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Case for Conditional Cash Transfer

Santanu Sengupta
Santanu Sengupta

There is a great debate as India's Think tank wants to speed ahead with Cash Transfer or Benefits Transfer to the excluded.Read on

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Effective Conditional Cash Transfer as a Development Tool in India 30th Skoch Summit 14th Thinkers & Writers Forum Hotel Shangrila September 18-19th 2012 New Delhi Santanu Sengupta Secretary, Change Innovators Society & Director, ACMFI - African Centre for Mobile Financial Inclusion
Revisiting CCT : Definition CCT is an effective way of government spending, like education, healthcare, particularly on Women folks to come out of their vulnerability during child birth, sanitation, road development and community projects, where the beneficiaries earn wages or stipends against a specific set of tasks. Modern day CCT is highly structured, following the success of the Bolsa Familia programme in Brazil and sweeping Latam Ms Pamela Cox deputed as ADB Vice president in charge of Asia Pacific at Manila, Philippines for embarking on a mission mode programme in the Far East.
Cont Outside China, Indonesia, Indo-China, Vietnam and now even Myanmar is in big focus for such financial inclusion as a pivot for further equitable & inclusive growth in the region. But real test lies in South Asia, a melting pot of 1.7 billion people is the next biggest common market of all. And everything boils down to Indias story of inclusion & by skillful adoption of CCT. The steps taken in this direction, with UID, cashless payments through MNREGS, various state government initiatives to stop the huge unproductive leakages, IS a questionable, debatable issue leading to this important question. Will CCT work in India?
Various forms of CCT A brief mention has been made about why these programme now being called CCT as an ECONOMIC instrument whereby the governments of varying ideological bias has been increasingly relying on such instruments as a public policy. The underlying theme is pretty simple.
- Address the need of the vulnerable section and provide budgetary support for them - Instead of generalized subsidy it is targeted and designed and aimed at delivering to the targeted segment of the society. - It is designed and made in such a manner that the benefits that accrues to the beneficiaries are discernible to them and they willingly embrace it with renewed vigour. - Governments have by and large by these methods minimized leakages and have been able to lessen the intermediation and wastage. - By doing so these targeted investments have been helping form long term assets to a country, saving costly outages, and mismanagement of development funds, reduction of cost, and most of all a prosperous healthier society.
Replacement of Archaic law & regulations by more modern practical enactment . - Usage of ICT platform & enabling environment & electronic payment gateway. - Delivery mechanism of cash, direct to the beneficiaries. - Attachment of conditionalities easily identifiable by the beneficiary to induce her/him to use. - Multilayer propagation and capacity building programme popularize the programmers' for awareness development - Strong supervisory control at various levels so that the programme becomes a success story. Continuous up-gradation and changes to the initiated one following rapid transformation and changing needs of the beneficiaries.
DESIGNING CCTS
Case for Conditional Cash Transfer
How it worked in other countries CGAP has a series of country report on G2P, highlighting how the Latin American countries have managed their social inclusive programme through effective CCT. The report by Sarah Rotman and her team has been initially documented in 2009 and later published in the form of a PPT For general viewing in 際際滷 share. I am drawing some relevant slides and references from the country reports on Brazil, Mexico, Colombia & South Africa.
We find that during Lula governments first term, 6.57 million were enrolled out of 197 million population or barely about 3%. In the interim 2006-2009 it remained in a plateau at between 10.97 10.94 10.56, and then spurted further to 13 million at the end of 2011, still below 10% of the overall population. But the impact and the effectiveness of 3 conducted programmes, that President Lulas workers Party continued to hold on to poor impressively even on to the next incumbent Dilma Roussef, successor of President Lula. A brilliant public policy shift, initiating a worldwide trend. WHY SO? Let us refer to the report by CGAP
We find that during Lula governments first term, 6.57 million were enrolled out of 197 million population or barely about 3%. In the interim 2006-2009 it remained in a plateau at between 10.97 10.94 10.56, and then spurted further to 13 million at the end of 2011, still below 10% of the overall population. But the impact and the effectiveness of 3 conducted programmes, that President Lulas workers Party continued to hold on to poor impressively even on to the next incumbent Dilma Roussef, successor of President Lula. A brilliant public policy shift, initiating a worldwide trend. WHY SO? Let us refer to the report by CGAP
Brazil Case Study - 1
Case for Conditional Cash Transfer
Oportunidades which was started during the 1994 financial crisis enrolled roughly 300,000 people initially has now covered more than 30 million Mexicans till 2010.
