The COVID-19 pandemic and resulting lockdown disrupted the lives and livelihoods of the migrant workforce, which represents 38% of India’s total population. As a part of a series of relief measures under the Pradhan Mantri Garib Kalyan Yojana, the Government of India provided employment opportunities to the distressed rural households through Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
However, the surge in demand for work, payment delays, and issues in the program design posed challenges to its efficacy. MSC’s paper assesses the program’s success in tackling the loss of income and livelihood and lists key challenges India faced in addressing the crisis.
The COVID-19 pandemic and resulting lockdown to curb put the lives and livelihoods of the migrant workforce, which represents 38% of India’s total population, in jeopardy. As a part of a series of relief measures under Pradhan Mantri Garib Kalyan Yojana, the government of India provided employment opportunities to the distressed rural households through Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
However, the surge in demand for work, payment delays, and issues in the program design posed challenges to its efficacy. MSC’s paper assess the success of the program in tackling the loss of income and livelihood and lists key challenges India faced in addressing the crisis.
The Government of India (GoI) ensures the food security of its population through the distribution of food grains to vulnerable sections at highly subsidized prices every month under the National Food Security Act (NFSA). In the wake of the COVID-19 pandemic, the government announced to distribute free food grains to around 800 million NFSA beneficiaries for eight months. The distribution of free food grains was a massive exercise carried out efficiently by the GoI. Timely delivery of benefits supported many households to survive through the testing times and safeguard their food and nutritional security
The Government of India (GoI) ensures the food security of its population through the distribution of food grains to vulnerable sections at highly subsidized prices every month under the National Food Security Act (NFSA). In the wake of the COVID-19 pandemic, the government announced to distribute free food grains to around 800 million NFSA beneficiaries for eight months. The distribution of free food grains was a massive exercise carried out efficiently by the GoI. Timely delivery of benefits supported many households to survive through the testing times and safeguard their food and nutritional security.
A webinar on “Financing agribusinesses amid COVID-19”
The webinar featured conversations with representatives from both the demand and supply sides who revealed the situation on the ground. Participants explored the challenges that MSMEs in the agriculture sector grapple with as they seek finance during the pandemic. After this, a panel of experts brainstormed how governments, donors, and financial service providers can support these entrepreneurs to build back better.
The key themes for discussion were:
Tuning into voices from the ground to gauge the impact of COVID-19 on MSMEs, women, and youth—to enable agriculture finance stakeholders to place theory into action;
Innovation, coping mechanisms, and case studies of agriculture finance;
Challenges that MSMEs in the agriculture sector grapple with as they seek finance during the pandemic;
The role of key stakeholders, such as governments, donors, and financial service providers, in aiding a post-COVID recovery.
Click on the timestamps from the webinar stream to hear specific segments. You can also click on the image below to experience the complete webinar.
00:00– 2:20 Doreen Njau, Communications Manager, Anglophone Africa, opens up the conversation and introduces the topic for the day
2:28– 4:10 Kimotho Joseph, Access to Finance Specialist Feed the Future, Kenya Crops & Dairy Market Systems (KCDMS), gives the welcome note and sets the agenda for the webinar
4:39– 7:23 – Eric Kingori, Independent Consultant—Finance and Investments, gives the context of the discussion and introduces the participants
13:26– 15:42 Tom Kibet—Chief Operations Officer, Nuru Kenya responds to question 1: Paint a picture of how business was like before COVID-19 and how it compares to the situation today
16:01– 18:54 Daniel Musyoka—CEO and Managing Director, Biofarms Limited contributes to question 1. Paint for a picture of how business was like before COVID-19 and how it compares to the situation today
19:44–21:56 Vivian Opondoh—Tech entrepreneur responds to question 2: How did the disruptions caused by COVID-19 affect your access to finance?
22:34–23:49 Nehemia Odongo—CEO, Magos Farm Enterprises gives his perspective on question 2: How did the disruptions caused by COVID-19 affect your access to finance?
24:16 –29:41 Immaculate Ochieno—Lending Manager – East Africa, Shared Interest Society Ltd. gives her perspective from the supply-side on question 2: How did the disruptions caused by COVID-19 affect your access to finance?
