Can India Defeat Poverty? - By Amanda Glassman and Nancy Birdsall | Poverty Assignment_(nizam) |

Is the solution to poverty as simple as giving a little bit of money to a large number of people? We may be about to find out. On New Year's Day, India, the world's largest democracy, launched what may become the most ambitious anti-poverty program in history. Called the Direct Benefit Transfer (DBT), the initiative will directly provide cash to poor families -- at first more than 200,000 people, then potentially hundreds of millions -- via the banking system. India's finance minister hasdescribed it as "nothing less than magical." While there is no "magic" solution to development, DBT could revolutionize assistance to India's roughly 350 million people living on less than 56 cents a day, the country's official poverty line.


The move to cash transfers comes after decades of hand-wringing about India's huge and wasteful system of in-kind subsidies. The government spends roughly $14 billion a year, or nearly 1 percent of its GDP, to buy food, fertilizer, and petroleum and distribute them to stores, where the eligible poor can purchase them at discounts, or to government offices, where products are handed out.

Via W. Robert de Jongh