Targeting farmers on the basis of landholding are unlikely to benefit a large section of the rural population in India and will create fiscal burden without solving the actual problem, an expert at an American think-tank has said. Responding to questions on the government's budgetary proposal to provide the direct financial benefit of Rs 6,000 per annum to about 120 million small and marginal farmers and that of minimum income guarantee announced by opposition Congress leader Rahul Gandhi, Anit Mukherjee described them as a political gimmick before the elections.
"There is some evidence that targeting on the basis of landholding would not benefit a large section of the rural population who are equally if not more in distress. This might even backfire politically if the government is seen to be favouring the already well-off farmers," Mukherjee, a policy fellow at the Center for Global Development think-tank, told PTI in an interview. Well known for his works on issues of governance, public finance, and service delivery in developing countries, Mukherjee's current research focuses on the impact of biometric ID and digital payment systems to reform public subsidies, improve financial inclusion, and promote gender empowerment
"To call Rahul Gandhi's Minimum Income Guarantee and the Government's income support schemes as Universal Basic Income or UBI misleading," he said. "Both completely exclude the urban poor who are growing in number, but the political parties do not consider them to be influential vote banks. So to be clear, there is very little economic basis for these schemes - it should be seen for what they are: a political gimmick before the elections," Mukherjee said.
"There are several other problems as well, he said. One of the main advantages of UBI is that it is universal - no targeting is necessary. India is replete with lessons of how difficult it is to target schemes to particular beneficiaries, leading to misallocation, corruption and leakage. Aadhaar and Jan Dhan would not be able to solve the targeting problem," he argued. Mukherjee said that "half-baked policies" will do more harm than good, both in the short and the long term.
"They will create a fiscal burden without solving the actual problem. Just think of farm loan waiver - how much damage it has done, but still, politicians think it is the only way to get votes. I sincerely hope the cash transfer program doesn't go the same way," he said. In his budget speech, finance minister Piyush Goyal had said that 12 crore farmers would be given Rs 6,000 cash benefits every year. Congress president Gandhi has also promised that his party would ensure "minimum income guarantee" for every poor person if it comes to power at the Centre.
(With inputs from agencies.)