30:21–33:31 Dr. Patrick Gathondu—CEO, BIMAS Kenya Microfinance Limited, also shares his perspective from the supply side on question 2: How did the disruptions caused by COVID-19 affect your access to finance?
34:11 –36:52 Dr. Patrick Gathondu responds to question 3: What do you foresee as the medium- and long-term changes? What changes are going to be irreversible?
37:16 – 39:50 Nehemia Odongo gives his perspective from the demand side on question 3: What do you foresee as the medium- and long-term changes? What changes are going to be irreversible?
39:57 – 52:55 – The panelists respond to a round of questions from the audience
Question 1) I wonder if lenders, such as funders, could be flexible with the terms of repayment of loans? In other words, did you have space to renegotiate the lending terms with your lenders?
Question 2) In the future, how do the financers ensure that agribusinesses are financed despite challenges around lack of guarantors or inappropriate guarantees?
Question 3) Are export-oriented crops the only ones that are financeable?
Question 4) What are the key variables one needs to consider from a business perspective given the impact of the pandemic?
1:00:10– 1:04:58 – Eric Kingori introduces the panel of three for a round of conversation
1:06:26– 1:08:59 John Kashangaki- Senior Advisor, Palladium Group- USAID/KIM responds to Question 1: What have been the sustained impacts of COVID-19 on the economy?
1:09:46 – 1:13:05 Juliet Ongwae (Ph.D.)—Digital Transformation Expert, MSC contributes to Question 1: What have been the sustained impacts of COVID-19 on the economy?
1:14:16 – 1:21:20 Jahazi David, Program Lead, Youth Engagement—Kenya responds from a gender and youth lens to Question 1: What have been the sustained impacts of COVID-19 on the economy?
1:21:50 – 1:26:54 John Kashangaki responds to Question 2: What interventions can development actors or governments undertake or are undertaking to address the adverse effects of COVID-19? How can these opportunities be exploited?
1:27:25 – 1:30:08 Juliet Ongwae gives her perspective on Question 2: What interventions can development actors or governments undertake or are undertaking to address the adverse effects of COVID-19? How can these opportunities be exploited?
1:31:30 – 1:35:10 Jahazi David responds to Question 3: What’s the approach that Mastercard Foundation currently uses to create dignified jobs in agribusiness amid the COVID-19 crisis?
1:39:19– 1:46:20 Dr. Robert Mwadime, USAID- KCDMS Chief of Party and Deputy Office Director- Office of Economic Growth and Integration, USAID present the concluding remarks.
India is a country on the move, with crores of people moving out of their villages and towns every year searching for better livelihood opportunities elsewhere in the country. Against this backdrop, social welfare benefits meant for them and other eligible beneficiaries must be made portable, so they can be availed no matter where the beneficiary is physically located at a given point in time.
A big step in this direction is the implementation of the One Nation One Ration Card (ONORC) under the Public Distribution System (PDS). Earlier, beneficiaries could get ration only from a specific fair price shop in their home locality. This limitation meant that migrants were denied their food grain entitlement at the destination. In one stroke, ONORC has solved this fundamental constraint. The reform’s grand vision is to allow beneficiaries to get their entitlement of government-subsidized wheat and rice from any fair price shop anywhere in the country, at their convenience. The implementation of ONORC has assumed greater velocity in the wake of the plight of domestic migrant workers since the Covid-19 pandemic began last year.
One of the key design features of ONORC is the concept of Single Source of Data (SSOD). SSOD is a data storage principle, whereby all the data is collected close to its source and stored in a centralized place to be accessed by all authorized parties, no matter where they are physically located. In any large system (like a government or corporate), if the SSOD principles are followed, it ensures that the data is verifiable and non-repudiable.
For ONORC, the Union government has collated the data about ration card-holders to a single, centralized platform that was held only at the state level until recently. The merging of the databases has made it possible for a migrant worker, say from Bihar to avail of food benefits even when he is in Maharashtra, where he may be working for a few months.
By using the SSOD concept in ONORC, India has created a good data management and governance model while providing the portability of services across geographical barriers. Similarly, the policymakers can consider adopting SSOD principles in their data management and implementing other social welfare programmes, to make them more efficient and provide nationwide portability.
