Direct cash transfers effective in poverty alleviation, says J

Direct cash transfers are effective in fighting poverty and do not typically lead to misuse, with evidence from India and other countries showing that households tend to use the money productively, Iqbal Singh Dhaliwal, global executive director of the Abdul Latif Jameel Poverty Action Lab (J-PAL) has said.

On average, there is no increase in so-called “vice” consumption. Cash transfers may instead help households invest in health, education, and small businesses, Dhaliwal told Moneycontrol in an interview. Edited excerpts:

Some critics worry about fiscal pressures when new schemes are introduced. How do direct benefit transfers (DBTs) affect macroeconomic management?

That’s a key challenge. When governments roll out new transfer schemes without cutting inefficient existing programmes,