The Argumentative Indian: 2013

Friday, June 7, 2013

The Utopian “Liberal Health Model”

The Neo-liberal movement has picked up its pace from early 1990 across the globe. Few countries voluntarily embraced the principle and few were forced to adapt to the practices as part of structural adjustment programme (SAP). Neo-liberal advocates for free markets with minimalistic government performing only the functions that enhance or enforces hassle free market environment for better efficiencies. They advocate for freedom of choice without any coercion from the state. The neo liberals strongly believe in property rights and lower tax. The state has to reduce its role in service delivery take budget cuts to tax its citizens less and allow market to take over as markets are considered to be efficient and effective than state. The neo liberals also advocate to state to minimize its subsidy and cut on all welfare programmes which are denting the budget and leading to fiscal deficit. They also believe in creation of social safety nets by market based approach. They argue allowing market in social security Programme would enhance the choice available for the poor and ultimately poor can chose rather accepting what state offers him. The conditional cash transfer programme or state backed health programmes fall into this category where the individual is empowered to access the market and choose what suits his requirement. Neo liberals argue that by adapting to these policies leakages in the state welfare expenditure can be minimized with an improved service delivery. In the next section I would be analyzing whether markets can replace state to deliver primary good like health?

Health status of India is abysmal with less that 4 % GDP is being contributed from health sector. Until 1980 the health care was primarily serviced by government. Late 1980 and liberalization of economy with reforms in health sector has seen mushrooming of private nursing homes and corporate hospitals. Government is in the process of adequately strengthening the health institutions for basic healthcare, lack of specialist doctors and equipment for treatment of serious diseases has created a wide gap between the disease load and the capacity of the Government hospitals to serve the poor. These facilities though available in corporate sector are catering mainly to the affordable sections of society and are beyond the reach of poor families living in villages. Because of this gap poor patients are constrained to go to private hospitals for treatment and in the process incur huge debts leading to sale of properties and assets or are, sometimes, left eventually to die. This was seen as opportunity and the agricultural surplus was diverted to invest in high end hospital with latest equipment in private sector. While structural adjustment and budget deficits has done little in improving and upgrading the standards of public funded hospitals. In Andhra Pradesh tertiary health care involving super specialty is majorly controlled by private hospitals. Private hospitals usually formed cartels to virtually keep cost of treatment high depriving poor from accessing advanced health care facilities. Those poor who availed these facilities are often pushed into debt traps because of these health financial shocks leaving them no option other than to commit suicides. In Report of the Commission on Farmer’s Welfare, Government of Andhra Pradesh, Hyderabad by Ghosh, Jayati (2006) it was suicide in poor farmer families is linked to the health shocks. To address this issue of financial health shock state has come up with innovative market based health service scheme Rajeev Arogyasri for BPL households.

The key objectives of any publicly-funded health insurance programme are multidimensional. Besides improving health outcomes, it is expected to enhance access and availability of essential healthcare services. But the critical goal of any health financing strategy is to protect households from financial catastrophe and impoverishment. This is expected to substantially reduce the households’ out-of-pocket (OOP) spending on healthcare. Rajeev Arogasri is a first of its kind in India where tertiary care was made available for poor household by government free of cost. The programme is cash less hospitalization where poor can avail services without any expenditure. Under this scheme 938 procedures are covered. The amount covered is Rs.2 lakh with additional buffer amount of Rs.50,000. A private insurer is selected through completive bidding and the community health insurance model was created. A network of Private and government hospitals were empanelled under the scheme where health facilities can be availed. This neo liberal market schemes looks glossy from outside. Poor are extremely as for the first time they are able to access corporate health services free of cost. But did the progamme deliver a better health services to poor than state ?

There is no doubt that opening up of market has increased the access for poor to health services. But the market has exploited the scheme and distorted the schemes vision. Under Arogyasri only tertiary health care is covered. After the progamme came into place the funds from health budget are being diverted to the scheme putting the primary and tertiary care in an abysmal state. Arogyasri also has a targeting issue it identifies 80% of state’s population as poor. The scheme appoints Arogyamitra, scouts to identify the patients and refer them to doctors. Arogyamirtas by and large colluded with private hospital and are directing patients to the private hospitals. The private hospitals are also being choosy about the cases the pick. Data Healthcare Models in the Era of Medical Neo-liberalism [1] say that the private hospital are selecting patients based on various factors. Cases which involve high risk, more post operative care, low returns are re-directed to government hospital. For example cases like spine injury might need long post operative care which can potentially block the bed in private hospital and the maximum amount what one can claim under Arogyasri this is making them to divert these cases to Public hospitals. The procedures are dived into two categories first categories has 352 cases funded by star insurance company and the rest are funded by Arogaysri trust. The private hospitals are more inclined in taking up cases those are reimbursed by the insurance company as there are no delays. Private hospitals also started encouraging the surgical procedures for treatments even though the ailment can be treated otherwise as non- surgical procedures are not covered under the schemes. After the scheme was introduced there was sudden rise in caesarians as poor people were forced to undergo instead of normal delivery. There are also cases where old women were selected and were done hysterectomy bribing them. Corruption was also rampant extra service fees were collected from patients even though everything is covered under the scheme. This raises the questions of moral ethics and the scheme has tested moral limits of markets again.

The government has used ICT technologies to cull the fake claims done by private hospitals but the in a neo liberal approach the scheme has failed. The neo liberal schemes are supposed to give choice of selection to patients where then wish to claim their “quality treatment”. But the private hospitals jeopardized the health of patient. Patient no more has the right to select it’s the market which has power to select what they ought to do. Ultimately the cases are diverted to public hospital whose pockets are already picked by private hospitals due to the scheme.

As a policy designer one can encourage market based approaches but one has to also consider the limits of market in service delivery. When it comes to basic services like health market can distort the goals and give us biased outcomes. At least now government has to open its eyes and start investing in public hospital and use the same insurance schemes to funds them. Diverting these funds from private hospitals to government can create necessary infrastructure which in long term will make medical cost affordable to the society or else we will be reach a point where no one would be able to afford health without an insurance. The million dollar question is what if government withdraws the scheme? Already this insurance market based schemes has pushed up health costs which already started effecting who are not covered under the scheme. Can poor afford this high cost without the schemes the government’s goal should be creation of sustainable institutions which can deliver services at a affordable costs.

[1] Prasad and Raghavendra, “Healthcare Models in the Era of Medical Neo-liberalism.”

My Critique on free market

Economists have spent decades debating over role of ‘Free Markets’ as a model achieve economic progress of a nation. But world has experienced a skewed growth which poster boys of ‘Free Markets’ could never foresee.

Few Economists argue that efficient allocation in a nation can happen only through free market. Yes it absolutely holds well in a self sufficient nation where demand equals supply. Suppose in a highly unequal society there is equal demand for milk to feed poor children and to produce exotic chocolate and the aggregate demand of milk is way below the production. Now should we allow market to decide which one to produce? If we let market to decide, guided by “individual self interest” market diverts all the milk to chocolate factory with profit motive and rich consumers won’t mind shelling out few extra pennies for exotic chocolate. This deprives poor children who cannot afford milk due to supply side constraints. So in situations like this markets has to be regulated on ethical grounds. Restricting chocolate production may not harm rich consumers but by not restricting it, can malnourished poor children. So there is a probability that rationality of market can ignore few services which are essential for wellbeing of people but are not profitable. Free markets can never efficiently deliver services like health, defense, police etc. One has to acknowledge role of government as indispensable for well being of people in any economy.

Over years free markets with a limited government has produced more inequality than counties with relatively larger government role. United States is used as synonym to free markets. When we compare Gini coefficient of United States with Nordic countries it is evident that welfare governments are performing better in term of well being (HDI ranking) and have generated relatively less inequality.

Yes there can be no free lunch. Everyone has to own their own bread and butter for their survival. But can market absorb people who don’t have enough resources to acquire those skill set or capital to compete in market? Should we let market exclude them or should government intervene and protect them?

Free markets fail to value commons. If they are not regulated they tend to exploit natural resources. This can lead to growth which is unsustainable for the future generations. So government role is indispensible to regulate markets from over exploiting and polluting commons.

