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LATEST NEWS UPDATES | Cash transfers for subsidised foodgrain: Government claims 99% success. Not so, say 33% -Mridula Chari

Cash transfers for subsidised foodgrain: Government claims 99% success. Not so, say 33% -Mridula Chari

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published Published on Sep 25, 2017   modified Modified on Sep 25, 2017
-Scroll.in

But study of the pilot scheme also finds that 67% of respondents now prefer cash transfers.

In three Union territories where the government is running an experimental project to distribute cash instead of subsidised foodgrains, a third of beneficiaries surveyed said they either had not received any money at all (with or without proof) or did not know if they had received it. This despite government claims that 99% of the cash transfers were successful.

These findings are part of a third and final study by researchers from the Abdul Latif Jameel Poverty Action Lab, which was commissioned by the government policy think tank Niti Aayog to evaluate the pilot project.

The project was launched in Chandigarh and Puducherry in September 2015 and in Dadra and Nagar Haveli in March 2016. Since then, the government has been transferring money into the bank accounts of beneficiaries instead of providing them with foodgrains through ration shops. These cash transfers are called direct benefit transfers.

The study recorded that two-thirds of the beneficiaries prefer cash transfers because they can now buy better quality foodgrains. But it was unable to assess whether overall food consumption by these households had declined since the price of foodgrains is higher in the market compared to the ration shops.

The study said the direct benefit transfer system has long-term promise but given the challenges in implementing it and the as yet “unknown impact on food consumption and nutrition”, it recommended that the government implement a choice-based direct benefit transfer pilot in the next round. In such a system, beneficiaries would be free to choose whether they want benefits in cash or in kind through the public distribution system.

This would “insure beneficiaries against welfare losses, and will allow for a politically and ethically risk-free approach to policy experimentation with DBT [direct benefit transfers],” the study added.

It would also help policy makers understand the nutritional impact of cash transfers and beneficiaries’ preferences, which the current design does not allow for lack of a control group.

Tracking the money

Between March 2016 and January 2017, the researchers surveyed 1,000 households in the three Union territories. The third study, conducted in February and March this year, recorded and analysed beneficiaries’ experiences with the new scheme between October 2016 and January 2017.

While in the second study, 48% of the people surveyed either did not receive full payments or did not know whether they had received anything at all, this number dropped to 33% in the third round.

But the third study did not track several indicators that were a cause for concern in the second study. For instance, the second study made a distinction between those who received no payment, some payment and almost all or full payments. The third study simply tracked those who received payment, did not receive it or did not know about it. It is, therefore, unclear whether the monthly instalments received by people were the full amounts they were entitled to.

Burak Eskici, one of the authors of the report, explained that this was because they had found in the second round that information collected from bank passbooks was not always reliable. When researchers in the second and third rounds asked beneficiaries if they had received any money, they did not always show them their passbooks, making the data collected patchy.

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Scroll.in, 23 September, 2017, https://scroll.in/article/851086/cash-transfers-for-subsidised-foodgrain-government-claims-99-success-not-so-say-33


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