Leakages will be small in cash transfers: Mirrlees

Says women tend to be more reliable when it comes to good use of money

PTI | January 9, 2013



Nobel prize winning economist James A Mirrlees on Tuesday said that providing direct cash transfers to the poor as opposed to subsidies would result in small leakages as experienced in other countries.

"The experience with US, Mexico and Brazil showed that the leakages are small in cash transfers provided to the poor by the government," Mirrlees told reporters on the sidelines of a seminar at the Indian Statistical Institute in Kolkata.

Mirrlees said that the Indian government was trying to manage the subsidies well by introducing direct cash transfers to the poor.

"I hope that this will work well as the leakages are quite small. Indirect transfer is more prone to leakages than direct transfer," the Scottish economist said.

Asked that whether there was a possibility that after getting the money at hand, the poor would have a tendency to spend it on unimportant items of consumption, Mirrlees said that in many countries the government was transferring the money directly to the hands of women.

"The women tend to be more reliable when it comes to good use of money," he said, expressing doubt whether such a system would work in India.

"I hope the people will act in the best interest," he said.

Asked whether such cash transfers would add to inflationary pressures in the economy, Mirrlees said that it depended on how the government was financing it.

"But it doesn't seem so," he said.

Mirrlees suggested imposition of 100 per cent marginal tax rate on low incomes.

"It is very difficult to apply taxes on low-income people in India. So far, leakages in the transfers to the poor are reasons for low marginal tax rates," he said.

The UPA government has decided to launch direct cash transfers as a pilot project in select districts across the country from January 1 this year.

On the issue of FDI on multi-brand retail, Mirrlees said that the small shopkeepers might face problems, but it would bring in more value-addition.

Comments

 

Other News

Rise of Nirmala Sitharaman, plight of Baiga women and more from the week gone by

Today, Nirmala Sitharaman, India’s first woman full-time defence minister, may appear a picture of poise and confidence. But 11 years ago, she wasn’t even sure if she should join the Bharatiya Janata Party (BJP), which has allowed her political career – and, of course, her abilities &ndas

Modi’s gift to Varanasi: Projects worth Rs 1,000 crore

On his first visit to Varanasi after the Uttar Pradesh polls, PM Modi announced and laid foundation stones of various projects on Friday and Saturday. Addressing a public meeting in Varanasi on Saturday, PM Modi took took a jibe at the opposition saying that the BJP’s programmes are no

Indian Aviation Academy unveiled

Union minister for civil aviation, P Ashok Gajapathi Raju unveiled a new campus of the Indian Aviation Academy (IAA) spread over 5.33 acres. Civil aviation, secretary, R N Choubey said India is poised to attain its coveted place on global aviation arena as one among top three largest aviatio

BHEL surpasses 12th plan capacity addition target

Attributing enhanced focus on project execution as the reason behind Bharat Heavy Electricals Limited’s (BHEL) growth, the enterprise’s CMD Atul Sobti said BHEL achieved a capacity addition of 45,274 MW during the 12th five year plan period (2012-17) and surpassed the target of 41,661 MW by 9 p

No right to plan their families

Bhadiya from Bhanpur Kheda village does not know her age. She has five children – the eldest one is 12-year-old while the youngest is an infant. Considering she got married in her teens – like most women in her village – Bhadiya must be in her 30s. After giving birth to five children she

SAIL to leverage domestic growth potential

Steel authority of India (SAIL) chairman PK Singh expressed confidence on improving the performance of the Maharatna PSU in the current fiscal because of a host of initiatives in almost every area of operations. During 45th annual general meeting of the company, Singh said the world steel as



Video

Falahari Maharaj arrested on rape charges

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter