Critics pan the direct benefit transfer (DBT) scheme on two counts. One, it hasn’t delivered till date and, two, if cash is given to the poor or the uneducated, all that they will do is to spend it on tobacco, or alcohol. The first charge is correct, and if the current administrative logjams continue—of beneficiaries not having Aadhaar cards linked with bank accounts—the game-changing project is going nowhere. The second, of the poor being irresponsible, is simply not true, and should give pause to those blindly supporting schemes such as the Food Security Bill.
FE has pointed out earlier that the Bill made little sense given that food consumption’s share in total household-spend is down from 40% in FY05 to 31% in FY12; even within the poor, there is greater spending on vegetables, milk and pulses. Two pilot studies over several villages, by Sewa Bharat and Unicef, gave cash to villages for between 12 to 17 months and studied the impact of this versus control villages where no cash was distributed. While the impact was heightened for tribal villages or those which were predominantly SC, the broad result was the same. In villages where unconditional cash transfers were made, savings level rose, the money received was often spent on making improvements to houses or in constructing new houses. In the case of SCs and STs, where the level of deprivation is higher, more of the cash was used to buy food, but once this need was met, the money got spent on education or on medicines—while 47.4% of cash transfer households had no illnesses for the past 3 months, the figure was a much lower 34.6% in non-cash transfer villages; 28% of those in the cash villages took their medicines regularly versus 1% in the latter. School attendance rose 29% in the cash-villages versus 14% for the non-cash ones, and 49% of children in cash-villages went to private schools versus 30% for the non-cash ones. The list goes on, but the lesson is a simple one—the poor don’t simply blow up their cash and they have needs that go far beyond just getting food. So the state doesn’t need to play the nanny and decide what the poor should get. Perhaps the highest surprise for those who believe the poor are too stupid to be trusted, the money was also used to pay off debt and cash-villagers tended to work more and even started doing work on their own.