High-tech graft-busting helps feed hungry Indians

RAYAGADA, India – The dreams of modern India rarely make it to Rayagada. The Indians of these eastern forests forage for sago leaves and wild mango to survive. Barely a third can sign their names. Most live without electricity. Many have joined a Maoist insurgency fighting to overthrow the system.

Now, modernity is creeping in. Smart cards, fingerprint scanners and biometric identity software are transforming Rayagada into a laboratory to test a thesis with deep implications for the future of India: Can technology fix a nation?

The target here is the disastrously corrupt Public Distribution System, a $15 billion food subsidy program frozen in a pre-digital world, where bound journals hold falsified records scrawled in handwriting so illegible one reformer lamented "even God could not read it."

In just the initial stages of the pilot program in the state of Orissa, 1,200 kilometers (750 miles) from New Delhi, officials have already saved millions of dollars and appear to be getting food to villagers barely clinging to this side of starvation. The once rare sight of women walking home with sacks of rice on their head on ration days is now routine. The once routine sight of children with bellies distended from hunger is now rare.

The early success has inspired a cascade of new ideas for using technology to seal yet more of the program's enormous leaks — "an attempt to make the system foolproof," said Nitin Jawale, the chief administrator of the Rayagada district.

Just as the quandary of how to lay telephone lines to remote outposts disappeared with the arrival of cheap cellphones, Indian officials are hoping new technologies — some yet to be discovered — will tackle some of the country's most intractable problems: corruption, collapsing health and education systems, a dearth of opportunity for the poor.

"We see innovation as truly a game-changer, to move from incremental change to radical change," Prime Minister Manmohan Singh said last year in announcing plans for a $1 billion venture capital fund to seed revolutionary new technologies.

The government is setting up innovation bodies in every state and has approved plans to bring broadband Internet to India's 250,000 villages.

It is also recording retina scans, fingerprints and photographs of all 1.2 billion Indians. The monumental endeavor to give everyone an identity record and number for the first time worries privacy experts but has sent reformers into a brainstorming frenzy over ideas for using the new database.

"There is great opportunity over the next decade to redesign the nation," said Sam Pitroda, head of the government's National Innovation Council.

For a country repeatedly jolted by screaming corruption scandals, the fraud and theft tainting the Public Distribution System is the ever-present white noise in the background, losing an estimated 58 percent of its subsidized grain, sugar and kerosene to so-called "leakages" — the scams that infest every part of the system.

Ration shop workers will claim the month's shipment never arrived, then sell it on the open market at as much as 10 times the subsidized price. They'll give confused and poorly educated recipients less than their full entitlement or substitute lower quality grain.

Since beneficiaries are registered at specific shops, they are subservient to the shopkeeper. Even the more honest workers sell off whatever rations are left at the end of the month. Or the grain may be diverted to the markets by the truckload before even reaching the shops.

Then, there are ghost ration cards given out under fake names, shadow cards in the hands of people other than the intended beneficiaries, and duplicate cards held by families registered at more than one shop. Sometimes, village thugs hold the cards as collateral for loan sharks, or collect the food themselves, distributing aid to the rightful recipients at their whim.

The system is meant to serve 400 million people, yet more than 250 million Indians are undernourished and 43 percent of children under 5 are stunted.

The program's failure is a symptom of the government dysfunction that has disillusioned many who were left out of India's economic growth and driven some to join the Maoists, branded the country's top internal security threat.

Sukhbasi Mandani, a bone-thin widow who guesses she's about 50, says her life hangs on the 280 rupees ($5.60) she earned last month, the food she forages from the hills and whatever part of her 30 kilogram (66 pounds) rice ration she manages to get. Without that, she said, "I would have no food at all."

The food program has its roots in a rationing system which was created in Bombay by India's British colonial rulers in 1939 and quickly spread nationwide as a weapon against famine.

While it has become a national embarrassment, it is considered irreplaceable for what food it does manage to deliver. As lawmakers debate Right to Food legislation that would expand the program, government officials, under orders from the Supreme Court, have started a series of reform experiments across the country.

Rayagada, where nearly every family qualifies for some sort of food aid, was an ideal location for a pilot project by the government and the U.N. World Food Program.

Despite the risk of Maoist kidnapping, teams were sent into villages with fingerprint scanners and digital cameras to reregister everyone enrolled in the program, record their biometric data and create a database.

In Rayagada, the district's main town, only 13,000 of the 23,000 enrolled families showed up, said Himanshu Bal, a World Food Program official. The others were either shadow cards or fakes. Clerks scouring the photos and fingerprints dropped thousands who tried to enroll twice using names spelled slightly differently.

The 210,000 families across the entire district who previously had been registered — and who had been recorded as taking food every month — fell to 180,000. The $1 million invested in the pilot program saved the government $4 million a year, Bal said.

The remaining recipients were given plastic or laminated cards, some with microchips, some with barcodes, to replace tattered, handwritten ration books.

At a store in Rayagada, under a creaking fan, a woman named Chandramma in a ragged pink sari and a necklace adorned with safety pins slid her microchip-embedded card into a device and put her thumb on its glass fingerprint scanner. The shopkeeper used a stylus on the touch-screen to register her rice order.

She paid 2 rupees a kilogram (about 2 cents a pound) as two barefoot men dumped rice on a digital scale with a tall display, easily visible to a customer.

Periodically, the machine uploads the day's data to a central server, ensuring that only the honestly distributed grain would be replenished the next month.

Chandramma had at first been wary of the technology. "I am an illiterate lady, I didn't trust whether this would work or not," she said. But officials patiently explained it, and, more important, she is getting her rice every month.

"At least we now know whoever should be getting (food) is getting it," said Orissa Food Secretary Madhu Sudan Padhy. "Without technology, how do we really keep track."

Other subsidies also need reform, such as those on kerosene, so cheap that many run their motorbikes on it, according to Jawale. Its smell pervades the streets of Rayagada.

Nandan Nilekani, the former head of outsourcing giant Infosys, heads the giant identification project as well as a panel tasked with fixing the ration system. He believes the reforms can go further.

Once everyone has an ID number, they won't need ration cards. Their information, stored on secure servers, can be verified by a cell phone hooked up to a retina- or fingerprint-scanner, he said. People could then get their rice at any ration shop, rewarding honest ones with more customers and driving the crooks out of business.

"The moment I can make my entitlement portable ... the bargaining power shifts to the beneficiary," Nilekani said.

That plan would face the same major hurdle that the pilot project does: the lack of electricity in rural areas makes the card readers unusable.

Reformers, excited by their initial success, say technology can solve that and other issues too. Shops without electricity might get solar panels, said Bal of the WFP.

They could install electronic scales that only print a receipt when the full amount is measured, he said.

The government also wants to put GPS trackers on delivery trucks and send text messages to recipients to ensure the food reaches them, said Padhy, the food secretary.

Success could inspire others across the country.

Because if technology can fix the Public Distribution System, anything is possible.

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