Pro-poor schemes get a thumbs-up from plan panel | india | Hindustan Times
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Pro-poor schemes get a thumbs-up from plan panel

The Planning Commission has backed two schemes revolving around this principle: a national maternity benefit scheme, and a cash-for-ration scheme in Delhi. Chitrangada Choudhury & Chetan Chauhan report.

india Updated: Aug 27, 2009 00:08 IST

The Indian state’s controversial experiment with conditional cash transfers as a pro-poor measure has received a boost.

The Planning Commission has backed two schemes revolving around this principle: a national maternity benefit scheme, and a cash-for-ration scheme in Delhi.

The performance of the two programmes could spark a wider debate on how to fundamentally reform India’s Rs 1.4 lakh crore (Rs 1.4 trillion) subsidy sector, widely acknowledged to be plagued by leakage, unaccountability and inefficiency.

Policymakers here are studying Latin American examples such as Brazil.

The schemes are targeting two areas of human development—health and nutrition—where India currently performs very poorly, by trying to directly reach those who need it the most.

For example, the maternity benefit scheme, with a provisionary allocation of Rs 9,000 crore (Rs 90 billion), will transfer Rs 4,500 to any pregnant mother over the age of 19. Targeting around 100 districts (to begin with), which report high malnutrition rates, the money will be transferred over six or nine months into a bank account opened in the woman’s name.

“The cash transfer will clearly not eliminate poverty. But during those crucial months for the foetus and the newborn baby, the money is meant to help relax the financially strained conditions a mother might find herself in - to help her take a break from hard labour, to be able to spend more on food, and to allow her body to recover after delivering a baby,” said Santosh Mehrotra, head of the Planning Commission’s development policy division.

The second scheme also envisages transferring Rs 1,100 per month to women in one of Delhi’s nine districts. This is the first bid to replace money for grain under the current Public Distribution System (PDS) of ration cards and shops, which are meant to take a Rs 52,000 crore subsidy annually to Below the Poverty Line families.

Chief Minister Sheila Dikshit believes the monthly transfer provided to each woman would be enough to purchase at least 30 kg of foodgrains in the open market. “Every day I get 15-20 complaints of poor people not getting ration under PDS. The food subsidy is benefitting the retailers, not the poor,” she said.

An internal plan panel document has however expressed reservations that the food subsidy given as cash will not be distributed to all family members, especially the discriminated girl child, a concern seconded by economist Amartya Sen at a recent meeting in Delhi.