Economists advocate that free markets can create perfect competition. But in relativity this perfect competition can never be achieved. Even in a perfect competition sometimes firms can distort prices using their power accumulated by their size and make market less competitive for small players. This can coerce small players to leave the market and take up some other economic activity as their interest is not profitable anymore. Even in free markets like United States of America we can often see huge cooperation being sued for forming cartel. Cartel harms interests of both producers who supply and consumers who buy form corporations.

As Sigmund Freud says “Men are more moral than they think and more immoral than they can imagine”. One can never imagine individual to be moral. If we look back into history free markets often tend to fail. The failure of free markets boils down to behavior few rational individuals. Greed of these rational human beings turned millions of people homeless and jobless. How fair is it to let millions to suffer for few free market mongering individuals. When in crisis these “free market” poster boys always lobby with minimalist government to intervene and bail them out. When they cry out to government to rescue them how fair is it on their part to ask state to withdraw its welfare programs, coercing destitute to live in poverty so that state can have less budget deficit.

To sum it up, if a nation aims to achieve egalitarian government should let people chose their economic activity with fool proof regulation. Government should be allowed to intervene when ever markets are creating inequality and creating unsustainable (bubble) growth.

Conditional Cash Transfer

The term Inclusive growth has reached to the corners of the globe and has gained enough significance in developing countries which have adopted market economy. The government social security schemes are also being translated into market oriented, i.e being outsources to market. The government has roll backed and allowed markets to function promising inclusive growth, i.e every one to be included in the growth trajectory. Apart from providing opportunities and broadening capabilities minimum wellbeing is part of the inclusive growth strategy. .This minimum grantee of wellbeing can be achieved by providing social safety nets for the needy poor and vulnerable. The governments can provide cash to tackle poverty. But this can be only a temporary relief. To tackle poverty in long run the country has to broaden capabilities of its citizens. In the search for perfect tool to tackle both poverty and build human capabilities one might find conditional cash transfers more appealing. Across globe conditional cash transfers are being accepted and endorsed as the magic bullet to tackle poverty. Latin America has implemented successful Conditional Cash Transfers (CCT) programmes which gave positive results in tackling poverty and inequality. This wave of conditional cash transfers has not left United States of America also along with it, with U.S.A experiment programmes like NYC opportunities.

This paper is divided into three parts. The first part discusses what conditional cash transfers are. Second part critically discusses various conditional cash transfers that are rolled across the globe. The third part of the paper discusses on Adhaar which is being rolled out and I would draw lessons from various programmes discussed in the second section and suggest draw a strategy how to improve the educational outcomes using Adhaar.

What are conditional Cash Transfers (CCT)?

This section discusses the origin, rationale of CCT. It also discusses whether CCT can be the magic bullet to tackle poverty and inequality in long run.

From time immemorial kingdoms and nations states have provided social security programmes for wellbeing of their citizens. They are variety of programmes which range from free service provision like education, health etc to transfers and subsides. But none of these programmes effectively tackled poverty infact has worsened things and poverty has become intergenerational. These programmes are aimed to provide temporary relief to meet their current consumption rather than helping them to climb out of poverty.

A plain idea which was born in 90’s has given a new direction to the anti poverty programmes. The neo liberalism movement across the globe, which encourages government to cut down its expenditures and the Sen’s capability approach have made CCT’s move lucrative for the governments to adopt.

CCTs have, indeed, been a major tool for implementing the World Bank’s social protection strategy ‘From Safety Nets to Springboards’.¹More recently, CCTs have also been included in the ‘Social Protection Floor’ initiative of the UN System, which aims to secure a “minimum level of access to essential services and income security for people in the context of current crises and beyond”.²

It all started with Santiago Levy, a former professor of economics at Boston University, was deputy minister in the Mexican Ministry of Finance from 1994 to 2000, tasked with reforming the intricate welfare system after the Tequila Crisis. He believed that by linking the receipt of welfare payments to investment in human capital (health and education), he could ensure that the money spent today could contribute to eradicating poverty, not only in the short term but in the long term as well, by fostering a healthy and well-educated generation.

