Cash Transfers

Cash Transfers are programs that transfer cash directly, generally to poor households, with or without conditions. They are generally of two types – unconditional and conditional.

1. Conditional Cash Transfer:- Conditional Cash Transfers transfer cash on the condition that those households make pre-specified investments in the human capital of their children.
2. Unconditional Cash Transfer:- Cash Transfer programs that do not impose any conditions for making the transfers are called Unconditional Cash Transfers.

The purpose of a cash transfer could be:-

   1. To provide a monetary benefit for a specific purpose or use :- 

   
"such as for education through a scholarship, for healthcare through a medical assistance program, etc."

2. Direct income support:- such as old age income support through a pension, unemployment assistance through an unemployment benefit, etc. This is predicated on the assumption that there is a need to redistribute income as a public policy objective. Often, the purpose is to enhance private consumption levels and achieve a minimum consumption floor.

3. To provide a direct subsidy for specific products:-  such as for food, fuel, agricultural inputs, electricity, books, etc.

Direct Benefits Transfer Programme:-

This Programme envisages a switch from the present electronic transfer of benefits to bank accounts of the beneficiary to transfer of benefits directly to Aadhaar seeded bank accounts of the beneficiaries. 

The other objectives are:-

•  Accurate Targeting
•  De-duplication
• Reduction of Fraud
• Process Re-engineering of Schemes for simpler flow of information and   funds
• Greater Accountability

Problem areas in DBT:-

• Large no. of rural beneficiaries
• Poor coverage of Banks in rural areas