The paranoid crowd needs to read more. They might learn something.
Ahluwalia, the powerful deputy head of the national planning commission, for example, says he will allocate billions more rupees to UID as “the money will be more than fully covered from efficiency gains from government schemes”.
Total costs are rising as UID expands: its budget has more than doubled from nearly 32 billion rupees ($614m) for the first five years, to over 88 billion rupees for the next phase. But the government’s chief economic adviser, Kaushik Basu, among others, agrees that savings by “plugging leakages”—that is, stopping huge theft and waste in welfare and subsidies—will be “very big, very beneficial”.
Last week Karnataka state claimed that by paying welfare direct to bank accounts it had cut some 2m ghost labourers from a rural public-works project.
Along with others, they also oppose the logical next step in welfare reform that UID enables. Once recipients have bank accounts, India can follow the likes of Brazil and replace easily stolen benefits in kind, such as rations of cheap food and fuel, with direct cash transfers. Not only do these cut theft, but cash payments also let beneficiaries become mobile—for example so they can leave their state to seek work, while not jeopardising any benefits.
A shift to cash welfare would have to ensure that mothers benefit most, not feckless fathers. And perhaps only as Indians grow more urban, mobile and well-connected will they see the full advantage of cash over rations. But for all the headaches, applying the UID to an expanding and reforming welfare system opens the way for profound social change. Indians need to get ready.
Total costs are rising as UID expands: its budget has more than doubled from nearly 32 billion rupees ($614m) for the first five years, to over 88 billion rupees for the next phase. But the government’s chief economic adviser, Kaushik Basu, among others, agrees that savings by “plugging leakages”—that is, stopping huge theft and waste in welfare and subsidies—will be “very big, very beneficial”.
Last week Karnataka state claimed that by paying welfare direct to bank accounts it had cut some 2m ghost labourers from a rural public-works project.
Along with others, they also oppose the logical next step in welfare reform that UID enables. Once recipients have bank accounts, India can follow the likes of Brazil and replace easily stolen benefits in kind, such as rations of cheap food and fuel, with direct cash transfers. Not only do these cut theft, but cash payments also let beneficiaries become mobile—for example so they can leave their state to seek work, while not jeopardising any benefits.
A shift to cash welfare would have to ensure that mothers benefit most, not feckless fathers. And perhaps only as Indians grow more urban, mobile and well-connected will they see the full advantage of cash over rations. But for all the headaches, applying the UID to an expanding and reforming welfare system opens the way for profound social change. Indians need to get ready.
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