation. The government is a resource provider. Being a bottom-driven scheme, to succeed, the government must resist controls or direct them to shopping lists or schemes on how the money must be used along with its timeframe. The state has the finances and can augment institutional capacity for saturation roll-out to reach all Dalits in a short time.
We must be creative to provide multiple options on the effective use of the money as felt right by the beneficiary household. The DBS can deliver one or a combination (supplement and complement) tailored to specific household needs and requirements.
One must invest less in overcrowded small-sized with low market growth potential (kirana or chicken shops) unless it offers customer convenience and viable business. The scheme must focus and extend to harvest gains by competing in growing mainstream economy businesses with high returns on investments and lower risks. They must understand business ecosystems, negotiate, network, and customer interface with strategies to insulate or address obstacles in growth, competition, business development, financial leverage and customer acquisition.
To generate markets and tackle startup bottlenecks, the government and public sectors must procure a percentage of their supplies compulsorily from the DBS-promoted businesses. For some period, offer a higher percentage in the price value or until their business is viably established.
For instance, the beneficiary can own solar power generating sets that are connected to the grid to sell clean energy. Telangana will invest Rs 200 crore to foster oil palm cultivation. This opens huge opportunities in sectors like tissue culture seedlings, root zone moisture-based irrigation, mechanised sprayers, plant growth and yield hormones, fungicides and pesticides, harvesters, bulk building, value addition, and marketing, etc. This will trigger a process wherein beneficiaries learn the key elements of a successful business to extend to new growth areas.
The key is households, and Dalit communities decide, drive and develop the scheme. This is augmented with “on-demand need-based” assistance, call centres, guidance, internship, mentoring and handholding by experts in the government and civil society. We can identify, develop, monitor and support a wide rostrum of capable and committed institutions/individuals to assist beneficiaries with options, choices and to mobilise to plan, manage and control their destinies.
To ensure the availability of resources and institutional autonomy, we must have a social stock exchange with multiple public assets. They are land, highways, mines, minerals, spectrum, water, and public sector undertakings, etc. These assets are held and monetised by the stock exchange and plan cash flow requirements.
It manages a stock portfolio, offers collateral rather than cash, and dividends. A study by the Centre for Budget and Governance Accountability places our natural resources asset at Rs 40 lakh per capita. Thus national and natural resource assets are in the hands of citizens, not exploited and abused.
Synergising with Industry
The Centre for Dalit Studies can serve as DBS focal point. Others can support. We must tap Central government schemes of the Direct Benefit Transfer for small and medium businesses, as well as the Trade Guarantee Scheme. The government can guide to synergise with industry as in due course beneficiaries will seek growth with an appetite to realise the gains to move up the value chain.
Sceptics argue such a bonanza will lead to wasteful expenditure or celebration with liquor. In DBS, the money goes into the account of the women who have shown the capability to plan and utilise the money well.
Two decades ago, Telangana had a severe drought and reported starvation deaths. At that time, the FCI was sitting with overflowing stocks. To address hunger, I urged the government to loan rice albeit at prices higher than the PDS or FCI sales to exporters and agro-food businesses. It was called Rice Credit Line (RCL) wherein 50 kg of rice was assured to each household in the first week of every month. We routed the commodity through PDS dealers with accounting and the repayment was entrusted to women self-help groups. A hundred thousand tonnes of rice reached the poor with the entire amount repaid to the government by women groups. Trust is crucial.
The RCL pilot is detailed in a monograph published by International Social Institute, The Hague in the Netherlands, and acclaimed by the World Bank as efficient to promote and energise self-help poor women groups. The key learning: Trust the poor and let them gain the confidence of assured, autonomous and timely provision, and let them lead, drive and deliver the success of DBS by shaping their dreams and addressing pain points. #KhabarLive #hydnews