(Any opinions expressed here are those of the author, and not necessarily of Reuters)
India’s new program to transfer welfare payments directly to the nation’s poor has been touted as a near-revolutionary way to protect people from high-interest moneylenders, bureaucracy and bribes, and to help people improve their lives. Like many government programs designed to change the lives of millions of people, it has raised doubts about how well it would work.
I recently visited a couple of villages in Udaipur, the so-called city of lakes in Rajasthan. I wanted to see how the program is going in its early stages. My initial conclusion: it’s a big challenge.
Transferring cash directly means that the government wires money to people’s bank accounts. That avoids the traditional method of standing in endless lines at the post office, often making them easy pickings for corrupt bureaucrats looking to skim some of the cash off the top. Banks, despite what we have read, are often willing to venture into the hinterlands to set up accounts. Getting people to take them is another story.
Some officials of a government-owned bank went to survey a village in Udaipur, only to receive a rude shock — one family, petrified to see the bank officers, shut the door in their faces and wouldn’t deal with the officers until the village head man intervened.