This refers to the book review "How cash transfers can work" (February 24). The jury is still out on the efficacy of cash transfers in lieu of the subsidised physical products to various beneficiaries. Yet, the governments find it clean, as otherwise they have to soil their hands with full logistic chains, as the 'leaky' public distribution system (PDS) has shown. The concept of cash transfer as basic income, as advocated in the book, appears promising in view of the freedom it gives to the recipients in using the money. However, its universalisation as an 'anchor' social security may make it less attractive to a government that is searching for ways to reduce the total subsidy burden.
One wonders what will happen when the country shifts to cash transfers in, say, PDS distribution and food article prices shoot up. The government may dilly-dally in raising the amount of cash subsidy proportionately, quoting a high fiscal deficit. However, if a poor person was getting a few kilos of wheat and rice, he may not had to worry about the complex arithmetic involved in calculating the value of subsidy to be received as cash. Cash transfers are not likely to prove a panacea for the poor, especially where the subsidy amount will shift from time to time, as the prices of commodities will be market-driven.
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number
One wonders what will happen when the country shifts to cash transfers in, say, PDS distribution and food article prices shoot up. The government may dilly-dally in raising the amount of cash subsidy proportionately, quoting a high fiscal deficit. However, if a poor person was getting a few kilos of wheat and rice, he may not had to worry about the complex arithmetic involved in calculating the value of subsidy to be received as cash. Cash transfers are not likely to prove a panacea for the poor, especially where the subsidy amount will shift from time to time, as the prices of commodities will be market-driven.
Y P Issar Karnal
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number