Government of India is planning to rolling out direct cash transfer to the poor households from next year January on wards. Initially direct cash transfer starts across 51 Aadhar enabled districts with needed banking infrastructure on a pilot basis and further it will be getting extended to all states. This innovative initiative will involve transfer of 3.2 lack crore worth of subsidies to the targeted populace. Starting with cooking gas , it is hoped that food, agricultural inputs, pension payments, scholarships, power, health and other social welfare schemes(MGNREGA) will ultimately move to direct electronic payments.
Based on the success story of Brazil(Bolsa Familia), Indonesia, Chile and Mexico, etc countries, cash transfer programs, triggered our nation state to endeavor direct cash transfer program. The reason behind the pinnacle of success of cash transfer was bottom up approach, community owned initiatives, people awareness levels and engaged politico-admin setup. Lets examine this novel project, in our socioeconomic milieu.
Our socioeconomic settings are characterized by, India is a modern economy and medieval polity, caste based cleavages, primordial political mobilization, still struggling with identification of poor masses and more over its a daunting task to reach the rural unconnected hinterland. so need of the hour is to adopt global best practices and innovate better practices according to our context. Lets look at few advantages.
Main benefits of direct transfer would be reducing the transaction cost, eliminating pilferage, containing the penumbra of corrupt practices, enabling the migrant workers to access various social benefits based on Aadhar card, giving more voice to the marginalized sections of Indian society and the most important point is eliminating middleman. In that sense cash transfer endeavor is boon for rural masses. Lets look at the other-side of the same coin.
The most of the Indian villages are under banked(nearly 60%), banking penetration was very meager compare to Brazil, Mexico, etc, and then how to link Aadhar enabled card to bank accounts?
Majority of rural populace are unaware or ignorant about basic financial services! It is worth to mention that few of them do not even know, about how to use ATM cards? How much money is getting deposited/withdrawal?
How to ensure transferred money would be used for the intended purpose? Traditionally Indian society is characterized by patriarchal feudal mindset, where men is predominately control economic resources over women, then is it not direct cash transfer would put woman at the mercy of her male counterpart? Are we deliberately planning to perpetuate entrenched patriarchal mindset because literally woman do not have any role to play over here!
Some critique even pointing towards escalation of inflation figures because it is a difficult task to track money flow in the macroeconomic perspective.
Finally, our welfare state is leaving the rural innocent, ignorant BPL people at the mercy of market forces, where market is inherently not pro poor. Lets suggest how to make it more accessible, affordable and available to the citizens.
Democratic decentralization(PRIs) brought the soft revolution at the rural hinterland, where more than million people are directly elected by the people. So to make cash transfer scheme more accountable, more participative and community owned then involve Panchayati Raj Institutions(PRIs). PRI should be given more authority right from identification of the most vulnerable sections like SC/ST, minority communities, woman and elimination of ghost beneficiaries.
From the success story of Self Help Groups(SHG's), micro-finance institutions, etc we need to acknowledge the social power of woman and their capabilities towards responsible household management. Studies revealed that woman are more responsible than their male counterpart. Need of the hour is to provide some special privileges for woman so that she can educate her children and gradually patriarchal practices might decline.
Lets use our post office network to realize financial inclusion at the rural hinterland, along with banking correspondent model. Make use of mobile phone as an instrument for information dissemination, money transfer, etc
According to Arjun SenGupta report, there are more than 50% of BPL population is living in our nation. Here welfare state has to ensure a strong regulatory mechanism to curb black marketing, hoardings, etc so that supply chain shouldn't be interrupted and serve the most vulnerable sections.
There should be an independent evaluation team to critically analyze the results of 51 districts where cash transfer initiative would be launched on experimental basis.
Indian nation state is often stated as soft state, where it can't implement its own policies effectively, efficiently and more over in a democratic spirit. In this background, the most important point is that, state cooperation is imperative to make the whole process would be boon for the rural households.
Suneel Anchipaka
anchipaka.suneel@gmail.com
Based on the success story of Brazil(Bolsa Familia), Indonesia, Chile and Mexico, etc countries, cash transfer programs, triggered our nation state to endeavor direct cash transfer program. The reason behind the pinnacle of success of cash transfer was bottom up approach, community owned initiatives, people awareness levels and engaged politico-admin setup. Lets examine this novel project, in our socioeconomic milieu.
Our socioeconomic settings are characterized by, India is a modern economy and medieval polity, caste based cleavages, primordial political mobilization, still struggling with identification of poor masses and more over its a daunting task to reach the rural unconnected hinterland. so need of the hour is to adopt global best practices and innovate better practices according to our context. Lets look at few advantages.
Main benefits of direct transfer would be reducing the transaction cost, eliminating pilferage, containing the penumbra of corrupt practices, enabling the migrant workers to access various social benefits based on Aadhar card, giving more voice to the marginalized sections of Indian society and the most important point is eliminating middleman. In that sense cash transfer endeavor is boon for rural masses. Lets look at the other-side of the same coin.
The most of the Indian villages are under banked(nearly 60%), banking penetration was very meager compare to Brazil, Mexico, etc, and then how to link Aadhar enabled card to bank accounts?
Majority of rural populace are unaware or ignorant about basic financial services! It is worth to mention that few of them do not even know, about how to use ATM cards? How much money is getting deposited/withdrawal?
How to ensure transferred money would be used for the intended purpose? Traditionally Indian society is characterized by patriarchal feudal mindset, where men is predominately control economic resources over women, then is it not direct cash transfer would put woman at the mercy of her male counterpart? Are we deliberately planning to perpetuate entrenched patriarchal mindset because literally woman do not have any role to play over here!
Some critique even pointing towards escalation of inflation figures because it is a difficult task to track money flow in the macroeconomic perspective.
Finally, our welfare state is leaving the rural innocent, ignorant BPL people at the mercy of market forces, where market is inherently not pro poor. Lets suggest how to make it more accessible, affordable and available to the citizens.
Democratic decentralization(PRIs) brought the soft revolution at the rural hinterland, where more than million people are directly elected by the people. So to make cash transfer scheme more accountable, more participative and community owned then involve Panchayati Raj Institutions(PRIs). PRI should be given more authority right from identification of the most vulnerable sections like SC/ST, minority communities, woman and elimination of ghost beneficiaries.
From the success story of Self Help Groups(SHG's), micro-finance institutions, etc we need to acknowledge the social power of woman and their capabilities towards responsible household management. Studies revealed that woman are more responsible than their male counterpart. Need of the hour is to provide some special privileges for woman so that she can educate her children and gradually patriarchal practices might decline.
Lets use our post office network to realize financial inclusion at the rural hinterland, along with banking correspondent model. Make use of mobile phone as an instrument for information dissemination, money transfer, etc
According to Arjun SenGupta report, there are more than 50% of BPL population is living in our nation. Here welfare state has to ensure a strong regulatory mechanism to curb black marketing, hoardings, etc so that supply chain shouldn't be interrupted and serve the most vulnerable sections.
There should be an independent evaluation team to critically analyze the results of 51 districts where cash transfer initiative would be launched on experimental basis.
Indian nation state is often stated as soft state, where it can't implement its own policies effectively, efficiently and more over in a democratic spirit. In this background, the most important point is that, state cooperation is imperative to make the whole process would be boon for the rural households.
Suneel Anchipaka
anchipaka.suneel@gmail.com