CCTs have been hailed as a way to reduce inequality, help households break out of a vicious cycle whereby poverty is transmitted from one generation to another, and promote child health, nutrition and schooling.³The idea of conditional cash transfers is to transfer cash on condition that the poor will commit to empower themselves and help bring future generations of poor families out of poverty.

Any program requiring a specified course of action to receive a benefit can be considered as Conditional Cash Transfer (CCT). The motivation for CCT is to provide cash to finance immediate consumption and fostering investment in human capital. CCT are used to influence the behavioral pattern in the society. When an individual's actions do not match societal preferences, conditional cash transfers provide incentives for individuals to alter their behavior. This induced change increases the combined welfare of all individuals. By imposing conditions, the policymaker provides incentives for households to take an action that they would not ordinarily take on their own. A family might fail to evaluate the benefits of schooling, CCT can reconcile the interests of parents and children as cash will be transferred only if the children attend school. Some times CCT are used to target poor through self selection mechanism, suppose a government is not sure about targeting it can create progammes that well of people opt to stay out of programme. This self selection can help government to reach poor directly. NREGA is a self selection targeted progamme where the wage offered is not lucrative for citizens who are well-off.

How are CCTs implemented ?

Countries need to explore the following in assessing the feasibility of a CCT program:

(i) Current level specific human capital outcomes have to be assessed.

(ii) Identify key constraints to low outcomes in human capital.

(iii) Cash transfers without conditionality will not be sufficient to increase human capital outcomes significantly;

(iv) Monitoring of operations and rigorous evaluation are critical to ensure effectiveness and success of the program

(v) Good governance and political support at high levels for the program play an important role in implementing a CCT program

CCT programmes target poor households that under invest in the human capital. The first practical step in CCT program design is to define the criteria for eligibility based on poverty. There are various steps in which the criteria of transferring resources under CCT programmes are considered. First is to identify the target population, the people who are in need of the programme. Identification can be done in two ways. The first is means way detail panel data information is collected about the family income, wages, expenditure etc. If we cannot find out income for a family we can always use proxies like widow head of the family, farms size, employment of family head etc. Incase if targeting is not possible through the means approach. The conditions of the programme has to be designed in such a way that only people who are in need of assistance will self select themselves into the progamme. The second step is deciding the conditions and size of transfer. There is always an issue on deciding the size of transfer. The size of transfer should always ensure that people who are eligible would be willing to participate and if it’s a self targeting method unwanted people should not enter the programme. There should be a balance between the conditionality and transfer. If the conditionality for transfer is too demanding, this might act as disincentive for people to not participate in the programme. Apart from these compliance verification institutions has to be establish to validate the compliance of individuals to the conditions.

There are two critiques for CCT. The right wing argues that people should not be paying for what they are already supposed to be doing. The left wing argues that considering poor aren’t doing the right thing and wrong to make them jump through hoops for money is demeaning.

Case Studies

This section discusses four case studies across globe. The successful conditional cash transfer progamme of Brazil and Mexico. Then the disastrous NYC Opportunity and the Malawi cash transfer experiment which questions the validity of conditionality for cash transfers.

Cash Transfers in Brazil

Before October 2003, Brazil had four Federal CCT programes in place.

The first, created in 1996, w as the Program a de Erradicação do Trabalho Infantil (PETI), which, as indicated by its name, aimed at the eradication of child labour. Its conditionality stipulated a commitment that children younger than 16 years of age would not work and would maintain 75 per cent attendance in school.In 2001, another CCT, the Federal Bolsa Escola programme, was created. Its conditionality stipulated school attendance for school-age children (i.e., 6-15 years old) in families w hose per capita income w as below R$ 90.The third CCT programme was the Bolsa Alim entação, whose conditionality stipulated medical check-ups for pregnant women, breast feeding for mothers, and immunization of young children. The fourth CCT progamme was the Cartão Alim entação, was created for families with monthly per capita income below half of the minimum wage. The transfer w as to last for six months, and involved a conditionality that the funds had to be spent on food.

All these programmes were run by different agencies and had no co-ordination among them. Some families received all the four transfers while others who equally deserve received nothing.

In 2003 Bolsa Familia under the framework of the Pome Zero (Zero Hunger) programme to eradicate hunger and extreme poverty, through the merging of the above four progammes to ensure security of access to food and fuel. It is currently the largest conditional cash transfer programme in the world. The programme provides income support to poor families, if they fulfill criteria of human development requirements, such as child school attendance including participation in supplementary socio-educational activities, vaccinations, nutritional monitoring, prenatal and post natal tests. Bolsa Familia has contributed strongly to the improvement of income distribution and to poverty reduction. It also helped Brazil to achieve its Millennium Development Goal on poverty well ahead. The rationale for designing the programme in this way this is that poor families are likely to become trapped into poverty over several generations if they are not able to access resources (i.e., education, health, financial capital and networks) of a kind which will increase their social mobility.

The important feature of Bolsa Familia is it targets at a house hold level rather than at individual or community level. The entitlement are transferred at level of the family unit, it is expected that the family as a whole should bear the responsibility for meeting the corresponding requirements. The progamme entitlements are transferred to women. The government is trying to address gender disparity by increasing their bargaining power at home. The programme targets households with monthly income per capita lower than US$52. The value of the benefits varies according to family income. For example for poor households, the cash transfer can more than double the disposal income and while for the extremely poor it is four times. Enrolment of participating families is conducted at the municipal level through process which is subject in principle to means-testing. Eligible households are registered in a centralized data base called Cadas tro Único (Unified Registry).The means test cannot be practically validated which can lead to leakages of programme.

State has also, in cooperation with the Brazilian Applied Research Institute (IPEA), developed an Index of Family Development as a tool to assess the degree of a household's degree of vulnerability.This index is presently being used to improve targeting ratios. The transfers in the progamme are made through the banking system this has led to financial inclusion of these families who never had a bank account before.

The families enrolled in the programme are required to fulfill three conditions:

(i) Attendance for prenatal and postnatal monitoring;

(ii) Ensuring access to nutrition and vaccination monitoring for their children from 0 to 7 years old.

(iii) Ensuring school attendance levels of at least of 85 percent plus participation in socio-educational activities for children aged 6 to 15 years and 75 per cent attendance for teenagers from 16 to 17 years old.

If the families default to fulfill the conditions 5 warnings are issued before the benefits are discontinued. This is the exit criteria for the progamme.

To sum it up the ambitious programme is a successful in delivering the outcomes. It is being flashed across the globe as an ideal solution to address poverty at low cost. The targeting of this programme is very costly as it involves means method though the family interested has to register at the center the authenticity of data cannot be ensured as the transaction costs of doing it are high. This might lead to leakages and non deserving candidates entering into the programme. The monitoring of the programme is also very effective and the non-complaint families are not tolerated.

Opportunity NYC

In 2007 as core strategy for Michael Bloomberg to eradicate poverty, Opportunity NYC was launched. Bloomberg administration has positioned the programme as an experiment in applying market principles to social problems⁵.The programme is designed to similar cash transfer programmes across the globe. The mayor has argued that conditional cash transfers ought not be viewed as “paying parents for what they should be doing anyway” but as bonuses just like those used as incentives for high-performing Wall Street bankers. The only difference with other progammes is Opportunity NYC offered it has an additional condition for students apart from the attendance. Students have to perform and secure good grades in order to receive the transfers and continue the progamme. The pilot programme is funded not from taxes but from private sources including grants from the Rockefeller Foundation, the insurance giant AIG, the Starr Foundation, the Robin Hood Foundation and George Soros’s Open Society Institute⁶.

The program has three components: an education, health and work component. The education component gave money for certain milestones, including $50/month for 95% high school attendance, $600 for each Regent exam passed by a high school student, and $25 per parent-teacher conference the parents attended. The health component gave money for health related milestones, including $200 for each family member who received a non-emergency checkup from a doctor, and $200 upon completion of a pediatrician advised Early Intervention evaluation for a child less than 30 months. The work component gives families $300 for someone working an average of 30 hours/week for 2 months, or between $300–$600 for completing an education or professional training course.⁷

The programme failed to induce the expected behavior. There are various reasons which can be pointed out. One reason is the urban poverty in New York is different to that of in any of the Latin American nation. People in urban areas would not pull kids out of school and send them to work to earn extra pennies. One more issues that was pointed out was the complex bureaucratic requirements of the programme which many citizens felt are time consuming⁸. The education target failed as Opportunity NYC created an additional criterion for students to perform without reforming the basic core educational policies, teaching pedagogy, improving infrastructures. It just assumes that students have incentive to perform better without all these facilities with just a cash incentive⁹. A great majority of underprivileged adolescents in New York outright lack the resources necessary for achievement. Without improving the education offered by schools or providing a support system for students beyond financial incentives. The programme could not reap the expected benefits and ultimately it was wound up in 2010.

