Cash transfers are now suggested by many as a silver bullet for addressing the problems that plague India’s anti-poverty programmes. This article argues instead for evidence-based policy and informed public debate to clarify the place, prospects and problems of cash transfers in India. By drawing on key empirical findings from academic and grey literature across the world an attempt is made to draw attention to three aspects of cash transfers...

The current perception that cash transfers can replace public provision of basic goods and services and become a catch-all solution for poverty reduction is false. Where cash transfers have helped to reduce poverty, they have added to public provision, not replaced it. For crucial items like food, direct provision protects poor consumers from rising prices and is part of a broader strategy to ensure domestic supply. Problems like targeting errors...

-The Business Standard   A group of activists led by Arvind Kejriwal today raised questions about Delhi government's move to provide cash instead of subsidised foodgrains for the poor, suspecting that the survey conducted ahead of the rolling out of the project was not genuine. "Why is Chief Minister Sheila Dikshit taking so much interest in the scheme? Why is she hell bent upon closing down PDS shops? Is the Chief Minister...

-FnBNews   The World Bank, like many analysts, is in favour of cash-transfer of subsidy for foodgrains to the poor in India. This suggestion was made in a recent report on Social Protection for a Changing India, drafted by the World Bank for the Government of India. Using the National Sample Survey data, the report stated that the Public Distribution System (PDS) continued to absorb substantial public resources at almost 1 per...

The World Bank has backed a controversial proposal to replace foodgrain allotment under the public distribution system with a system of direct cash transfer. The bank, which supports social security schemes in India, today said poverty reduction had been low and overall returns on spending to eradicate poverty had “not reached their full potential”. It attributed the low reduction to “high leakage” in the PDS system and its weak implementation mechanism. Earlier,...