-Livemint.com
The success of cash transfers will depend on how well the government addresses design bugs
The recent economics conclave hosted by the finance ministry in the capital has rekindled the debate on cash transfers in India. Among the invitees to the conclave was one of the most vocal critics of India’s transition to direct cash transfers, Jean Dreze, a development economist and an advisor to the erstwhile United Progressive Alliance (UPA) government. But the invitation was revoked at the last moment for reasons that are not quite clear (bit.ly/1Okx3Y6).
Dreze, in turn, published a scathing critique of the move towards direct cash transfers, warning, “A single-minded focus on high-tech cash transfers as a foundation for social policy in India is fraught with dangers.” He argued that implementation challenges may hobble the cash transfer programme, which seeks to substitute the myriad subsidies the Indian state provides for direct cash transfers to beneficiaries. The cash transfer scheme risks excluding vulnerable groups and poorer people from the ambit of social protection schemes, Dreze wrote. He also warned that cash transfers may dilute people’s entitlements, “become a stepping stone towards state withdrawal from many essential services”, adding that “some influential economists are advocating precisely that”.
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