JHABUA, India – Inside the drab district hospital, where dogs patter down the corridors, sniffing for food, Ratan Bhuria’s children are curled together in the malnutrition ward, hovering at the edge of starvation. His daughter, Nani, is 4 and weighs 20 pounds. His son, Jogdiya, is 2 and weighs only 8.

Landless and illiterate, drowned by debt, Bhuria and his ailing children have staggered into the hospital ward after falling through India’s social safety net. They should receive subsidized government food and cooking fuel. They do not. The older children should be enrolled in school and receiving a free daily lunch. They are not. And they are hardly alone: India’s eight poorest states have more people in poverty – an estimated 421 million – than Africa’s 26 poorest nations, one study recently reported.

For the governing Indian National Congress Party, which has staked its political fortunes on appealing to the poor, this persistent inability to make government work for people like Bhuria has set off an ideological debate over a question that once would have been unthinkable in India: Should the country begin to unshackle the poor from the inefficient, decades-old government food distribution system and try something radical, like simply giving out food coupons, or cash?

The rethinking is being prodded by a potentially sweeping proposal that has divided the Congress Party. Its president, Sonia Gandhi, is pushing to create a constitutional right to food and expand the existing entitlement so that every Indian family would qualify for a monthly 77-pound bag of grain, sugar and kerosene. Such entitlements have helped the Congress Party win votes, especially in rural areas.

To Gandhi and many left-leaning social allies, making food a universal right would ensure that people like Bhuria are not deprived. But many economists and market advocates within the Congress Party believe the delivery system needs to be dismantled, not expanded; they argue that handing out vouchers would liberate the poor from an unwieldy government apparatus and let them buy what they please, where they please.

"The question is whether there is a role for the market in the delivery of social programs," said Bharat Ramaswami, a rural economist at the Indian Statistical Institute. "This is a big issue: Can you harness the market?"

India’s ability, or inability, in coming decades to improve the lives of the poor will very likely determine if it becomes a global economic power, and a regional rival to China, or if it continues to be compared with Africa in poverty surveys.

India vanquished food shortages during the 1960s with the Green Revolution, which introduced high-yield grains and fertilizers and expanded irrigation, and the country has had one of the world’s fastest-growing economies during the past decade. But its poverty and hunger indexes remain dismal, with roughly 42 percent of all Indian children younger than 5 being underweight.

The food system has existed for more than half a century and has become riddled with corruption and inefficiency. Studies show that 70 percent of a roughly $12 billion budget is wasted, stolen or absorbed by bureaucratic and transportation costs. Gandhi’s proposal, still far from becoming law, has been scaled back, for now, so that universal eligibility would initially be introduced only in the country’s 200 poorest districts, including here in Jhabua, at the western edge of the state of Madhya Pradesh.

With some of the highest levels of poverty and child malnutrition in the world, Madhya Pradesh underscores the need for change in the food system. Earlier this year, the official overseeing the state’s child development programs was arrested on charges of stealing money. In Jhabua, local news media recently reported a spate of child deaths linked to malnutrition in several villages. Investigators later discovered 3,500 fake food ration booklets in the district, believed to have been issued by low-level officials for themselves and their friends.

Inside the district hospital, Bhuria said he had applied three times for a food ration card, but the clerk had failed to produce one.

"Every time he would say, ‘We will do it, we will do it,"’ Bhuria recalled. "But he never did."

A farmer, Bhuria fell into deep debt six years ago after he mortgaged his land for a loan of 150,000 rupees, or about $3,200. Like most people in the district, Bhuria is a Bhil, a member of a minority group whose customs call for the family of the groom to pay a "bride price" before a wedding. Bhuria spent most of his loan on his brother’s wedding and was left landless, yet he and his wife kept having children. They now have six.

He and his wife migrated with their children to work as day laborers in the neighboring state of Gujarat. Working in Gujarat is common for farmers from Jhabua, but since none can use their ration booklets outside their home villages, they struggle to feed their families. When migrants returned to plant their fields in July, the malnutrition wards began to fill up at the district hospital.

"This is a cycle," said Dr. I.S. Chauhan, who oversees the wards. "The mother is also malnourished. And they are migrant workers. They work all day and can’t care for their children."

Moneylenders are common across rural India, often providing loans at extortionate rates. Some farmers hand over food booklets as collateral. Sitting in a small shop, Salim Khan said people approach him for loans when a child is sick or if they need cash to travel for migrant work.

"Until they repay me," he said, "I keep their ration card."

He uses the cards to buy grain at government Fair Price Shops at the subsidized rate of about 2 rupees, or 4 cents, a kilogram. He resells it on the open market for six times as much. The margin represents interest on the loan. He has held the ration cards of some migrants for seven years. "Sometimes I’ll have 50 cards," he said. "Sometimes I’ll have 100 or 150. It’s not just me. Other lenders do this, too."

He said he was willing to lend slightly more money to the most destitute because their yellow ration booklets made him eligible for the full 77 pounds of grain, the most available in a tiered rationing system. "The yellow ones are best for me," he said.

This is just one of the illegalities that permeate the system, according to people in Jhabua. Bribery is also common; government inspectors are known to extort monthly payments from the clerks who sell the subsidized grain. Some clerks pay small bribes to local officials to get their jobs or keep them. In turn, moneylenders slip money to clerks to let them use the ration cards to collect the subsidized grain, sugar and fuel.

In a cavernous government warehouse, bags of grain are stacked almost 15 feet high, awaiting trucks to carry loads to different Fair Price Shops. R.K. Pandey, the manager, blamed local men for the persistent malnutrition in the district, saying they often sell the subsidized wheat on the open market and buy alcohol. He also noted that the Bhil population favored corn, not wheat, so besides buying alcohol, they also sell the grain to buy corn.

Efforts are under way to reform the national system. Officials in the state of Chhattisgarh have curbed corruption by tracking grain shipments on computers, so that officials cannot steal and resell it.

Many social advocates, suspicious of market solutions, say that such reforms prove that the system can be improved. But pro-market advocates say that issuing either food coupons or direct payments would circumvent much of the corruption and allow recipients more mobility and freedom of choice. They point to the eventual creation of a new national identity system – in which every person will have a number – as a tool that can make such direct benefits possible.

These sorts of debates seem like abstractions in much of Jhabua, where poverty and hunger are twinned. At the malnutrition ward, Chauhan said that Jogdiya, the tiny 2-year-old, had pneumonia, diarrhea and possibly tuberculosis. His health had been steadily deteriorating in recent weeks, but his father, Bhuria, had no money for either food or medicine. He had gone to Gujarat in mid-July in search of migrant work but then quickly returned after Jogdiya and Nani became sicker. A relative had warned him not to go, saying his children were too sick.

But he had felt he had no choice. "We didn’t have anything to eat," he had said.

© 2010 The New York Times Company