The term that has been in the news recently is “direct benefit transfer” (DBT). This is meant to make the transfer of some welfare benefits transparent and more efficient. DBT has been successful in the case of LPG subsidy and, in one year, the government has been able to save as much as Rs 12,000 crore. While DBT is aimed at improving the efficiency of the management of subsidies, UCT or UBI is an alternative way of thinking about welfare assistance itself. It is an attempt as much to improve delivery as it is to address inclusion and exclusion errors that plague the current targeted social assistance. Swamy takes none of these nuances into account and asserts that “Cash transfers are now being positioned as a magic solution to achieve development goals in health, education, nutrition and food security…” What type of cash transfers is she referring to? And who is positioning it as a magic solution? Which of the pilot studies say so?

Chief Economic Advisor Arvind Subramanian has said DBT is a “gamechanger”. As far as subsidy management is concerned, this is indeed true. Saving nearly $2 billion  without hurting any of the stakeholders certainly qualifies for a…continue reading



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