A day after downgrading India's FY 2022-23 GDP to 6.8% from 7.2% earlier, the International Monetary Fund (IMF) has lauded India's direct cash transfer scheme and other welfare programmes being run by the government for women, farmers and the poor.
Paolo Mauro, deputy director of the fiscal affairs department, IMF, termed India's social welfare programmes, including the DBT scheme, a "logistical marvel", which he said is "quite impressive".
"If I look at the case of India, it is actually quite impressive. It's a logistical marvel that these programmes that seek to help people who are at low-income levels reach literally hundreds of millions of people," he said during a press conference in Washington.
Mauro says there are several welfare programmes in India that specifically target women, elderly and farmers. "Perhaps the interesting part is that in these examples, there is a lot of technological innovation. In the case of India, one thing that is unique is the use of the unique identification system i.e. Aadhaar," he added.
Mauro said in other countries, too, there's "greater use of sending money through mobile banking to people who actually do not have a whole lot of money, but they have a cell phone.
The Direct Benefit Transfer or DBT scheme, which was initially launched in 2013, ensures timely delivery of benefits into the bank/postal accounts, preferably Aadhaar-seeded, of beneficiaries, including the poor, farmers, and women. DBT played a major role in sustaining life, especially for the underprivileged segments impacted by the COVID-19 crisis, providing immediate relief in tiding over the turbulent period.
In a blog post published on the IMF website on October 12, Mauro, along with other writers Vitor Gaspar, Raphael Lam, and Roberto Piazza, stated that policymakers must protect low-income families from large real income losses and ensure access to food and energy. "Food prices have been up by half since 2019 and supply disruptions have persisted in both food and energy markets," they wrote.
The US-based multilateral agency, in the latest update to its World Economic Outlook report this week, cut projections for India's growth by 60 basis points to 6.8% in the current financial year. The IMF, however, has kept India's growth forecast for FY24 unchanged at 6.1%.
On the global level, the IMF says the growth has been kept unchanged in 2022 at 3.2%. However, it's expected to slow down to 2.7% in 2023 — 0.2 percentage points lower than the July forecast.
The IMF has warned that expects over a third of the global economy to contract this year or next. The three largest economies — the United States, the European Union, and China — will continue to stall, says the agency, adding that "the worst is yet to come", and that for many people "2023 will feel like a recession”.
