PHOTO: Associated Press
The ruling government's much touted Direct Benefit Transfer (DBT) scheme has the potential to wipe out ghost beneficiaries and plug leakages in the subsidy framework. But it also runs the risk of excluding women.
While DBT is yet to take off successfully in most government-run schemes, it seems to have worked out well for LPG cylinders
. With pilot projects having been successful, the plan now is to roll it out across 289 districts - almost half of the country - by January next year.
The scheme has already been launched in 54 districts, covering 21 million LPG consumers. A total of Rs 272 crore in cash subsidy has been transferred through 6.23 million transactions into the bank accounts of LPG consumers in these districts so far.
The cash subsidy is transferred
for the LPG cylinders directly into the bank account of the LPG consumer. The consumer then buys the cylinders at the market rate.
No doubt, in a nation where nearly 40 per cent of the rural population has no access to financial services, the task of ensuring that every LPG consumer has a bank account to which the cash can be transferred, is itself a daunting one.
The fact that, in an average household, the male member is more likely to have a bank account than the female, imposes another hurdle. Bank account penetration in India is currently at 35 per cent - 43.7 per cent of men and 26.5 per cent of women have them. If the subsidy money is transferred to the man's account, it is he who will decide how to spend it - whether on a gas cylinder or something else entirely.
Several studies, and the experiences of self-help groups such as SEWA have repeatedly shown that when women get spending power, the entire family benefits. Women are more likely to spend on the education and nutrition of family members and take initiatives to ensure a steady flow of income. Men are more likely to use the money to buy themselves alcohol and in other related activities.
Giving millions of men access to cash without having had to work for it could affect the socio economic landscape for the worse. It could potentially lead to more violence, abuse, and crime.
There are schemes that specifically target women.
In the Annshree Yojana, for instance, launched early this year in Delhi, which provides for Rs 600 per month to economically weaker sections, the money goes into the bank account of the eldest woman of the household. Of course, it's been challenging, because an overwhelming majority of the women do not have bank accounts and that has delayed an effective rolling out of the scheme. But ultimately, there is a greater chance that the money transferred will indeed be used for the purpose it was intended.
There is enough evidence to show that just doling out cash for subsidy cannot correct a faulty structure. The government needs to think beyond its 'cash for votes' strategy.