Oportunidades

It is one of the core axes of Mexican policy, and it benefits 5.8 million families in 2012. The economic incentive through conditional cash transfer is being disbursed to our beneficiaries, helps their families especially children to improve their nutritional and health condition, as well as to increase their levels of school attendance, based on the fact that education is the foundation for a better future. During its 15 years of operation, Oportunidades has demonstrated that it does work. The inter-institutional intervention and the conditional compliance with certain requirements of its beneficiaries are creating a positive impact in the life of over 34 million Mexicans that nowadays have a better living¹⁰.

Mexico has identified that members of economically disadvantaged families in this situation face greater chances of drop-outs, greater chances of diseases and malnutrition, lower possibilities of finding productive and well-paid jobs. It also identified the child wage from labor market is acknowledgement of the root cause of dropping out

The Oportunidades program was designed to address the financial constraints preventing students from continuing their education. The Program aims its actions at encouraging enrollment, continuance and regular school attendance of beneficiary boys, girls and teens, by awarding educational grants and economic resources for school supplies. Grants amounts increase as the school level is higher. Starting Junior High School, the Program gives girls a grant which amount is larger than that given to boys, considering that girls normally tend to drop out in higher proportions and at earlier ages, situation that has been reverted within Oportunidades’ beneficiaries. Every two months, eligible mothers of students with attendance of at least 85 percent receive a cash subsidy. This subsidy compensates for approximately 40 percent of the child's lost wages, increased with age and earning power.

The Programme is also coupled with the food support program called Programa de Apoyo Alimentario. It which operates in marginalized areas with no access to education or health services. Both progammes together have achieved positive results in Mexico.

The Malawi Experiment

The Malawi experiment has sent ripples across the globe questioning the validity of Conditional Cash Transfers (CCT). The World Bank has carried out a study to validate the impact of CCT on the behavioral changes. It has created three groups. One group received money transfer with condition to send their children to school. The second group received transfer without any condition. The third group is the control group that did not receive any transfers.

The results of this study made the conditional cash transfer programme poster boys to rethink the on the validity of conditionality. There is no significant difference between the groups that received conditional and unconditional cash transfers. The dropout ratios in both cases have remained low where as control group which did not receive any cash transfers had very high dropout from schools. The results said the conditionality has not made any big difference and it’s the resources which made people to keep their children out of the school¹¹.

Though this experiment has proved that conditionality are really not necessary. The overall results across the globe state that conditional cash transfers have induced behavioral change. May be for temporarily the parents might send their children for school with unconditional transfers. But in case of disaster or drought or any crisis the family might pull out the kid out school and use the money to meet their daily needs. But they cannot do it in case of conditional cash transfer as dropping out of kid from school would stop the transfer. So conditional cash transfer are safe bet compared to the unconditional cash transfers.

The Era of cash transfers in India – Aadhar Based Transfers

The ‘socialist’ secular democratic republic of India has huge social security schemes to protect its poor population. Rajeev Gandhi, former prime minster said only Rs15 out of every Rs100 center spends reaches the poor¹². This speaks about the leakages in the public service delivery system in India. All most every social security progamme failed to achieve its intended goals due to these leakages. Nandan Nilekhani in his book Imagining India has suggested a Unique Identification Number (UID) on lines of United States‘s Social Security Number (SSN), to cull out the fake beneficiaries and minimize the leakages. United Progressive Alliance (UPA) has endorsed this idea and created Aadhar system, an identification system which can be used direct transfers. The mammoth task of collecting creating data base of one billion identities has almost done.

