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This is an archive article published on March 14, 2011

Cash change

UP’s reform of a cash transfer scheme points to a much-needed nimbleness.

That our politics has taken a welfarist turn is difficult to deny. Unless that orientation is wedded to a sensible pragmatism,however,there is every chance that the aims of whatever policies are put into place to share the benefits of quick economic growth will stay unrealised. This truth,and the beginnings of a necessary quickness of response,is underlined by a report in this newspaper on Saturday. The government of Uttar Pradesh has had to alter the requirements for a scheme it calls the Mahamaya Gareeb Aarthik Madad Yojna,a direct transfer of cash to the poor — or more precisely,those poor households that neither have cards marking them as below the poverty line,nor are beneficiaries of any other government schemes.

The UP government had estimated that about 30 lakh families would turn out for the transfer — which is not a large amount,Rs 300 a month,though it was upgraded to Rs 400 a month on January 15 this year. Only a fraction of that number,however,asked for the handout. The UP government has correctly interpreted this: it does not mean that there are not at least 30 lakh poor families who would be glad of Rs 300 a month,nor does it mean that all such families are covered by existing government schemes. No,the gap instead pointed to the intensity of the problem the scheme was intended to correct: the difficulty of identifying the poor. Too few have BPL cards; and of those many who do not,it is because they have absolutely no way of interacting with the state. In the UP scheme,a beneficiary was proposed by his local gram sabha,and then needed to have a certificate attesting their income signed by a local tehsildar. That,Lucknow now thinks,was too onerous a requirement for those who were in any case off the map,and the requirement has been withdrawn.

The UP government has shown commendable quickness in trying to reform a scheme that was clearly not working. But,more than that,attention to the problem of inclusion requires more than merely increasing budgetary allocations. It needs a careful tweaking of the mechanisms with which we define beneficiaries,especially as we move,inevitably,to the increasing role of cash transfers as a method of welfare.

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