Tuesday, November 27, 2012

Direct cash transfer

Poll time: Ministers detail biggest reform measure "direct cash transfer" from Congress Headquarters

Indian central government has decided to offer subsidy to families below the poverty line directly through cash transfers to their bank accounts, as opposed to the prevailing indirect model today.

The amount per family per year seems to be large: Rs 32,000. For 10 crore homes, this amounts to Rs 3.2 lakh crore an year. How this is going to be rolled out while dismantling the current indirect subsidy is unclear.

At a certain level, some kind of subsidy is required to lift poor people up. Let us hope they use the money sensibly and not waste it away. In fact, the leftists are the ones who disapprove of direct cash transfers. They probably do not trust the poor to spend the money wisely on food, education and healthcare.

We have to see how this works in the pilot districts. It may be worthwhile that the money be transferred to the woman of the household rather than the man.


  1. Have you read this below editorial in Dinamani?


  2. A good research work on this piece