Cash transfers: There is a way out
States such as Kerala have been using the postal service to deliver cash. Others are experimenting with banking correspondents and local governments for cash distribution. These experiments are a reminder that the best way to reach people is for the government to go local. To administer cash transfers, states should be allowed to work out the delivery mechanism. Some may choose to do this through the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) where rural returnees are high in number. Others may want to implement a direct cash transfer or use the funds for an urban employment programme. These are decisions best left to the states.
This is an illustrative list of ways in which cash transfers can be made. The point is: Don’t wait for the perfect database. The bare bones are in place. It can be done now.
So what has stopped the FM? The obvious answer is political will and associated choices that prioritised fiscal conservatism and supply-side measures. But this politics found legitimacy in what my colleagues Mekahala Krishnamurthy and Arkaja Singh described as the “hardwiring of our welfare architecture” that dominates bureaucratic perceptions of welfare programmes. The welfare architecture has been built on the back of deep suspicion of people and the bureaucracy. The need to curb discretionary behaviour of corrupt officials and local elites has entrenched the belief that local discretion must be curbed. Panchayats may be best placed to identify the poor and deliver benefits, but the fear of corruption has meant we’ve never trusted them; preferring to device centrally-controlled databases and beneficiary lists. No surprise then that, in the absence of a database, the bureaucracy couldn’t imagine how to transfer cash to those who never made it to a database. The only concession given was an increase in MGNREGS allocations. But here too, absent a new imagination, databases will prove a hurdle for returnees who do not have job cards and are not on the centrally controlled e-muster roll to participate.
This limited bureaucratic imagination has legitimised the government’s refusal to find solutions that can ensure protection for those hardest hit by the lockdown. The choice of emphasising reforms over economic survival is flawed. The lockdown has exposed faultlines in society, and the extreme vulnerabilities of most Indians. Reforms are necessary but, first, India needs to repair as an economy, a society and a democracy. Relief for survival is a moral imperative and an economic necessity. The failure to do so will hurt the country far more than the charge of fiscal profligacy and some corruption in an emergency.