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Will the JAM Trinity Dismantle the PDS?

The platform known as the JAM Trinity (an acronym for Jan Dhan Yojana, Aadhaar and mobile numbers) may enable a shift from the current Public Distribution System, based on price subsidies, to the direct transfer of benefits. However, it is incorrect to argue that JAM technologies will necessarily lead to the demise of the PDS. State-level experiences of computerisation, recounted here, reveal that the same technologies can actually be tailored to improve the PDS, by contributing to reduce the problem of leakage that affects it.

The uptake of information technology (IT) for poverty reduction, a global trend since the mid-1990s, has recently been greatly popularised in India. Technology is conceived, in particular, as a fix to anti-poverty programmes, whose malfunctioning severely affects poor people’s capabilities to access their entitlements. In the Public Distribution System (PDS), the core problem is that of leakage, which affects the supply chain and deprives beneficiaries of the subsidised goods reserved for them. Given the depth of leakage on a national scale (Gulati and Saini 2015), a move from the PDS to direct transfer of benefits, which would curb illegal diversion, is being framed as a quite likely policy change.

The platform known as JAM trinity, resulting from three different systems (Jan Dhan Yojana, Aadhaar and mobile numbers), has been devised to enable this policy shift. That technology can act towards the improvement of public governance is well known (Bhatnagar 2004), but in this case we are witnessing a more radical move—technology is not there to improve existing mechanisms, but to enact deep modifications in anti-poverty policy. As the last Economic Survey (Government of India 2015) reveals, the combination of Jan Dhan’s bank accounts, Aadhaar’s unique identification and mobile phone usage has the purpose of rebuilding the social safety system, substituting price subsidies with direct transfers to users. By doing so, the market distortions induced by subsidies would be minimised, as well as the leakage that affects the PDS supply chains across the nation.

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