| |
|
|
The Situtational Dimension of Cash Transfers:
The Inflationary and Differentiated Dimensions of
the Proposed Changes in Food Subsidies in India |
|
Narendar Pani |
|
The debate on cash transfers has tended to focus on the means of subsidizing the poor,
particularly the possibility of reducing leakages in the Public Distribution System (PDS). Following
the capabilities approach, this paper focuses on the ends of the policy, looking at cash transfers
in terms of the impact on individuals in households. Through a formal statement of the proposed
shift in India from a system of food subsidies embodied in the price of a commodity to one
of cash transfers, the paper identifies the macroeconomic dimensions of this shift as well as
the diverse impacts on households facing different realities. The macroeconomic effects include
inflationary pressure, the possibility of a worsening of the crisis of under-nutrition, and increased
risk for farmers hurting the long-term prospects for food security. And the varied effects across
different poor households also raise the distinct possibility of the poorest being the most
adversely affected by the shift to cash transfers. |
|