Mantra of Cash Transfers

There is a new mantra on the horizon. It is called “cash transfers”. It is a magic wand that will address the ills that afflict India’s anti-poverty programmes; it will do so by doing away with the programmes altogether and instead distribute cash to the deprived.

Until a few years ago, cash transfers (CT) – which in their purest form provide cash to an identified group of people – were nowhere in the public discourse in India. Now, prodded and facilitated by the World Bank and the United Nations Development Programme, media commentators, economists, and policymakers are pushing for cash transfers on a large scale. Budget 2011 announced that the current subsidies on kerosene, fertilisers and, most important, food, would soon be given in some form of cash rather than be embedded in a subsidised price.