India: Starvation is real cost of corruption


Starvation is the real cost of corruption, Andrew MacAskill and Mehul Srivastava reveal in a must-read article in Bloomberg-BusinessWeek.

In what is obviously the fruit of a detailed investigation, the writers expose how private contractors stole most, if not all, of some $2 billion intended to provide nutritional supplements for the poor as part of India's Integrated Child Development Services program (ICDS). Often, food wasn't delivered at all. And when the "nutritional supplement" did arrive, it was often in the form of ersatz powder that was bereft of the promised vitamins, if it was even edible. (In one case, even India's plastic-bag-eating cows turned up their noses at the stuff).

ICDS is only part of the problem, of course. As the writers point out, "Corrupt politicians and their criminal syndicates have looted as much as $14.5 billion in food intended for public distribution to families in Uttar Pradesh alone."

But the case study here will come as a revelatory shock to readers who are unfamiliar with the degree of India's corruption problem. And even longtime India hands like myself will find there's something to learn.

The centerpiece of MacAskill and Srivastava's story is the ironically named Great Value Foods, the company owned by the notorious Ponty Chadha -- recently gunned down in a Scarface-style shootout with his brother, as GlobalPost reported earlier. Here's BusinessWeek:

In both Uttar Pradesh and Maharashtra, India’s most populous states, most of the money has gone to private firms.

Great Value Foods has held the largest ICDS contract in Uttar Pradesh for the past seven years, according to a program document obtained under India’s Right to Information Act. The biggest stake in Great Value Foods was owned by a company belonging to a liquor baron named Gurdeep Singh Chadha -- until he was shot and killed by his brother last month.

In Maharashtra, private companies have exploited a loophole, intended to increase the participation of women’s groups, to take over feeding contracts for the entire state.

The food in both states failed to meet all but one of the government’s prescribed nutritional standards, samples of the powder tested by the Supreme Court commissioner’s office found, according to court records. In Uttar Pradesh, one of the two samples had no vitamins, the other had no iron. In Maharashtra, none of the packets contained any vitamin A or C. All the packets tested were between 15 percent and 35 percent short of the required calorie content.

The reaction of the government in those cases and others was shameful, too.

In a Dec. 13 interview, Women and Child Development Minister Krishna Tirath told Bloomberg that private contractors weren’t involved in the program.

In almost every state, the program is working “very nicely, properly,” Tirath said in her office, estimating that at least 90 percent to 95 percent of the food is delivered. “There are no contractors now, contractors are not there.”


Food Minister K.V. Thomas cut short an interview and asked a Bloomberg reporter to leave when asked about corruption in the nutrition- distribution system.


In response to questions, the prime minister’s office provided details on how the government is working to improve the program. An October 2012 plan calls for restructuring the ICDS over three years, increasing focus on children under three. Higher daily allowances for each child will boost expenditures for the nutrition part of the program to $7.8 billion from the central government over the next five years. State governments usually match that.

The restructuring document didn’t clarify whether private firms should be banned from the process, suggesting that various models, including self-help groups or centralized kitchens, be considered, in addition to “bona fide manufacturers.”

Read the whole article here. It's worth examining in full.