How Single Source Enabled Ration Card Portability
Two-thirds of India’s population, or around 80 crore people, are entitled to subsidized food grain under the National Food Security Act (NFSA, 2013). The targeted beneficiaries under NFSA receive the foodgrain through the public distribution system (PDS).
In the last decade, the governments, both at the state and the union level have taken rapid strides in reforming the PDS. At the union government level, one of the most important reforms was the end-to-end computerization of PDS operations. This included digitization of the beneficiary database, online allocation of food grain, and computerization of the supply chain (from FCI warehouses to FPS shops).
At the state-level too, the reforms included digitizing all the ration cards and seeding the Aadhaar number for each ration card. With these measures alone, the states and union territories could remove around 4.39 crore fake, ineligible, duplicate ration cards between 2013 to 2020. Further, to make ONORC possible, states have shared their ration card databases with the union government, creating a central-level database. By now, 34 states have implemented ONORC, while two more states — Chhattisgarh and Assam — are likely to get on board within a few months.
Those entitled to get subsidized food grains are already availing the benefits of ONORC. Presently, a monthly average of about 2.2 crore portability transactions (including inter-/intra-State and PM-GKAY foodgrain transactions) are being recorded in ONORC.
There are four main ways in which ONORC incorporates the SSOD principles:
Data collection close to the source of data: States collect information about ration card-holders, such as their names, age etc., at the unit closest to them, such as at village level. In addition, beneficiaries’ credentials are validated using biometrics and Aadhar card details, reducing the possibility of fake beneficiaries making the data reliable and non-repudiable data.
Creation of a centralized database: Though ration cardholder data is collected and managed by states, it is also shared with a centralized database and updated periodically. By seeing all state-level data on a single, central dashboard, policymakers can get the big-picture of what’s going on across the country. This data can be used to support budget baselines, help data-based cost estimates of projects, remove duplicate beneficiaries and for setting performance benchmarks for departments.
Real-time data sharing: The ONORC platform has been set up such that when a beneficiary makes a transaction, both the state and central-level databases are updated in real or near real-time. For instance, when a person from Bihar withdraws food grains from Delhi, the system sends a message to the centralized database, Bihar, and Delhi databases, that a transaction has happened. This reduces the chance of ‘double-dipping’ where a person can withdraw grains from two places simultaneously.
‘Minimalism’ by design: While each state collects the beneficiary and the transaction details in their own way, the central database extracts only that information which is present across all the state databases using APIs. This allows states the freedom to continue collecting data that they feel is necessary.
The Backbone for Other Welfare Plans
ONORC isn’t the only programme that has implemented SSOD. Its principles were used to execute India’s LPG subsidy reform. In this, customer data that was being held across databases of three different oil marketing companies was collated in one place. This single database of beneficiaries allowed authorities to identify and weed out 4.49 crore duplicate, fake and non-existent beneficiaries. That saved the exchequer INR 71,301 crore, as on March 31, 2020.
Multiple other government welfare programmes can implement these principles to make them more efficient and effective.
The Single Source of Data principle can support various health initiatives for maternal and child health. Studies have shown that women who work as migrant labour have poorer health outcomes. These women often return home and by the time they get registered for health services, their pregnancy is in the last stages, compromising crucial health care for themselves and their unborn child. Solutions that include the portability of these services can be a huge step in ensuring better health outcomes.
Government’s much ambitious Pradhan MantriJan Arogya Yojana (PM-JAY), popularly known as Ayushman Bharat that aims to provide health insurance to 500 million people can be made portable through the SSOD principle to ensure that migrant people continue to get health cover as they move.
One prime use case would be in the world’s largest public-works programme provided under the Mahatma Gandhi Rural Employment Guarantee Act. In this, the government guarantees at least 100 days of employment to every rural household. Households can avail of this programme within a radius of five kilometers of their village, and in some cases, it is available at the block level. However, if the programme could be made portable, it would allow villagers to find employment anywhere in India.
This blog first appeared as an Op-ed in the ET Government on September 30, 2021.
