Parliamentary panel pitches for direct cash transfers

A parliamentary panel has recommended direct cash transfer of subsidies to bank accounts of beneficiaries of various social sector schemes of the government.

“It (transfer of cash) would also facilitate the process of financial inclusion being attempted by the banking sector and if it is integrated with the ‘Aadhar’ numbers, go a long way in plugging rampant leakages in dissemination of benefits to the poor,” said a report by Parliament’s Standing Committee on Finance (SCF).It recommended the government also study successful cash transfer schemes in operation elsewhere, such as the ‘Bolsa Famila Programme’ (BFP) in Brazil and a similar model in Indonesia. Under the BFP, cash is transferred to poor Brazilian families through banks but with a condition that their children attend school and are vaccinated.

A World Bank study showed the BFP helped lift 20 million Brazilians out of poverty between 2003 and 2009. Incomes of the poor grew seven time faster than the rich and three times faster than the national average during the period. “Ensuring that every rupee reaches the person it is meant for, as Brazil’s popular BFP shows, can strengthen India’s fight against poverty,” says the report. The panel, chaired by BJP leader Yashwant Sinha, questioned how crores of rupees spent on anti-poverty programmes had not yielded the desired results.