News / Asia

    India Replaces Subsidies for the Poor with Cash Transfers

    Impoverished and homeless people stand in a queue to receive free food from a volunteer organization in front of a temple, in New Delhi, India, January 1, 2013.
    Impoverished and homeless people stand in a queue to receive free food from a volunteer organization in front of a temple, in New Delhi, India, January 1, 2013.
    Anjana Pasricha
    In India, the government has begun rolling out an ambitious plan to replace subsidies with direct cash payments in a bid to eliminate graft. The government says the cash transfer plan will benefit millions of poor people, but questions have been raised about how it will work.

    Since the start of the new year, 245,000 people across 20 districts in India are getting pension and scholarship money transferred directly into their bank accounts, instead of having to wait to receive it from post offices or bank officials.

    Officials say when fully implemented, the cash payments will help fix a broken-down system for the delivery of subsidies that amount to nearly $58 billion a year.

    The impact of these welfare measures on reducing poverty has long been questioned, because subsidies for food and fuel are often siphoned off by corrupt officials or people are forced to pay bribes to receive them.

    India’s Finance Minister P Chidambaram calls the cash transfer scheme a “game-changer” for poor people. “There will be no leakage. There will be no rent seeking anywhere in the system. The beneficiary will not have to pay any kind of money to get his benefit,” he explained.

    India is modeling the scheme after efforts in Brazil and Mexico where such experiments have been successful. It hopes to use a biometric electronic number being given to every citizen to transfer the cash into their bank accounts.

    But doubts have been expressed about how the scheme will work in the vast country of 1.2 billion people. Only 40 percent of Indians have bank accounts and only 36,000 out of the country’s 600,000 villages, where the poorest live, have banks.

    Even some people who have bank accounts have voiced their preference for getting food rations rather than cash. One of them is Kanta Das. She lives in a poor neighborhood in New Delhi and participated in an experimental program to study the switch from food rations to cash.

    Kanta says her family opted to receive rations in place of cash, because the money was often spent by household members on other items. As a result, she says, her young children got less food.

    The government says it is proceeding with caution and for the time being, it will not switch to cash transfers for food and fuel subsidies.

    However, Finance Minister Chidambaram hopes the cash transfer scheme will save the government billions of dollars by eliminating fake beneficiaries and middlemen.

    “No one person can receive two benefits under the same scheme using two identities and no one can falsify an identity and get a benefit," he asserted. "That will result in considerable savings to the exchequer. The efficiency gains are incalculable. Today the system has to go through several layers, it is a maze.”

    Opposition parties have voiced concerns about the cash scheme, calling it a ploy to buy votes before general elections which are due next year.

    The government says that by the end of the year, it hopes to expand the new policy through most of the country.

    You May Like

    Video For Many US Veterans, the Vietnam War Continues

    More than 40 years after it ended, war in Vietnam and America’s role in it continue to provoke bitter debate, especially among those who fought in it

    Video Newest US Citizens, Writing the Next Great Chapter

    100 immigrants graduated Friday as US citizens in New York, joining the ranks of 680,000 others every year in cities across country

    Family's Fight Pays Off With Arlington Cemetery Burial Rights for WASPs

    Policy that allowed the Women Airforce Service Pilots veterans to receive burial rites at Arlington had been revoked in 2015

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora