The World Bank has supported cash transfer in ensuring food security over the public distribution system (PDS). In its report on its first ever audit of the Indian government’s welfare programmes, the bank  contends that the country's poor are yet to reap full benefits from such programmes despite India spending over two per cent of GDP in social security schemes. However, it lauded the success of some of the social programmes like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the Rashstriya Swasthya Bima Yojana (RSBY).

Main highlights of report:

Public distribution system (PDS)

•    PDS costs one percent of GDP, covers up to 23 percent of households but effect on poverty reduction is low due to high leakages.

•    Leakage and diversion of grains from the PDS are high.

•    Only 41 percent of grain released by government reached households in 2004-05.

•    Recommended cash transfers to ensure food security for the poor.

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

•    The report lauded MGNREGA for a number of innovations such as social audits of its performance in states like Andhra Pradesh and Rajasthan.

•    31 percent of the Scheduled Castes (SC), 25 percent of the Scheduled Tribes (ST) and about 50 percent of women workers have been included in this programme (government data).

•    Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Rajasthan stand out as high performers in the MGNREGA.

•    The programme yet to make a significant dent in states like Bihar and Orissa.

•    The utilisation rate for MGNREGA funds is also fairly high when compared to other social protection programmes.

•    Fund utilisation rates range from 56 percent in Tamil Nadu to 89 percent in Rajasthan.

•    In 2008-09, about 25 percent of MGNREGA funds were unspent (government data)

•    Some evidence of leakage of funds and of delays in transfer of funds to panchayats.

•    Poor adherence to transparency safeguards: contractors often continue to play a role, worksite facilities often not available.

Rashstriya Swasthya Bima Yojana (RSBY)

•    The report says the experience of the first year or so has been positive, particularly in terms of demonstrating that the target population can be reached (despite the poor quality of the BPL list).

•    It provides insurance for hospitalisation to more than 70 million poor people and is growing rapidly.

The report puts Indira Gandhi National Old Age Pension (NOAPS), Annapurna, Widow Pension, Disabled Pension in the mixed performance category.

Read the report - Volume I & Volume II