Mexican : Oportunidades Mexican : Oportunida
Case for Conditional Cash Transfer
Mexican : Oportunidades
Case for Conditional Cash Transfer
Prognosis : From Cash to Plastic & Savings
SOUTH AFRICAN CASE STUDY
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
What are G2P payments? Government-to-Person Social Safety Net (G2P) Payments (SSN) Programs Employee Payments Social Transfers Noncash Support (wages, pensions) To better off Conditional Food employees Transfers To low-income Unconditional Price Subsidies 170 million employees Transfers Workfare Fee Waivers MILLIONS
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
Case for Conditional Cash Transfer
WHO ALL ARE IN THE FRONT
Towards Electronic Payments Over Time 33
WHO ALL ARE IN THE FRONT
Who Plays what role Rural Scene URBAN SCENES Data Centres Citizens
TARGET CLIENTS / BENEFICIARIES Business Centre People Govt Business People Centre Money Transactions
CCT: RelevanceRelevance to India to India We have examined some major initiatives across the world except the P4 G2P programme which has significant CCT progamme inbuilt into it in Philippines. In Indias case it is imperative for us to remember that India happen to be one of the foremost countries in the world which has a huge subsidy based social inclusion programme totalling close to a hopping Rs 135000 crore or close to $ 27 billion. Despite that on individual scale our Human development index has been pretty poor and perhaps the worst amongst the BRICS nation.
India perspective : continued - Like PDS intended for the poorer section finds its way into the black market and poorer section suffers. Same applies to subsidized Kerosene, Cooking gas and many other central or state benevolent progammes which as struggling to be effective tool for looking after the poorer section as there as hardly any effective frame work for monitoring the pooling essential data for the beneficiary clients. - During the 1st UPA regime it forged the ideation of NREGS as discussed and UPA tentatively started 100 days guaranteed work in about 100 districts in the country as pilot phase. Despite sketchy initially it later transpired to be a grand success for the UPA.It has extended to other remaining Districts. Cont
- But in the practical discourses or implementation time both identification as also awarding of jobs, work audit, and finally payment to the beneficiaries is delayed beyond reasonable limits. - Due to all these negative aspects Indias policy planners have been mulling actively using CCT as a tool to minimize all these negative aspects of the development assistance programme buoyed by the success story of the NREGS programme.Let us examine in the light of the current CCT proliferation who CCT can play an upshot to the early success of MNREGS and beyond, and that it cannot. - MNREGS can be the mother of all CCTs, if it could be streamlined effectively as the Think tank is seriously trying. Hence I would not like to delve deep into its functioning, because MNREGS is bringing gradually a huge numbers of core competent areas like ICTs & management for financial services delivery in place. ..Contd..
Conclusion In continuation of the big bang reforms push the UPA II is trying to fast track reform agenda in to parallel tracks while trying to give a direction to the beleaguered economy . In the social sector the policy is : 1) Target the needy and make sure the Safety net covers reaches them 2) Attack leakages, pilferages and wastage thereby reduce subsidy burden . But in doing fine balancing act whether it actually does manage to do it or bring further confusion and burden to the common man will be an acid test of the regime. But it is possible to emulate this paradigm shift better than even the LATAM BRETHREN, despite their early start they have, if MNREGS, UID, eGov, Financial Inclusion and many other parallel initiatives are harnessed under a Centrally monitored programme with very stringent evaluation & impact measurement tools to make it work on the ground. CCT part 3 will be the final series culmination in the next Skoch programme prescribing ho it can be effectively work in India to a better managed inclusive society.
