"Beyond Cash Transfers: Designing Livelihood-Linked Welfare Schemes"
JAM trinity
linkage of Jan Dhan accounts, Aadhaar and mobile numbers enabling Direct Benefit Transfer
Direct Benefit Transfer (DBT)
routing welfare payments directly into beneficiaries' bank accounts to cut leakages
India runs one of the world's largest social protection systems, built on the JAM trinity, which links Jan Dhan bank accounts, Aadhaar identity and mobile numbers. This infrastructure made Direct Benefit Transfer (DBT) possible at scale, cutting the leakages that once plagued subsidy delivery. Today, 17 states and one Union Territory send monthly cash directly into people's bank accounts, mostly to women. Alongside this sits a related but distinct trend: unconditional cash transfers announced ahead of elections. The Sixteenth Finance Commission estimated that such state-level transfers touched roughly ₹1.96 lakh crore in 2025-26 alone, a scale large enough to compete with spending on health, education and skill development.
This spending pressure exists because Indian states have very little fiscal room. Close to 80% of state revenues go towards salaries, pensions, existing subsidies and interest payments, leaving a thin margin for new welfare initiatives. Reducing this debt burden, as basic macroeconomic reasoning shows, depends on the pace of overall economic growth relative to the pace of debt accumulation, not merely on cutting one expenditure head. Within this constrained space, policymakers face a real choice: keep expanding no-strings cash transfers, or redesign transfers so they also build durable earning capacity among the poorest households.
Global evidence on cash transfers is fairly settled. Reviews spanning dozens of countries confirm that unconditional cash improves food security, savings and psychological well-being, and does not increase spending on alcohol or other so-called vices, a long-standing fear among policymakers. India's own scale-up of DBT reflects this evidence base. However, poverty is not one-dimensional. A household lacking nutritious food, safe housing and steady income faces compounding risks. A single cash payment may ease one constraint temporarily without resolving the others. This is why researchers argue for a bigger, more structured intervention rather than a flat cash top-up.
The Graduation Approach, developed by the Bangladesh-based NGO BRAC, is one such model. …
Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
India is an emerging economic power of the world as it has recently secured the status of fourth largest economy of the world as per IMF projection. However, public funds have been misutilised. What specific measures would you recommend for ensuring accountability in this regard to stop leakages and gaining the status of third largest economy of the world in near future?
Consider the following statements about the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM):
1.It is implemented by the Ministry of Rural Development.
2.It seeks to organise rural poor households into Self-Help Groups.
3.It is a restructured version of the earlier Swarnajayanti Gram Swarozgar Yojana (SGSY).
How many of the above statements are correct?
Match List-I (Programme/Model) with List-II (Sponsoring Institution/Origin) and select the correct answer using the code given below:
List-I:
A.Samaveshi Aajevika Yojana
B.Satat Jeevikoparjan Yojana (SJY)
C.Graduation Approach
List-II:
1.BRAC (Bangladesh)
2.Government of Bihar
3.Ministry of Rural Development, Government of India (under DAY-NRLM)
With reference to the Graduation Approach to poverty alleviation, consider the following:
1.Transfer of a productive asset such as livestock
2.Enterprise or livelihood skills training
3.Mentorship on personal finance and healthcare
4.A single unconditional monthly cash transfer with no other support
How many of the above are typical components of this model?
The Multidimensional Poverty Index (MPI), used by NITI Aayog to measure poverty in India, is constructed using indicators drawn from which three dimensions?
Consider the following statements about the JAM trinity:
1.It refers to the linkage of Jan Dhan bank accounts, Aadhaar and mobile numbers.
2.It was designed to strengthen the delivery mechanism for Direct Benefit Transfer (DBT).
Which of the statements given above is/are correct?
Want the full note, Prelims Facts & MCQ answers?
Create a free account — takes less than a minute.
Create free account