Wednesday, November 28, 2012





The Government will soon implement the direct cash transfer scheme for beneficiaries of subsidies in food, fuel and fertilizers.

This new scheme will send money straight into the bank accounts of beneficiaries, almost of all of them from the poorest sections, instead of them getting subsidized food-grains, kerosene and fertilizer.

In ideal circumstances this concept of direct cash transfer is most laudable.

But sometimes, from the implementation aspect, due to ground realities, even the best of schemes intended to benefit people, can sometimes can cause unintended by-product results that you never expected. As the say, all good comes with a bit of evil.

Let me give you an example of how this well-meaning direct cash transfer scheme may unintentionally actually turn out to be counterproductive.

I have observed that alcoholism is a burgeoning problem in many parts of India. If you visit a country liquor bar or “deshi daru dukan or desi sharab theka” you will see that even the poorest of the poor drinking liquor and you will notice that many are addicted to drinking alcohol.

One of the unintended by-products of the Direct Cash Transfer Scheme may be that alcoholism will become much more rampant and poor women and hapless children will suffer.

If you give a man subsidized rice he will feed it to his wife and children.

If you give him cash in lieu of rice he may spend the money on something else (like alcohol) and his wife and children will starve.

Yes, a man is likely to spend cash on things he likes (rather than his family needs), especially if it is easy money.

Easy Money is money you get for free, money for which you do not have to work to earn.

Direct Cash Transfer is Easy Money which you get for free without having to do anything.

When you earn money you value your hard-earned money.

When you get money for free, you do not value it that much.

That is why, easy money gets spent more easily on the wrong things, like liquor and other “luxuries”.

In order to prevent the husband from misusing the direct cash transfer money, you may suggest a solution that it will be better if the cash can be transferred to the wife’s bank account.

This may work in some places where women are empowered, but you know what the ground reality situation is in many places – the alcoholic husband may thrash his wife to get the cash from her and spend it on liquor. Thus, apart from giving a spurt to alcoholism this scheme may have another unintended consequence of increasing domestic violence.

As alcoholism becomes much more rampant, the poor women and hapless children will suffer and problems of malnutrition among children may worsen.

Thus, instead of alleviating distress this scheme may end up worsening the misery of the intended beneficiaries and prove counterproductive and the whole thing may boomerang.

In order to obviate this alcoholism problem, maybe this scheme can be implemented in a phased manner, beginning with places where prohibition is in force.

In places where liquor is freely available and drinking is rampant, maybe the women can be given the choice of continuing with the existing PDS or opting for Direct Cash Transfer in their own names.

I have highlighted one issue which came to my mind but there may be many more implementation problems.

I hope the powers-that-be consider all social aspects and ground realities and deliberate on various implementation issues in a holistic manner and tie up all loose ends and plug all loopholes before implementing this direct cash transfer scheme.

Effective Implementation on ground will be the key to success of this ambitious Aaadhaar Card Based Direct Cash Transfer Scheme. 

I hope this scheme is effective in poverty alleviation and genuinely helps the intended beneficiaries.

Copyright © Vikram Karve 2012
Vikram Karve has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this work. 
© vikram karve., all rights reserved.

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A creative person with a zest for life, Vikram Karve is a retired Naval Officer turned full time writer and blogger. Educated at IIT Delhi, IIT (BHU) Varanasi, The Lawrence School Lovedale and Bishops School Pune, Vikram has published two books: COCKTAIL a collection of fiction short stories about relationships (2011) and APPETITE FOR A STROLL a book of Foodie Adventures (2008) and is currently working on his novel and a book of vignettes and an anthology of short fiction. An avid blogger, he has written a number of fiction short stories and creative non-fiction articles on a variety of topics including food, travel, philosophy, academics, technology, management, health, pet parenting, teaching stories and self help in magazines and published a large number of professional  and academic research papers in journals and edited in-house journals and magazines for many years, before the advent of blogging. Vikram has taught at a University as a Professor for 15 years and now teaches as a visiting faculty and devotes most of his time to creative writing and blogging. Vikram Karve lives in Pune India with his family and muse - his pet dog Sherry with whom he takes long walks thinking creative thoughts.

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Aadhar said...

The Aadhaar project is itself so powerful that it has attracted so many people toward it and this is the reason why the response from the people of the country is exceeding the expected value of its regulatory body, the UIDAI. This is a good scheme and will surely curb the cases of corruption in the entire system. We should participate in these types of government programs as they all are beneficial to us at the end.

Vikram Waman Karve said...

Dear Aadhaar - The intention of aadhaar is good but the implementation is very poor. More than 10 months have passed since I enrolled for Aadhaar Card but I have not received my Aadhaar Card so far. I understand that there are many others in Pune in a similar situation. If this is the shoddy implementation situation in a modern city like Pune which is the IT Capital of India I wonder what the state will be in rural undeveloped areas. Giving Food to the needy is much better than giving Cash. Doling out cash is a bad idea as it can be easily misused. Also I do not feel corruption will be eradicated since the corrupt will find new innovative ways of siphoning off the money and may find it easier to siphon off cash rather than siphon off foodgrains.
Let us see. We all want the scheme to succeed. But for this the UIDAI needs to improve its implementation and display efficiency, reliability and promptness in issue of aadhaar cards as a first step. I read in the newspaper that in Pune only 30% of the citizens have been issued aadhaar cards due to tardy implementation despite the UID scheme being started over 2 years ago. The issue of Election Voter Cards was done in a much more systematic and efficient manner.

Vikram Waman Karve said...

@ Aadhaar - One more thing. I think using government machinery would be much better than outsourcing the enrollment which I feel is the main reason for the poor implementation in Pune.