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Direct cash transfer will make us poorer

Thursday, 6 December 2012 - 10:00am IST Updated: Thursday, 6 December 2012 - 12:20am IST | Place: Mumbai | Agency: dna

The Congress-run government's electronic cash transfer scheme decision will destroy the rural social fabric and its economy.

The Congress-run government's electronic cash transfer scheme decision will destroy the rural social fabric and its economy.

As per this scheme, beneficiaries will get cash in their bank accounts instead of earlier subsidies for food, fertiliser, gas, kerosene and so on.  With this money, recipients are supposed to buy nutritional food against current substandard foodgrain from public distribution shops.

The question is: will this really happen?
As a son of a farmer, I've witnessed the rural economy and its nitty-gritty closely. Here, the working class is not like the urban white-collar class that uses resources judiciously. With rural folk, especially the financially weak, once they get money, there are slim chances that it will be spent for the intended purpose.

So, most will squander money on hooch, gambling, matka and buying fancy items. With beer bars and liquor shops omnipresent in rural areas, getting tempted will be easy.
My father (55 years of farming experience) always ensured that payment to his daily wage labourers was handed out to a female member of the family. His experience was that once money is given to a male, it rarely reaches home.

Some claim that the direct money transfer model succeeded in Brazil. But our social, cultural and economic structure is different. Our beneficiaries are still illiterate and live in a male-dominated society. They are not even wise enough to utilise the cash properly.

The scheme might help the incumbent Congress government to come to power for a third time in 2014. But would it want poor families to get devastated? We still have a long way to go before we implement such a direct transfer scheme.

Let's not forget the plight of Navi Mumbai inhabitants who saw a sudden flow of 'money' when developers undertook construction projects in the satellite city about 20 years ago. Land prices soared and the farmers earned huge money. The nouveau riche went on a buying spree – luxury items, including SUVs, and ended up squandering money at liquor bars. Now, many are struggling to make ends meet.

Ditto with special economic zones. Entrepreneurs acquired land at 10 times the prevailing prices. Farmers, who spent their income on modern amenities, have now landed in financial trouble. The rags-to-riches tale of these farmers is back to rags. Now they wish to return to farming, but do not have any land.

Let's hope the Congress' direct-cash-transfer scheme does herald similar tales of sorrow and subsequent regret.

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