The Hindu Business Line : Is TDP’s cash-transfer scheme bankable?

Visakhapatnam: That the Telugu Desam Party, headed by Mr N. Chandrababu Naidu, is desperate to recapture power in Andhra Pradesh and also play a major role at the national level is apparent from its promise to give colour television sets to people, if voted back to power. Going a step further, it has promised a cash transfer scheme for the poorer sections and the lower middle classes — novel to India though practised in several Latin American countries.

The Congress has rubbished the schemes. The Chief Minister, Dr Y. S. Rajasekhara Reddy, says, “The TDP is promising to transfer every month Rs 1,000, Rs 1,500 and Rs 2,000 to three categories of beneficiaries depending on their income levels. There are more than 1.8 crore white card-holders in the State and, it will need at least Rs 26,000 crore to implement the scheme. Where will he bring the money from? Will he stop all the existing programmes and welfare schemes to implement this?”

Yet, the TDP is confident. “We know it is feasible. Such cash-transfer schemes have worked in Latin America. It is not impossible, given the political will, to implement such a scheme,” argues Prof U. Venkateswarlu, a former Union Minister and member of the TDP Polit Bureau.

Mr Sitaram Yechury, Polit Bureau member of the CPI(M), an electoral ally of the TDP, concurs: “In fact, a scheme like this is required in the present recessionary conditions. It will enhance the purchasing power of the poorer sections and the lower middle classes. It will stimulate demand and is certainly better than the bailout packages for corporates.” But Prof K. Sreerama Murthy, a senior economics professor at Andhra University, thinks such schemes do not make for sustainable development. They may also have negative impacts, like taking away the incentive to work.

Many academics argue that conditions should be set, as in Brazil, for the beneficiaries. Brazil’s Bolsa Familia provides for cash transfers to poor families on the condition that their children attend school and get vaccinated. It is not yet clear if the TDP has given a thought to these aspects, but it has certainly introduced something unexpected into the poll arena.