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Govt's direct cash transfer scheme anti-poor: CPI-M

November 28, 2012 17:51 IST

Government's direct cash transfer scheme is "anti-poor" as it would actually cut subsidies due to the high inflation rate and not cover the rising prices of foodgrains, the Communist Party of India-Marxist on Wednesday said opposing the move.

Observing that the government has declared that once the system was in place, the policy would be extended to food, kerosene and fertilisers, the Left party said, "In a period of high inflation, cash transfers to replace public goods such as these is to actually cut subsidies, since the cash to be transferred will not cover the increased costs of the same amount of subsidised foodgrains."

In a statement, the CPI(M) Politburo said, "This will have an adverse impact on increasing malnutrition and hunger."

Noting that the Congress had dubbed direct cash transfer as a "game changer", it said the scheme was "indeed a game changer whose rules are weighted against the poor, in favour of the UPA-II Government's obsessive commitment to cut subsidies to the working people".

Opposing the move, the CPI(M) said it was "a policy shift away from provision of foodgrains, kerosene and fertilizers instead of providing for a universal Public Distribution System at controlled prices.

It also objected to linking MNREGA wages to the AADHAR card, saying experts have repeatedly pointed out that biometric identification for manual workers has a high 20 per cent margin of error as fingerprints of such workers change. It was a similar problem for senior citizens.

"Without any discussion in Parliament on the proposed Bill for Unique Identity Cards to push through such changes, which will have far reaching implications for manual workers is unacceptable," the Politburo said.

As far as scholarships and pensions are concerned, most of these schemes were already cash transfer schemes through bank accounts and were fiscal neutral, the CPI(M) said, adding that the amounts and also the coverage should be increased and linked to the price index.

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