Thank You Santanu Sengupta Director, Corporate Affairs and Finance ACMFI - African Centre for Mobile Financial Inclusion santanu@acmfi.org/acmfi2010@gmail.com

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Case for Conditional Cash Transfer

  • 1. Effective Conditional Cash Transfer as a Development Tool in India 30th Skoch Summit 14th Thinkers & Writers Forum Hotel Shangrila September 18-19th 2012 New Delhi Santanu Sengupta Secretary, Change Innovators Society & Director, ACMFI - African Centre for Mobile Financial Inclusion
  • 2. Revisiting CCT : Definition CCT is an effective way of government spending, like education, healthcare, particularly on Women folks to come out of their vulnerability during child birth, sanitation, road development and community projects, where the beneficiaries earn wages or stipends against a specific set of tasks. Modern day CCT is highly structured, following the success of the Bolsa Familia programme in Brazil and sweeping Latam Ms Pamela Cox deputed as ADB Vice president in charge of Asia Pacific at Manila, Philippines for embarking on a mission mode programme in the Far East.
  • 3. Cont Outside China, Indonesia, Indo-China, Vietnam and now even Myanmar is in big focus for such financial inclusion as a pivot for further equitable & inclusive growth in the region. But real test lies in South Asia, a melting pot of 1.7 billion people is the next biggest common market of all. And everything boils down to Indias story of inclusion & by skillful adoption of CCT. The steps taken in this direction, with UID, cashless payments through MNREGS, various state government initiatives to stop the huge unproductive leakages, IS a questionable, debatable issue leading to this important question. Will CCT work in India?
  • 4. Various forms of CCT A brief mention has been made about why these programme now being called CCT as an ECONOMIC instrument whereby the governments of varying ideological bias has been increasingly relying on such instruments as a public policy. The underlying theme is pretty simple.
  • 5. - Address the need of the vulnerable section and provide budgetary support for them - Instead of generalized subsidy it is targeted and designed and aimed at delivering to the targeted segment of the society. - It is designed and made in such a manner that the benefits that accrues to the beneficiaries are discernible to them and they willingly embrace it with renewed vigour. - Governments have by and large by these methods minimized leakages and have been able to lessen the intermediation and wastage. - By doing so these targeted investments have been helping form long term assets to a country, saving costly outages, and mismanagement of development funds, reduction of cost, and most of all a prosperous healthier society.
  • 6. Replacement of Archaic law & regulations by more modern practical enactment . - Usage of ICT platform & enabling environment & electronic payment gateway. - Delivery mechanism of cash, direct to the beneficiaries. - Attachment of conditionalities easily identifiable by the beneficiary to induce her/him to use. - Multilayer propagation and capacity building programme popularize the programmers' for awareness development - Strong supervisory control at various levels so that the programme becomes a success story. Continuous up-gradation and changes to the initiated one following rapid transformation and changing needs of the beneficiaries.
  • 7. DESIGNING CCTS
  • 9. How it worked in other countries CGAP has a series of country report on G2P, highlighting how the Latin American countries have managed their social inclusive programme through effective CCT. The report by Sarah Rotman and her team has been initially documented in 2009 and later published in the form of a PPT For general viewing in 際際滷 share. I am drawing some relevant slides and references from the country reports on Brazil, Mexico, Colombia & South Africa.
  • 10. We find that during Lula governments first term, 6.57 million were enrolled out of 197 million population or barely about 3%. In the interim 2006-2009 it remained in a plateau at between 10.97 10.94 10.56, and then spurted further to 13 million at the end of 2011, still below 10% of the overall population. But the impact and the effectiveness of 3 conducted programmes, that President Lulas workers Party continued to hold on to poor impressively even on to the next incumbent Dilma Roussef, successor of President Lula. A brilliant public policy shift, initiating a worldwide trend. WHY SO? Let us refer to the report by CGAP
  • 11. We find that during Lula governments first term, 6.57 million were enrolled out of 197 million population or barely about 3%. In the interim 2006-2009 it remained in a plateau at between 10.97 10.94 10.56, and then spurted further to 13 million at the end of 2011, still below 10% of the overall population. But the impact and the effectiveness of 3 conducted programmes, that President Lulas workers Party continued to hold on to poor impressively even on to the next incumbent Dilma Roussef, successor of President Lula. A brilliant public policy shift, initiating a worldwide trend. WHY SO? Let us refer to the report by CGAP
  • 14. Oportunidades which was started during the 1994 financial crisis enrolled roughly 300,000 people initially has now covered more than 30 million Mexicans till 2010.
