analysis of direct cash transfer scheme with case study on bolsa familia programme of brazil

2. HOW SUBSIDIES REACHED PEOPLE

3. DIRECT CASH TRANSFER:INTRODUCTION

4. DIRECT CASH TRANSFERS: HOW
DOES IT WORK?

5. India – DCT Working
INDIA: DCT WORKING
The scheme is supposed to
benefit roughly 200 million
poor,considering every
family on an average has 2
adult members.
The government plans to
cover the target BPL
families and deposit
Rs.3.2 lakh crore per
year in the bank
accounts of 100 million
poor families by 2014
Structure set up by
Prime Minister to
monitor scheme
1. National ministerial
committee
2. National executive
committee
3. Implementation
committees

7. Steps taken
by
government
Weeding fakes
and ghosts
through Aadhar
Payment
Bridge(APB)
Formation of
Central Plan
Scheme
Monitoring
System
Role of Banking
Correspondents
Compatibility of
benefit transfer
system with
banking system
Mapping list of
beneficiaries
under every
scheme with
their bank
account details

8. Advantages
Identification through
Aadhar number
Elimination of
middlemen
Reduction in duplicate
and ghost beneficiaries
Enhances efficiency of
welfare scheme

9. Challenges and Constraints
Challenges
and
Constraints
Over-reliance
on Aadhar
number and
bank account
Safeguard for
maintaining
privacy
No clarity
regarding
banking
operations Role of
multiple
agencies
Last mile,
logistics and
structural
scaffolding

10. What are the Critical Success Factors?
•Government’s efficiency in dealing with the fundamental
issues like the basis of targeting, definition of poverty line &
identification of intended beneficiaries
•Effectively subsidizing the poor for fertilizer or kerosene once
the prices are market determined and are liable to fluctuate
•Devising a methodology to transfer the cash subsidy to the
poor
•State government’s endeavor in taking up fundamental
reforms required in Public Distribution System (PDS)
What are the critical success factors?

11. Is DBT scheme a poll plank?
•Congress wants to cash in on cash transfers.
•Though the announcement date of DCTS was in September,
UPA waited for two months to unveil details of the scheme for
the poll season to arrive.
•BJP had written to the Election Commission saying the
government should withdraw the announcement of the plan
until the polls were over in Gujarat and Himachal Pradesh in
response to which the government said that the Finance
Minister in his budget speech made the first announcement
about the scheme on March 16, 2012.
•DCTS widely criticised by Mayawati, CPI(M) and Arvind
Kejriwal.
IS DCTS A POLL PLANK?

12. WORLD BANK REPORT: DOES THE IMPLEMENTATION OF DIRECT CASH TRANSFER
SCHEMES HAVE AN EFFECT ON THE VOTING PATTERN OF THE CONCERNED
CONSTITUENCIES?
Beneficiaries
vote for the
party which
implemented
the plan
Non –
Beneficiaries
in poorer
places vote for
party, in hope
that it would
implement
plan there too
Every plan of
the
government
has a domino
and a ripple
effect. A good
policy is a
good gesture.
And a good
gesture gets
you the votes.

13. COGNITION
The Opposing
Party did
decently in
poor places.
Failed with the
poor people and
definitely not
with the poor
people in the
richer area
Positive
Correlation
between voting
patterns in favor
of the party
implementing
Cash Transfers

14. Inferences from the world bank report
in the Indian Scenario.•The political parties which oppose the Congress on bringing
the programme at a time so close to the Indian Annual
elections is technically correct. The favorable voting effect is
affected by the direct cash transfer scheme.
•Conjectures on possible political rewards linked to
participation in CCTs have been reported following
presidential elections in Ecuador, Peru, Mexico and Brazil
•The World Bank study concludes that voters respond to
targeted cash transfers and that these transfers can foster
support for incumbents.
Inferences from World Bank Report in Indian scenario

15. OUR TAKE ON DCTS
OurtakeonDCTS
DCTS can reduce leakages
Cash transfer is a step
forward but have slow
pace
DCTS can help control
inflation and fiscal deficit
DCTS may hurt girls and
children
Cash transfer is more
efficient than PDS

16. SuggestionsSUGGESTIONS
Transfer of cash
subsidy

17. BOLSA FAMILIA PROGRAMME, BRAZIL: A SUCCESS STORY
EVOLUTION
In January 2003 President Lula promised to eradicate hunger and fight poverty in his
inaugural speech and in fact, conferred high priority to the Zero Hunger strategy. This
strategy included several interventions / programs, including the Bolsa Familia Program.
Widespread belief that the
people are poor due to
the fault of the unjust
society
The 1988 constitution
established a legal
foundation on social
assistance as guaranteed
rights for the needy- and
also an obligation of the
state to provide health
and education services,
among others, the access
to which is established as
a basic right of all citizens
BFP
CREATED
2003

18. Motivate families to ensure
their children complete a
secondary education
Keep families from entering
children under 14 years old in
the labor market
Motivate these families to use
health services, especially the
pregnant women and children
under 7 years of age
In the long run, the aim is to
break the intergenerational
poverty cycle
AIMS

19. IMPACT

20. Conclusion
“To empower people, you have to supplement money with
information and community building. Information or direction,
on how to utilize money and a community, to give them a
sense of collective unit, essentially meeting the goal of
economical distribution of subsidy”
Direct Cash Transfer Scheme is, in P. Chidambaram’s words, a
game changer. Although not entirely true in the present, it
could be for the benefit of the country, as long as we
efficiently ensure the “AAPKA PAISE AAPKE HAATH” motto is
achieved.
Conclusion

21. References
• 1. Dutta, Puja, Howes, Stephen and Murgai, Rinku, 2010. “Small but
Effective: India’s Targeted Unconditional cash transfers,” ASARC Working
Paper18
• 2. Gangopadhyay, Shubhashis, Lensink, Robert and Yadav, Bhupesh, “Cash
or Food Security through the Public Distribution System? Evidence from a
Randomized Controlled Trial in Delhi, India”
• WORLD BANK REPORTS
Arnold with Conway and Matthew Greenslade,Department for International
Development, Policy Division 2011, Cash transfers.
United Nations Development programme, India : Cash transfer for alleviating
human poverty: Relevance in India