Cash Transfers, Not Loans

Context: Socioeconomic revival from pandemic induced economic crisis, requires a direct cash transfer model and not debt-based fiscal stimulus package.

Effective tools of Socio-Economic Revival

• Direct cash transfer into the bank accounts (Jandhan account): of farmers, labourers, villagers, tribals, women, and the deprived sections of society.

• Extend the Minimum Support Price (MSP) list: to increase the purchasing power of common villagers, farmers, and tribals (Forest produce).

• Comprehensive grant-in-aid scheme.
• Minimum fixed income or income support scheme: for landless agricultural labourers.
• Universal basic income and unemployment allowances.

• Optimal utilization of PM-Cares fund.

• Rajiv Gandhi Kisan Nyay scheme (Chhattisgarh) for direct cash transfer to farmers.

• In Chhattisgarh 80% of the state’s population is engaged in farming and has a poverty rate of 39.9%,

• Loan waiver scheme for extending support to farmers.
• Promotion and revival of rural livelihoods: e.g. chattisgarh focussed schemes of “Narva (traditional water resources), Garwa (livestock), Ghurwa (organic manure), and Bari (industry)” conservation 

Conclusion: Unlike loans, direct cash transfers will stimulate the demand in the economy that in turn will lead to growth of sustainable economic system.