  • 19. Prognosis : From Cash to Plastic & Savings
  • 25. What are G2P payments? Government-to-Person Social Safety Net (G2P) Payments (SSN) Programs Employee Payments Social Transfers Noncash Support (wages, pensions) To better off Conditional Food employees Transfers To low-income Unconditional Price Subsidies 170 million employees Transfers Workfare Fee Waivers MILLIONS
  • 32. WHO ALL ARE IN THE FRONT
  • 34. WHO ALL ARE IN THE FRONT
  • 35. Who Plays what role Rural Scene URBAN SCENES Data Centres Citizens
  • 36. TARGET CLIENTS / BENEFICIARIES Business Centre People Govt Business People Centre Money Transactions
  • 37. CCT: RelevanceRelevance to India to India We have examined some major initiatives across the world except the P4 G2P programme which has significant CCT progamme inbuilt into it in Philippines. In Indias case it is imperative for us to remember that India happen to be one of the foremost countries in the world which has a huge subsidy based social inclusion programme totalling close to a hopping Rs 135000 crore or close to $ 27 billion. Despite that on individual scale our Human development index has been pretty poor and perhaps the worst amongst the BRICS nation.
  • 38. India perspective : continued - Like PDS intended for the poorer section finds its way into the black market and poorer section suffers. Same applies to subsidized Kerosene, Cooking gas and many other central or state benevolent progammes which as struggling to be effective tool for looking after the poorer section as there as hardly any effective frame work for monitoring the pooling essential data for the beneficiary clients. - During the 1st UPA regime it forged the ideation of NREGS as discussed and UPA tentatively started 100 days guaranteed work in about 100 districts in the country as pilot phase. Despite sketchy initially it later transpired to be a grand success for the UPA.It has extended to other remaining Districts. Cont
  • 39. - But in the practical discourses or implementation time both identification as also awarding of jobs, work audit, and finally payment to the beneficiaries is delayed beyond reasonable limits. - Due to all these negative aspects Indias policy planners have been mulling actively using CCT as a tool to minimize all these negative aspects of the development assistance programme buoyed by the success story of the NREGS programme.Let us examine in the light of the current CCT proliferation who CCT can play an upshot to the early success of MNREGS and beyond, and that it cannot. - MNREGS can be the mother of all CCTs, if it could be streamlined effectively as the Think tank is seriously trying. Hence I would not like to delve deep into its functioning, because MNREGS is bringing gradually a huge numbers of core competent areas like ICTs & management for financial services delivery in place. ..Contd..
  • 40. Conclusion In continuation of the big bang reforms push the UPA II is trying to fast track reform agenda in to parallel tracks while trying to give a direction to the beleaguered economy . In the social sector the policy is : 1) Target the needy and make sure the Safety net covers reaches them 2) Attack leakages, pilferages and wastage thereby reduce subsidy burden . But in doing fine balancing act whether it actually does manage to do it or bring further confusion and burden to the common man will be an acid test of the regime. But it is possible to emulate this paradigm shift better than even the LATAM BRETHREN, despite their early start they have, if MNREGS, UID, eGov, Financial Inclusion and many other parallel initiatives are harnessed under a Centrally monitored programme with very stringent evaluation & impact measurement tools to make it work on the ground. CCT part 3 will be the final series culmination in the next Skoch programme prescribing ho it can be effectively work in India to a better managed inclusive society.
  • 41. Thank You Santanu Sengupta Director, Corporate Affairs and Finance ACMFI - African Centre for Mobile Financial Inclusion santanu@acmfi.org/acmfi2010@gmail.com
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