Only 15 paise reaches the beneficiary explained

In the 1980s Rajiv Gandhi, then the Prime Minister of India, had said that for every rupee targeted towards welfare and poverty alleviation only a fraction, 15 paise, reached the intended beneficiary.^{[1] [2]} This observation by the Prime Minister has been called a guess, an estimate, not based on empirical data.^[3] While the statement has been connected to corruption, it has also been taken as an understanding of the large operating costs and overheads of administering public services.^[4] India's Chief Vigilance Commissioner later added that of the remaining, "40 paise perhaps can be accounted for administrative overheads and 45 paise is pure corruption".^[5]

It has also been felt and politically stated that even less than 15 paise is a truer estimate in some cases; 10 paise,^[6] even less than 5 paise.^[7] In 2007, in the same context, deputy chairman of the Planning Commission Montek Singh Ahluwalia said that the amount that reaches the poor has reached 50%.^{[8] [9]} In 2009, Prime Minister Manmohan Singh agreed that there were still leakages, however not to the tune of what Rajiv Gandhi had felt.^{[10] [11]} An empirical estimate based on a later study under economist Kirit Parikh came up with the figure of 16 paise. This figure varies between state and program. A 2005 study stated "one rupee of budgetary consumer subsidy is worth only 27 paise to the poor" with a finding that about 58% of food grains do not reach the intended target.

Following implementation of Aadhaar, direct benefit transfer, and with other improvements in last mile delivery, Prime Minister Narendra Modi would go on to state that for every rupee, every paisa will reach the poor.^{[12] [13] [14]}

Notes and References

1. Web site: Saksena . Devendra . 2017-08-10 . The 85-paise riddle! . 2022-04-21 . The Statesman . en-US.
2. Web site: 2017-06-11 . Press Trust of India . 'Only 15 paise reaches the needy': SC quotes Rajiv Gandhi in its Aadhaar verdict . 2022-04-21 . Hindustan Times . en.
3. Web site: Pritchett . Lant . Aiyar . Yamini . June 2015 . CGD Working Paper 391 . Value Subtraction in Public Sector Production: Accounting Versus Economic Cost of Primary Schooling in India . Center for Global Development, Washington, D.C..
4. Web site: Habibullah . Wajahat . Wajahat Habibullah . 2019-08-20 . Rajiv Gandhi and his vision of democracy in India . 2022-04-21 . National Herald . en.
5. Web site: Singh . Sanjeet . 20-22 October 2005 . Fighting Corruption in Developing Countries : Dimensions of the Problem in India . https://web.archive.org/web/20220421165610/https://www.piarc.org/ressources/documents/551,2.3-Singh-1005C13.pdf . 21 April 2022 . PIARC Seminar on Good Governance, Institutional Integrity, and Human Resources Management for Road Administrations . Warsaw, Poland.
6. Web site: Bhaumik . Saba Naqvi . November 15, 1996 . Campaign for right to information in Rajasthan exposes rot in system in villages . 2022-04-21 . India Today . en.
7. Web site: Joy . Santosh K . 17 January 2008 . Rahul echoes Rajiv Gandhi's comment on public fund . 2022-04-21 . Rediff.com.
8. Web site: Singh . Sangeeta . 2007-12-07 . Ahluwalia says 50% leakage in grain distribution is unacceptable . 2022-04-21 . Livemint.
9. Web site: 2009-07-07 . PTI . Montek moots 'budget tracking system' . 2022-04-21 . Hindustan Times . en.
10. News: PTI . 2009-10-11 . Fund 'leakage' not as big as Rajiv Gandhi mentioned: PM . en-IN . The Hindu . 2022-04-21 . 0971-751X.
11. Web site: 2009-10-11 . PM admits to fund 'leakage', but not as big as Rajiv said . 2022-04-21 . Zee News . en.
12. Web site: 23 August 2018 . When my govt releases Re 1, poor will get the entire 100 paise, says Modi . 2022-04-21 . The Week . en.
13. News: 23 August 2018 . No place for 'middlemen' in my government, every paisa reaches poor: PM Narendra Modi . The Economic Times . PTI . 2022-04-21.
14. Web site: 2022-04-19 . Direct transfer benefits now fully reaching farmers: PM . 2022-04-21 . The Statesman . en-US.