On Cash Transfers and 'Freebies' as the privileged like to call them.

I was going to type this comment but then the post vanished so here it is.

To answer the comments. These are not technically 'freebies' these are funded through tax money which is also paid by the lower classes in the form of indirect taxes (GST, VAT, Excise, etc.).

Now, the argument that these cash transfers make the poor 'lazy' or unwilling to work is complete nonsense; if a few thousand rupees a year made people not want to work then most middle class people should just do an FD of 5 lakhs and not work and live off the interest.

To answer OP's question; there's a study conducted within West Bengal of just the Lakshmir Bhandar scheme by Pratichi Trust (Of Amartya Sen fame) and a study conducted globally by Abhijit Banerjee and others (Of Abhijit Banerjee fame). Both studies show the following which I am summarising briefly: however I will mention this, the Pratichi study was assisted by the Govt. of West Bengal ('The present assessment of Lakshmir Bhandar scheme was sponsored by the Department of Women and Child Development and Social Welfare, Government of West Bengal.'). The World Bank/MIT/Harvard study was not.

Pratichi Study: https://socialsecurity.wb.gov.in/lokkhiBhandar/storage/app/public_doc/Lakshmir%20Bhandar%20Report%20-%20Pratichi%20Trust.pdf

Global Study: https://academic.oup.com/wbro/article/32/2/155/4098285

https://scholar.harvard.edu/files/remahanna/files/151016_labor_supply_paper_draft_final.pdf

  1. The criticism for cash transfers and the amount of cash transfers as a percentage of that State's GDP is inversely proportional; less the support in amount more the criticism and more the support in amount lesser the criticism. This is theorised mainly as the benefits of transfers seem more apparent the more is given. In the places where amount is less people think the poor are lazy, where the amount is more people think society itself is unfair. India as a whole, has just 0.4% of GDP in cash transfer (As of 2017 when the study was published).

  2. Unconditional Cash transfers help not only the direct beneficiaries but also prop up the local economy and mainly the local informal economy.

  3. There was no evidence found to show that cash transfers lowered working hours or even made the willingness to work less, for both men and women. In different counties and different conditions.

  4. There was also no evidence to show work outcome suffered.

  5. There was displayed a lowering in wage hours but an increase in self-employment hours and increase in labour output. This was seen in Bangladesh and Uganda.

The idea that the transfers are a free handout to lazy people is basically a right wing upper class propaganda, basically rich people would rather have more money than spend a tiny amount to help the inequality in society.

However, those saying teach them to fish argument, that was also accounted for in the study, studies were conducted for programmes which gave a stipend and taught courses to people alongside, that helped output as well. For say Lakshmir Bhandar; even if you assume 3 crore women receive the transfer at 1200 rupees. That is a little less than 45,000 crores annually, of 20 lakh crore GSDP, not even 2.5% for which people keep crying and cribbing. The women who receive the money have so internalised poverty that they actually believe at times that they are getting the money for nothing, while some believe it is their right as well (pratichi study).

Personally, the welfare state and welfare model is an accommodating stop-gap measure in a capitalist state. The capitalism creates poverty and then you have welfare to help the poor, it would be much more helpful to eliminate the first step of creating poverty itself. But oh well, for welfare schemes itself there is no evidence that these are 'free' or harmful, in fact they are indeed, beneficial.