How to make cash transfers work

A final point is one we have learned in our Indian pilot cash transfer schemes, which relates to the challenge of financial inclusion. Sceptics say it will not work because only 35 per cent of Indians have bank accounts. True. But we have found that experience of cash transfers soon leads people to open bank accounts or their equivalent.

We recommend that initially, cash transfers are provided in hand, at designated venues, such as the local school. The recipients should be told that within three months they should set up bank or cooperative accounts. Those who do so could be given a one-off incentive of, say, Rs 200. The remainder should receive the cash in hand for a further three months, within which they must have accounts. The local panchayat and voluntary or paid groups should help people set up accounts.

In sum, the success of cash transfers will depend as much on how it is done as on the cash itself.

The writer is professor of development studies at the School of Oriental and African Studies, University of London, and professor of economic security, University of Bath, UK. He is also co-president of BIEN, a global network promoting basic income cash transfers

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus