Cash Transfer Scheme can bring significant changes

By launching the world’s largest direct benefit transfer scheme on New Year, the UPA government has influenced mathematics of the BJP led NDA. The scheme has been given the name “Aapka Paisa Aapke Haath” while the Finance Minister P Chidambaram has called it as “game changer” and “magical”. In this sequence the Unique Identification Number (UID) or Aadhaar has come out to be a historic way. Its comparison can be done with the green revolution, right to information act and MNREGA.  The DCT scheme got its consent from the top congress leaders and even after continuous oppose from the members of the National Advisory Council (NAC), opposition parties and social and economic critics, the scheme is launched in 20 districts. Although, the pilot project of kerosene in Rajasthan failed, the scheme is still launched.

Most critics are not against involving the widow pension and scholarship under cash transfer but are not in favour of involving food, employment, health schemes and education field under the belt of cash transfer. Many critics say that under the name of good economist, this type of transfer will be used as excuse to reduce the welfare subsidy. Some economists feel that if the beneficiary or the head of the family is a woman then such type of benefit transfer scheme is more beneficial but in countries like India where man precedes all, the level of dissimilarity is very high. This is also possible that local rich people or money lender might use this system according to them.

Among a type of democratic people development, the poor population in comparison to middle income and higher income group has progressed significantly towards voting. This is clear evidence that the government has focused more on conservative democracy.  After getting a tremendous gain of MNREGA in the 2009 Lok Sabha elections, the UPA is hoping for similar results in the next general elections in 2014. MNREGA has got excellent popularity among all the political parties because politicians from every party want to help poor people from their constituencies. For this they mainly take help of these welfare programs. Analysis from other countries like Namibia, Brazil, etc. shows that cash transfer provides a pace to the development of local demand and market. But there found no relation between the cash transfer and pace in the development. Assigning the job of cash transfer into the hands of banking correspondents (BCs) will not only politically but also economically be a wrong step.

Seeing at the past experience of providing services in the country it can be said that implementing 26 welfare schemes through the cash transfer scheme may be complicated job. Besides identification of the beneficiary, deciding their validity this involves connecting them with the Aadhaar. Opening up of bank accounts and quickly reaching to the post offices is also a big job because out of 121 crore population only 40% have bank accounts and out of 6 lakh villages there are only 36000 bank branches in villages. The task for RBI must be to expand quickly the banking facilities in the villages. The decision of expanding postal network is a good one. If post offices start working then there will be no need of BCs.

The scheme can certainly brought significant changes in the country. Though it is not dangerous ideologically and politically but still it is a scheme full of difficulty.

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