A day after the Union Government rolled out cash transfer for subsidies and entitlements, Jan Sansad, a coalition of more than 60 people’s movement, rejected it for being “anti-people”.

Terming the scheme “an attempt by the government to wash off its hands from the responsibility to provide basic services and social security to its citizens”, the coalition said direct cash transfer will have disastrous impact on the lives of the marginalised who are dependent on the Public Distribution System (PDS) and other forms of entitlements in health and education.

National Advisory Council member Aruna Roy, who is also associated with the coalition, said the government did not learn any lesson from cash transfers in the Mahatma Gandhi National Rural Employment Guarantee Act which besides being riddled with cases of delayed cash transfer could not contain corruption.

Amid slogans of “We do not want cash, we want entitlement, we want PDS”, IIT-Delhi faculty Ritika Khera, who also works on development issues, counted several reasons because of which the cash transfer system would not work for millions of people especially in rural India.

The success of cash transfer scheme depends to a large extent on easy accessibility to banks which unfortunately is not the case in rural India where banking infrastructure is extremely limited and people have to travel long distances to access a bank, she argued. The most negative aspect of the cash transfer, said Ms. Khera, was that it does not guarantee food security.

“There is no guarantee that the cash transfer will be used to buy food. In a country where malnutrition and hunger are two very important issues, cash transfer in lieu of the PDS would create food insecurity. At present because of the PDS, which is working pretty well in at least ten States of the country, there is a system which ensures delivery of grains to the poor,” Ms. Khera said.

Activists also pointed out “the complete absence of any mechanism of transparency and accountability of the market”. “With the dismantling of the PDS, people would be entirely dependent on the market or a few privately-owned shops in rural areas which may create artificial shortage and thereby increase food prices. Besides, there is no protection from inflation and fluctuation of market prices of food in the current scenario,” said the statement issued by the coalition.

To counter the government claims about the cash transfer being a “game changer”, Nikhil Dey, social activist associated with the ongoing campaign through the Jan Sansad, referred to the study by development economist Jean Dreze, which brought out loopholes in the pilot project of the cash transfer scheme carried out in Kotkasim, a tehsil in Rajasthan’s Alwar district, where the residents bought kerosene at market price and the subsidy that they were to receive was transferred directly to their bank accounts.

The study found out that the beneficiaries had to spend much more on travelling to banks than what they were getting as kerosene subsidy besides in several cases the payment of subsidies were “very erratic and untimely”. To demonstrate that the scheme was a big success, the dealers in Kotkasim were also reportedly forced to buy kerosene at a loss.

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