This system can curb corruption and enhance transparency and accountability in the work of public authorities. These are intended to also help in improving the standards of delivery of public services in our country¹³. In few states already the Aadhar based payments are directly being done to the beneficiaries. The Delhi government has launched food subsidy transfers to the beneficiaries. Earlier food was being subsidized in the PDS store. Now under the new scheme Rs.600 will be transferred to the senior most women of the beneficiary family¹⁴. There are other subsidies like LPG subsidy which is being rolled back across the states and the amount of subsidy is transferred in the form of cash to the poor households.

By and large the Direct Cash Transfers (DCT) programmes that are in place in India are unconditional. These programmes don’t induce any change in the behavior of the people. They are helping only to minimize the fiscal deficit of the government by plugging in the leakages and by improving the targeting efficiency eliminating the fake beneficiaries. The question now is can these transfers’ help in tackling the poverty in long run. The answer would be big no. The programmes are not doing anything to enhance human capabilities rather than meeting their consumption needs. So as discussed above this kind of interventions can only cushion them during the current crisis but will never pull them out of poverty. India can be potential global leader if it can tap its demographic dividend by investing in human capital.

Lets us discuss how this Aadhar can be used to implement Conditional Cash Transfers to improve education out comes in India. The education out come in India is at abysmal state. The dropout rates are very high. Though we have programmes like midday meals which tackled the drop out ratios the outcomes of education are not favourable. With Right to Education passed in India its right of every education to get education till 14 years. Can this act alone help India realizing its dream of better educational outcomes ?

The answer is no. India has to relook at its existing educational polities. It’s high time that we draw lessons from the successful programmes like Bolsa Familia and Oportunidades and design similar progammes to increase school enrollment ratios. India should also consider the fact that just placing conditional cash transfers on school attendance won’t improve the education outcomes. It has to place incentives like NYC Opportunity to students who perform well. But it has to understand the pitfall of NYC Opportunity and provide assistance other than finance through cash transfers like improving the infrastructure and relooking at the pedagogy. It should also give incentives for parents who attend the teacher parent meetings at the school. By making people attend these kinds of meetings and giving incentives to the students who perform well in board exams the parents will fight against the bad quality of education in the school and will ensure the teacher turn out at school. Teacher attendance is the worst in government schools. So instead of offering students free education vouchers and free meals cash incentives can make them perform well. Teachers who perform well, based on student’s performance which can be tracked by the amount of transfer made to students who score good grades have to reward with incentives. To achieve this we have to integrate all the education system to Aadhar like Bolsa familia where all the systems are integrated to the central system. By integrating the systems and leveraging on Aadhar for transfers and monitoring we can eliminate fake beneficiaries, tackle corruption and bring in transparency and accountability. By implementing these policies like the one discussed above we can definitely bring a behavioral change and finally stream line the education system of India.

References

1.Holzmann, R (ed.) 2009, Social Protection and Labor at the World Bank, 2000-2008, The World Bank, Washington DC.

2.ILO at al. 2009, The Social Protection Floor Initiative: Manual and strategic framework for joint UN country operations. http://www.socialsecurityextension.org/gimi/gess/RessShowRessource.do?ressourceId=14484

3. Fiszbein A, Schady N, at al. 2009 p29

4. http://www.techsangam.com/2011/09/15/the-curious-history-of-conditional-cash-transfers/

5. http://www.ft.com/intl/cms/s/0/4b811dc0-26d7-11dd-9c95-000077b07658.html#axzz2Tm4oe6xe

6. http://www.ft.com/intl/cms/s/0/4b811dc0-26d7-11dd-9c95-000077b07658.html#axzz2Tm4oe6xe

7. http://community.seattletimes.nwsource.com/archive/?date=20070529&slug=parenting29

8. www.nytimes.com/2010/03/31/nyregion/31cash.html?_r=0

9. Brett Fawley and Luciana Juvenal Mexico’s Oportunidades Program Fails to Make the Grade in NYC, Tyrone Turner/national GeoGraphic SocieTy/corbiS

10. http://www.oportunidades.gob.mx/Portal/wb/Web/introduction

11. Sarah Baird, Craig T. McIntosh, Berk Ozler , 2011Cash or Condition? Evidence from a cash transfer experiment