Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
Notice (8): Undefined variable: urlPrefix [APP/Template/Layout/printlayout.ctp, line 8]latest-news-updates/on-the-money-18278.html"/> LATEST NEWS UPDATES | On the money | Im4change.org
Resource centre on India's rural distress
 
 

On the money
-The Indian Express

The UPA has long been planning a shift to direct cash transfers for poor households, with a view to replacing the 3.23 lakh crore worth of unwieldy subsidies currently in place. Last year, the then finance minister Pranab Mukherjee had spoken of the famously inefficient food and fertiliser subsidies, and of a comprehensive overhaul through cash transfers. Now, that plan has been fleshed out further. The prime minister heads the national committee monitoring the transition, which involves collaboration between the Planning Commission, Aadhaar, as well as ministry inputs from rural development, social justice, minority affairs, food and public distribution, etc. On January 1, cash transfers will kick off in 51 chosen Aadhar-enabled districts with the needed banking infrastructure, and then progressively extend outwards to all states. Starting with cooking gas, it is hoped that food, agricultural inputs, power, fuel and other welfare schemes like scholarships and pensions in these districts will ultimately move to direct electronic payments.

Many nations, including Brazil, Indonesia and Chile, have shown success in cash transfers, and there has been much academic debate on the design and intentions of such a programme. Opinion in India has been mixed, with critics pointing out that inflation can erode the value of money, that cash may be misused and that banking services have not penetrated many parts of India sufficiently. The advantages of cash transfers are manifold — they reduce transaction costs, eliminate the pilferage, waste and corruption that accompany redistribution in kind, they enable access for migrant workers, and besides, it makes more sense to trust the poor with how to use the money meant for them than to rely on the state’s paternalistic judgment and methods. Biometrics can narrow the leakages to a great extent — eliminating “ghost” payments, creating a clear and auditable trail, etc. 

Of course, cash transfers will be a radical change for beneficiaries, who have been used to transacting in commodities. As the experience with microfinance schemes has shown, the move to a cash-based system needs to be carefully handled. Often, in other experiments with cash transfers, this income support is channelled through women, to make responsible spending choices. The state will also have to work out what it had hoped to achieve with the subsidy, and in what ways it can complement the cash transfer to make sure buyers get value for their money. The policy must also be nimble, and make sure that there is no “lock-in” effect, that the state has the capacity to change tack if its goals are underserved. The results from these 51 districts should be rigorously evaluated, and the scheme tweaked in the light of these learnings, before it is rolled out in the rest of India.