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Cash vs In-Kind Transfers: Indian Data Meets Theory

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  • Reetika Khera

    (Institute of Economic Growth, New Delhi.)

Abstract

This paper uses qualitative and quantitative data from a survey of over 1,200 rural households in nine Indian states, along with secondary data, to shed light on the arguments for and against cash and in-kind (in this case, food) transfers. Respondents were asked to think about, argue, and ‘choose’ between the two options. Overall, two-thirds of the respondents expressed a preference for food. Some of the arguments respondents make in favour of their choices echo existing theory (e.g., paternalism, fungibility) while others are not necessarily discussed in existing theoretical work (e.g., self-control, transition costs). The quantitative analysis also highlights the context specificity of what is the appropriate form of government intervention. In that sense, this paper contributes to the growing evidence that the answer to such policy choices ultimately depends on the context.

Suggested Citation

  • Reetika Khera, 2013. "Cash vs In-Kind Transfers: Indian Data Meets Theory," IEG Working Papers 325, Institute of Economic Growth.
    • Handle: RePEc:awe:wpaper:325
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    Cited by:

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    2. Umanath Malaiarasan & R. Paramasivam & K. Thomas Felix, 2021. "Does Food Price Subsidy Affect Dietary Diversity? Evidence from South India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 15(2), pages 268-290, May.
    3. Vandita Dar & Madhvi Sethi & Saina Baby, 2023. "Direct Cash Transfers in Emerging Economies: The Case of India," Business Perspectives and Research, , vol. 11(2), pages 287-308, May.
    4. Saini, Shweta & Sharma, Sameedh & Gulati, Ashok & Hussain, Siraj & von Braun, Joachim, 2017. "Indian food and welfare schemes: Scope for digitization towards cash transfers," Discussion Papers 261791, University of Bonn, Center for Development Research (ZEF).
    5. David K. Evans & Anna Popova, 2017. "Cash Transfers and Temptation Goods," Economic Development and Cultural Change, University of Chicago Press, vol. 65(2), pages 189-221.
    6. Coady, David & Prady, Delphine, 2019. "Universal income in developing countries: Issues, options, and illustration for India," World Development Perspectives, Elsevier, vol. 16(C).
    7. Klaus Abbink & Gaurav Datt & Lata Gangadharan & Digvijay Negi & Bharat Ramaswami, 2024. "Deadweight Losses or Gains from In-kind Transfers: Experimental Evidence," Working Papers 110, Ashoka University, Department of Economics.
    8. Mousumi Das & Ajay Sharma & Suresh Chandra Babu, 2018. "Pathways from agriculture-to-nutrition in India: implications for sustainable development goals," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(6), pages 1561-1576, December.
    9. McCorriston, Steve & MacLaren, Donald, 2016. "Parastatals as instruments of government policy: The Food Corporation of India," Food Policy, Elsevier, vol. 65(C), pages 53-62.
    10. Rafiei, Rezvan & Huang, Kai & Verma, Manish, 2022. "Cash versus in-kind transfer programs in humanitarian operations: An optimization program and a case study," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    11. Miller, Stephen M. & Neanidis, Kyriakos C., 2015. "Demographic transition and economic welfare: The role of in-cash and in-kind transfers," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 84-92.
    12. Berkouwer, Susanna B. & Biscaye, Pierre E. & Puller, Steven & Wolfram, Catherine D., 2022. "Disbursing emergency relief through utilities: Evidence from Ghana," Journal of Development Economics, Elsevier, vol. 156(C).
    13. Tohari, Achmad & Parsons, Christopher & Rammohan, Anu, 2017. "Targeting Poverty under Complementarities: Evidence from Indonesia's Unified Targeting System," IZA Discussion Papers 10968, Institute of Labor Economics (IZA).
    14. Jyotirmayee Satapathy & Narayan Chandra Nayak & Jitendra Mahakud, 2022. "Do various dimensions of food security affect household welfare differently? An empirical investigation of India's national food security act," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 555-586, December.
    15. Azad, Rohit & Chakraborty, Shouvik, 2020. "Green Growth and the Right to Energy in India," Energy Policy, Elsevier, vol. 141(C).
    16. Mr. David Coady & Delphine Prady, 2018. "Universal Basic Income in Developing Countries: Issues, Options, and Illustration for India," IMF Working Papers 2018/174, International Monetary Fund.
    17. Zohal Hessami & Silke Uebelmesser, 2016. "A political-economy perspective on social expenditures: corruption and in-kind versus cash transfers," Economics of Governance, Springer, vol. 17(1), pages 71-100, February.
    18. Sekhar, C.S.C., 2015. "Whither Food Policy and Institutions in India?," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 28(1).
    19. Masiero, Silvia, 2016. "Digital governance and the reconstruction of the Indian anti-poverty system," LSE Research Online Documents on Economics 68483, London School of Economics and Political Science, LSE Library.
    20. Vijay Laxmi Pandey & S. Mahendra Dev & Ranjeeta Mishra, 2019. "Pulses in eastern India: production barriers and consumption coping strategies," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(3), pages 609-622, June.
    21. Tohari, Achmad & Parsons, Christopher & Rammohan, Anu, 2019. "Targeting poverty under complementarities: Evidence from Indonesia's unified targeting system," Journal of Development Economics, Elsevier, vol. 140(C), pages 127-144.
    22. Grover, Abhay & Chopra, Shweta, 2017. "298 Factors Affecting Beneficiaries’ Preference for Biannual Distribution of Food Grains in Public Distribution System of Punjab, India," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 8(4), October.
    23. Drèze, Jean & Khera, Reetika, 2017. "Recent Social Security Initiatives in India," World Development, Elsevier, vol. 98(C), pages 555-572.

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    More about this item

    Keywords

    Cash transfers; in-kind transfers; India; South Asia;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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