The author of Justice admits: Justice gone wild, the ship of the country may sink, the rich will flee, the poor will sink

Feminists and social scientists support unconditional cash transfers for their power to liberate and empower women, especially in underdeveloped countries. Economists believe that this could boost consumption demand and help stimulate the larger economy. Efficiency hunters find cash transfers attractive for their simplicity and efficiency of administration. Libertarians like it because it gives the individual family unit the freedom to make spending decisions. But we still don’t know how many of these promised benefits of cash transfers to women in India have been realised. While some studies, such as Pratichi Trust’s evaluation of Bengal’s cash transfer scheme, report some encouraging findings, they lack rigor and objectivity. The truth is that it is too early to assess the true impact of $25 billion a year “justice” type programs on social development and women’s empowerment.

But it is clear that the idea has gained great political currency, with almost all political parties promising it in their election manifestos. However, there is no empirical or scientific evidence that handing out cash to women, either as a scheme by the ruling party or as a promise by the opposition party, has any material effect on voter behavior. The Congress party promised the largest cash transfer for women in 2019 and even made it its main election plank, but lost. Similarly, in the recent Maharashtra elections where contrary to media punditry, there was no difference in voting behavior between beneficiaries and non-beneficiaries of the ruling BJP coalition’s Mahila Yojana. Even the Congress alliance’s promise of a significant increase in cash transfer funds failed to connect with women voters in Maharashtra.

Loud rhetoric aside, handing out cash to women is clearly not the electoral magic bullet it is made out to be. Yet almost all political parties in India have supported this idea. The Aam Aadmi Party is leading the way in cash transfers to women for the upcoming Delhi elections and predictably, other parties will follow. NYAY has become an indispensable plant in India’s electoral landscape that may not attract voters, but its absence may be conspicuous.

These plans come at a considerable cost, politically and financially. Cash transfers dissolve the essence of politics in terms of representing the people, understanding their real problems and addressing them through specific policies and programmes. If governance is to throw money at everyone and let them take care of their own needs, it makes the politics of representative governance hollow, as Ruchi Gupta points out (‘Too much or too little’, IE, December 16).

Most importantly, the financial burden of such cash transfer schemes is huge, real and present. About $25 billion is spent by all state governments combined on cash transfers to women each year, about 10 percent of each state government’s annual earnings. More worryingly, these schemes have significantly increased the state government’s deficit and debt burden. Ironically, the increased indebtedness of state governments due to NYAY-type programs harms equally poor women beneficiaries through rising prices (inflation) and costlier access to money (interest rates). That is why the 2019 Congress manifesto proposed by Nyay also promised that it would be “financed through new revenues and rationalization of current expenditures with a commitment to keep the fiscal deficit below 3 percent of GDP.” All political parties seem to have borrowed the idea of ​​justice unconditionally.

So, five years later, $25 billion and 100 million women beneficiaries, the social, economic and electoral benefits of NYAY are still unknown and intangible, while the political and financial costs are known, tangible and huge. The social benefits of NYAY-type programs in terms of women’s empowerment are likely to be huge in the long run. But in the short term, the tangible costs far outweigh the intangible benefits. It is therefore wise to calibrate the expenditure on cash transfers gradually every year rather than expanding rapidly at once. To be clear, this is neither a mea culpa on the NYAY idea nor is it a call to state governments to abandon the scheme. When the costs are immediate, but the benefits are spread over the long term, it is important to scale slowly and not too quickly, whether it is in physical infrastructure projects like the metro or in social infrastructure projects like women’s empowerment. But with misguided enthusiasm and belief in electoral victory over cash transfer schemes, all political parties are now on the slogan “My justice is greater than yours”. It is a dangerous race to financial ruin that can collectively sink the ship of nations, with the rich taking their lifeboats to escape only for the poor to drown helplessly. Justice can be anything to a poor woman, if it is not delayed.

The author is president of the Professional Congress and co-author of the Congress 2019 NYAY Resolution.