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Friday, January 18, 2013

Cash Transfer in India-Will it help migrant workers?

Umi Daniel

The present Government at the Centre has been quite vocal and desperate on launching Conditional Cash Transfer in India. Mr. P.Chidambaram, The Finance Minister of India has termed CCT as a big game changer for fighting corruption and protecting public money. It is claimed that under the regime of CCT (Conditional Cash Transfer), cash will flow directly to the beneficiary without any leakage. However, the only apprehension the government is having is to reaching out to the last mile? The non banking service area is still a huge challenge for the government to transfer DBT (Direct Benefit Transfer). According to  RBI  only 40% of the population in India have access to banking facilities. Out of 6.4 lac villages, the presence of bank branches with full-fledged services is available only in 34000 villages and recently another 73000 villages are covered under Banking Correspondent model.

It is almost 7 years since MGNREGA was introduced as an ambitious flagship programme of the Government to provide assured wage employment to the people. The wages under MGNREGA has been transferred to the beneficiary directly into their bank or post office accounts or else transacted through BC (Business Correspondent) model. However things are yet to take shape to streamline the system of wage transfer. Large scale irregularities and grievances like; late transfer of money, fake withdrawal, discriminatory attitude  of bank officials,  existence of middleman in banking transaction are today huge grey areas which is creating concern for the government.  Prior to the MGNREGA the average customer footfall in a rural bank was drastically low. But today, thanks to MGNREGA, the numbers of accounts holders both in post office and banks have swelled 4-5 times.  Today we have a newer generation of customer particularly illiterate, poor, working class men and women are having a bank account. However, the banks are not well prepared and don’t know how to provide quality and equal services to these people.  Government is aware about the ground situation and to tackle this problem, there are plans to setup ultra banks in rural area which will operate as representative or business correspondence model.  It means, a one-man bank or virtual banks will be operationalise for rural folks.   

Of late, the RSBY, ( Rasthriya Swastya Bima Yojana) has emerged as the first national health  insurance scheme in India in 2007. It is considered as high tech and deal with cashless health insurance programme for the BPL and other vulnerable people.Rrecently the World Health Organisation carried out a assessment on the efficacy of the programme. The Assessment reveals that more than 50% of the enrolled RSBY beneficiaries are incurring out of pocket cost (OoP) on their health. The report also goes onto question accountability of insurance Companies towards its clients particularly the poor BPL families. It has a special provision for supporting migrant and left behind family member’s health needs. However, when we observe the same  in the migration prone area of Odisha, the scheme is yet to show any significant success for the migratory population and people don't know much about enrollment, benefit and procedure of claims.  

Both MGNREGA and RSBY have no doubt have emerged as strong  pro-poor branding programme with huge budgetary allocation by both the Centre and the State. On the contrary it has created a huge business opportunity for the banks and insurance companies in India to rollout their business in rural sector. Interestingly, MGNREGA has gave birth to the Business correspondent Model in which the private individuals have been allowed to handle public money. At the same manner, RSBY has backed up the insurance company with 100 % assured premium to run the health insurance scheme in India. The smart-card cashless health insurance scheme is today much depends on the whims and mercy of private insurance companies and bureaucrats rather making it a people centric social assistance security programme.

It looks, government is in a hurry to convert more and more subsidy based schemes into monetary benefit without realizing the ground reality.  Aadhar, a multi crore IT & biometric enabled unique identity card has been seen as panacea for the DBT for the poor people. Although Aadhar based identity card has been rolled out in India and already enrolled huge number of people, but Aadhar is yet to be debated and approved in Parliament. It may get into rough weather if the Parliament rejects it. Other major debate is on food entitlements vis-à-vis cash transfer. There are political as well civil society opposition against government plea for converting food entitlement into cash transfer will lead to unequal food distribution among the family. India has the oldest and largest food security programme through its Pubic Distribution reaching out to the poorest people in India both at rural and urban locations. Progrramme such as school meal programme, ICDS nutrition programme and emergency feeding programme is reaching out to a large number of most needy and vulnerable people living in rural and urban locations. Slightest deviation on these food entitlements and converting the same into financial benefit will result into huge negative impact on the food security of people.  

The much waited food security bill is yet to be tabled in the Parliament. The Cash, vis-à-vis food entitlement will definitely figure in the discussion and there is bound to have different position on the issues on the floor of Parliament. India’s most urgent and priority need is to handle the growing food insecurity and malnutrition issue which is a national shame. While world over there are apprehensions are raised about the realistic target of achieving the Millennium Development goal of making hunger half by 2015. India is no exception and the target for halving hunger looks difficult. India is yet to devise a system to manage the overflowing good grains grains rotting inside the Food Corporation of India’s Godown. The farmers are yet to get Minimum Support Price for their food grain. In 2012, the IFPRI ( International Food Policy Research) ranked India 65 in a list of 79 countries where serious hunger and malnutrition persists. With over 43% of babies suffering from malnutrition which ranks India under Ethiopia and Bangladesh and yet large number of people under poverty line, the decision to do away with food and convert the same to cash will be counter productive.  

Finally, will Cash Transfer help the seasonal migrant laboueres in India?  My answer will be yes and no. RSBY health insurance is a revolutionary programme and I think may  certainly benefit the migrant if it is made universally accessible. Portability of basic entitlement and services in case of inter-state and intra state migrants are another key policy area which the government should look into. Migrant will be happy to have their entitlement or benefit coming directly to their bank account while they are on the move. But the worst sufferers will be the left behind people like old, disabled and diseased who may be deprived of accessing the household based subsidy at source if the head of the household is away. Today thousands of inter-state migrants are facing difficulties in remitting their earning from urban location to their villages through banks and ending up in sending the money through hawala or couriers. I think, the banking should come for the rescue of these poor migrants prior to introducing CCT. As per a study conducted by NABARD, the banks are losing out more than 700 crores since there are no formal banking is available for migrant workers to remit their money.

It is a constitutional mandate of the government to provide food and social security to the most vulnerable and poor in India. Government is also held accountable if the service provider fails to discharge its duty. However, today more and more corporate and corporations are entering into the arena of providing social entitlements and basic services to the people in India. The banking and insurance for poor is one such area which the government has opened up the private banks and insurance companies to deal with the public money. 

1 comment:

  1. This is valuable information for Indian who face problem with transfer money. fx compared

    ReplyDelete