Feature Article

The Government of India’s 15-year old Accelerated Irrigation Benefits Programme has come under much-deserved criticism for all-round non-performance.

Cash transfers are now suggested by many as a silver bullet for addressing the problems that plague India’s anti-poverty programmes. This article argues instead for evidence-based policy and informed public debate to clarify the place, prospects and problems of cash transfers in India.

Oportunidades, Mexico’s conditional cash transfer programme, which is linked to the education of children of a certain age and provision of health services, is often described as an outstanding success. In 2011 it will cover 5.8 million families.

After describing the origin, the main features and some of the impacts of Bolsa Família, a conditional cash transfer family welfare programme that has become one of Brazil’s showpiece achievements, this essay discusses the changes in the programme over time as well as the current and future challenges.

The design of public cash transfers involves a careful balancing of policy priorities and objectives. Variations in the rationale for a conditional cash transfer shape benefit amounts, coverage, duration of programme participation, targeting practices and the definition of conditionality.

The current perception that cash transfers can replace public provision of basic goods and services and become a catch-all solution for poverty reduction is false. Where cash transfers have helped to reduce poverty, they have added to public provision, not replaced it.

There is a case to be made for cash transfers replacing the sale of food through the public distribution system. This article argues that cash transfers offer many advantages over in-kind food transfers, and that their design can address potential pitfalls pointed out by critics.

The National Food Security Bill, as drafted by the National Advisory Council, contains various reforms to reduce theft. However, the track record of previous legislation does not inspire confidence that the proposed reforms will be sufficient to ensure secure access to food for those who need it.

The Government of India has announced that subsidies on fertilisers, kerosene and liquefied petroleum gas will be replaced by cash transfers to end users. A close examination of the objectives of the subsidies in fertiliser and kerosene and the implications of the shift raises some challenging questions.

This paper attempts to review the recent performance of the economy and lists the priorities and challenges for the Twelfth Plan. The Indian economy will enter the Twelfth Plan period in an environment of great promise, but the next five years will also be a period of major challenges.