India’s cash transfer boom gives relief to the poor but strains budgets

The world's fastest growing major economy is increasingly dependent on dole to keep its poorest people out of desperate poverty. Over the past decade, government cash transfers, particularly directed at women and farmers, have emerged as a major welfare tool for poverty eradication in India. Federal and state allocations for such schemes grew more than 20 times from under $2bn (£1.51bn) in 2015 to nearly $30bn, according to data from ProjectDEEP, an organisation that works on cash-based policies across the country. They now constitute just under 1% of India's GDP and over 10% of its social sector spending, and this growth outpaces spending increases on flagship social schemes that guarantee food security and employment. Seventeen out of 28 Indian states and one federally-administered territory - Delhi - now provide monthly cash transfers compared with a mere four in 2019, according to Crisil Intelligence. Often derided as wasteful or a ploy to influence elections, direct transfers of cash could be emerging as a key tool to address two immediate economic challenges - weak household consumption and chronic unemployment, reports show. The transfers range from 1,000 rupees ($10.5; £7.7