Cash Transfer Scheme
Cash Transfers to end poverty – Over-ambitious economic policy or a welcome change to eliminate corruption in the Public Distribution System?
A study of the benefits of the Cash Transfer scheme to India’s poorest and its economic viability
Shrinidhi Rao
210063
Word Count – 3501 [including footnotes]
Introduction –
From January 1st, 2013, hundreds of thousands of India’s poor across 20 districts will benefit from the logical end of signing on to the Government’s Aadhar scheme. What was the most ambitious product of the Planning Commission of India in 2009 stopped in its tracks after about 20% of the population successfully applied to receive their 12-digit Universal Identification (UID). Now, those with an Aadhar UID and below the poverty line will receive subsidies from the Government in the form of cash. The Direct Benefits Transfer scheme will serve to, as name suggests, directly transfer benefits and subsidies to those requiring it by eliminating the middleman.
The idea was initially to be found in the Government of India’s Economic Survey for the year 2010-2011 and was re-affirmed with the Finance Minister making reference to forwarding a policy of replacing some subsidies on certain goods with direct cash being given instead. Eminent scholars have since remarked that while this may seem like an obviously simple solution to the complex problem of poverty and crippling under-development in parts of the country, i.e. to put poor people on a better bargaining position by making up the disparity by giving them additional cash, the realities of this is not so black and white.
The abstract benefits to merely doling out money to the poor could be that they do not need to dip into their savings for basic amenities – food, water, sanitation etc. Allowing them to use their savings to work on improving their own job skills - be it learning of new agricultural procedures, buying seeds, learning a vocational
A study of the benefits of the Cash Transfer scheme to India’s poorest and its economic viability
Shrinidhi Rao
210063
Word Count – 3501 [including footnotes]
Introduction –
From January 1st, 2013, hundreds of thousands of India’s poor across 20 districts will benefit from the logical end of signing on to the Government’s Aadhar scheme. What was the most ambitious product of the Planning Commission of India in 2009 stopped in its tracks after about 20% of the population successfully applied to receive their 12-digit Universal Identification (UID). Now, those with an Aadhar UID and below the poverty line will receive subsidies from the Government in the form of cash. The Direct Benefits Transfer scheme will serve to, as name suggests, directly transfer benefits and subsidies to those requiring it by eliminating the middleman.
The idea was initially to be found in the Government of India’s Economic Survey for the year 2010-2011 and was re-affirmed with the Finance Minister making reference to forwarding a policy of replacing some subsidies on certain goods with direct cash being given instead. Eminent scholars have since remarked that while this may seem like an obviously simple solution to the complex problem of poverty and crippling under-development in parts of the country, i.e. to put poor people on a better bargaining position by making up the disparity by giving them additional cash, the realities of this is not so black and white.
The abstract benefits to merely doling out money to the poor could be that they do not need to dip into their savings for basic amenities – food, water, sanitation etc. Allowing them to use their savings to work on improving their own job skills - be it learning of new agricultural procedures, buying seeds, learning a vocational