‘A lot to learn’ from India: IMF praises direct cash transfer and other government schemes

On Wednesday, the top International Monetary Fund (IMF) official during a press briefing described India’s implementation of a direct cash transfer scheme and other similar social welfare programmes as a “logistical marvel” given the sheer size of the country.

These remarks were made by IMF’s Deputy Director of the Fiscal Affairs Department, Paolo Mauro, who was responding to a question on the direct cash transfer programme, successfully implemented by the Indian government.

“From India, there is a lot to learn. There is a lot to learn from some other examples around the world. We have examples from pretty much every continent and every level of income. If I look at the case of India, it is actually quite impressive” said Mauro, according to media reports.

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He added, “In fact, just because of the sheer size of the country, it is a logistical marvel how these programmes that seek to help people who are at low-income levels reach literally hundreds of millions of people.” The IMF official was addressing a press conference on the sidelines of the annual meeting of the Boards of Governors of the International Monetary Fund and the World Bank Group (WBG).

According to sources, he also noted that there are several programmes specifically for women and other additional programmes that target farmers and the elderly. He added, “Perhaps the interesting part is that in these examples, there is a lot of technological innovation,” and highlighted the use of a unique identification system, the Aadhaar, in making the cash transfer scheme a success in India.

“But in other countries, also, there is greater use of sending money through mobile banking to people who actually do not have a whole lot of money, but they have a cell phone”, noted the IMF official.

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He added, “So being somewhat innovative in identifying people, in processing their applications for transfers through digital means, deploying funds through, again, mobile banking. This is something that countries can learn from each other. We also try here to be a little bit of a convening place where people can compare these types of experiences.”

On the other hand, Vitor Gaspar, IMF’s Director of the Fiscal Affairs Department, said that they are collaborating with India in this context, as it is “as one of the most inspiring examples of the application of technology to solve very complicated issues of targeting support to the people who need it most.”

According to reports, DBT (Direct Benefit Transfer) transfers benefits and subsidies of various social welfare schemes are directly credited to the beneficiary's bank account periodically, bypassing the need for an intermediary body. More than Rs 24.8 lakh crore have been transferred through DBT since 2013, indicated the government data. Additionally, over 90 lakh DBT payments are processed daily, said media reports, citing government data.

(With inputs from agencies)

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