Socio Research & Reform Foundation

As the Govt moves closer to adopting Cash Transfer model instead of providing subsidized food grains, there are continuing debates. For example, even questions are being raised which option is better cash transfer or food coupons.

In a survey undertaken by well known economist John Dreze, some major findings have been identified. It has observed that there is a reluctance for Cash Transfer schemes particularly areas with a well-functioning PDS. In most cases, the reasons pertained in one way or another to food security – an overwhelming concern for poor households. For instance, many respondents were worried that money might be misused and further it might lead to food inflation. Also, there are apprehensions that traders might raise prices if the PDS is closed. States like Chattisgarh have strongly opposed the idea of Cash Transfers. They say, it is better to reform PDS.

It is only in Bihar and parts of Uttar Pradesh, where PDS is not working, people showed interest in cash transfers as a possible alternative.

PDS or Cash Transfer!!! The debate is still going on. Anyone would like to share their experiences.

Generally it is acknowledged that NREGA has partly succeeded in providing money to manual labour in rural areas (reflected in reported shortage of farm labour in Punjab from other states); however often it is felt that the money so provided is not being productive, since it does not produce productive assets.

Well in this regard, story of Melghat, a remote hilly area in Vidarbha’s Amravati district, is worth recounting. The area received much focus in recent times due to the severity of malnutrition. But the region has gained another image in recent time – a success story under NREGA. First the challenges, Melghat are a remote area having low penetration of banks. Since under NREGA payment can only be made into an account, the Administration took the services of Dept. of Post, through their 7 sub-post offices. The post offices pose additional challenges for high volume transactions; however the zeal and resolve of the district administration and Dept. of Post officials in the area helped surmount these problems.

One of the major innovations that the district administration undertook is the nature of works resorted. Instead of tree guards and side roads, the administration allowed stone weir / bunding structures on individual farms. This has helped in prevention of soil erosion, better rain water seepage. Over 500 wells have been created for individual beneficiaries, desalting of water bodies and similar projects, helping the agriculture community of the area. It also provided a pool of engineers for preparing work-estimates.

Many of the beneficiaries are all praise for the administration, since the scheme has resulted in better agriculture yield, sometimes in even two crops, and hence has reduced migration to virtually nil.