ET2019 ⁽¹⁶⁾

Read full article In one important respect, Budget 2019 breaks new ground. For more than a decade, I have argued that apart from a compelling reason for an alternative scheme, social spending must take the form of cash transfers. Such transfers empower the beneficiary rather than bureaucrats and agencies that get hired to distribute in-kind transfers. Armed with the cash, it is the beneficiary who chooses what to buy and from whom. Yes, up to 5% beneficiaries may blow up the money on liquor, but that is no reason to punish 95% responsible citizens. Therefore, it is heartening that for the first time in India’s history, a government scheme has recognised the sovereignty of the beneficiary. Under the newly announced PMKISAN programme, GoI would unconditionally transfer in cash a sum of Rs 6,000 a year to each of 125 million marginal and small farmers. GoI has allocated a solid Rs 750 billion for this purpose in the interim budget. If the idea of cash transfers gains further acceptance, India can make huge gains in terms of beneficiary welfare, as well…