The danger of cash transfers

With the general election around the corner and NSSO data revealing that the unemployment rate has hit a 45-year high, there is a spike in concern for the economic security of the people. Several recent proposals — whether the Congress’s pre-emptive announcement of a minimum income guarantee scheme, or the Interim Budget’s promise of a range of income transfers to farmers (albeit as low as ₹3 per day for a family of five) and a pension scheme for workers aged over 60 years in the unorganised sector, or the government’s announcement of a 10% quota for the “economically weaker sections” in the general category — might appear promising but raise questions about their impact on the working poor.

If uplift of the poor is a priority, why not provide decent employment opportunities, minimum wages and social security to all workers? Why not spend on universalising access to, and provision of, basic public services to all? Why, contrarily, are there periodic cuts in social sector spending, including on public education and primary health; amendments in labour laws in favour of corporates; and privatisation and contractualisation even within the public sector?

In this context, cash transfers to the “poor” — also subject to gross exclusionary errors of identification — do not ensure accessibility, affordability or even sustained economic security given falling real wages. The scheme also doesn’t indicate where that money would be spent by the beneficiaries. More importantly, the concern is that these cash transfers could replace, rather than supplement, existing schemes that provide subsidised goods and services. This would imply that citizens could be left at the mercy of private, for-profit players to avail even basic services. This might incentivise the state to shirk its constitutional responsibility of providing basic entitlements to all.

Case studies around Direct Benefit Transfers have shown that they play an instrumental role in dismantling existing welfare schemes like the Integrated Child Development Services and deprive ASHA and Anganwadi workers of their wages. These workers have been pillars in creating an ecosystem for ensuring nutritional security to women and children. Even in Europe, wherever guaranteed basic income has been implemented, provision of services has increasingly moved towards greater privatisation.

Finally, it is surprising that the same government that earlier opposed cash transfer schemes as “doles” is now advocating them. Politically the scheme seems to be the most viable option now, given the unemployment catastrophe. Hurried income transfers before the election could be considered as ‘cash for votes’, but the larger danger entails the state’s diminishing accountability towards its citizens, of upholding their rights to basic entitlements and to work.

Akriti Bhatia is a Ph.D. Scholar at the Delhi School of Economics. Chandan Kumar works with the Working Peoples’ Charter, a collective that works with informal labour across India

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Printable version | Apr 12, 2021 9:49:06 AM |

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