Science, Finance and Innovation

Research-policy linkages: lessons from India’s food versus cash debate

5 min


Abhirup Bhunia

This blog is part of a series organised in conjunction with the 19th global development conference.

Research plays an important role in development policy-making, not just as the basis for new measures but also for evaluating the effectiveness of measures that have already been implemented. This column – an entry in GDN’s 2019 international youth blog competition – examines the case of food subsidies and cash transfers in India as an alternative mechanism for social protection and fighting hunger.

Research on economic growth and development has managed to stir fervent global debates in recent years. Examples include Thomas Piketty’s propositions on taxation and redistribution in Capital in the Twenty-First Century, and Poor Economics, Nobel laureates Abhijit Banerjee and Esther Duflo’s compendium of locally relevant experimental research on global poverty alleviation solutions.

While molding public discourse is a useful role of research, it is seldom the primary role. Arguably, the case for development research emerges most strongly when it succeeds in informing policy and strategy towards the achievement of the Sustainable Development Goals (SDGs).

But for practitioners, the links between evidence and policy are sometimes not very forthcoming. Often, this gap speaks to problems with research uptake, research alignment with political considerations, timing, and the effectiveness of dissemination. Therefore, there is a pressing need to produce reports on development research that resonate more with a broader audience, including policy-makers and administrators, who are often generalists.

Examples abound of the importance of continued knowledge creation on the SDGs, as well as the evolving promise of research uptake by policy-makers. Recent research on the Targeted Public Distribution System (TPDS) and the National Food Security Act (NFSA) in India is a good example. The TPDS and the NFSA – which are centerpieces of India’s social protection system – involve food grain subsidies to households that are below the poverty line as a means of fighting hunger.

In 2015, the National Council of Applied Economic Research (NCAER) and the University of Maryland published a study based on primary surveys in six states in India, which revealed malpractice at different levels, including the administrative level in the supply chain of the TPDS. Food grain leakage was reported, in addition to low awareness levels among beneficiaries, inclusion and exclusion errors, corruption, and administrative inefficiencies in the public distribution system.

The empirical evidence reiterated the widespread belief that systemic weaknesses were hampering India’s fight against hunger. Among the recommendations by the researchers were the use of digitization to reduce ‘red tape’, and validating food distribution through Aadhaar cards (a biometric identity system).

Meanwhile, a chorus of advocates for replacing food subsidies with cash transfers grew. But research evidence on the efficiency of cash transfers vis-à-vis grain distribution was accompanied by research highlighting the limitations of widespread adoption of cash transfers.

Other research advocated transferring cash to women in poor households to ensure benefits in terms of education, healthcare, and welfare of households. Global evidence on this front led to a near consensus on the need to have women as the beneficiaries of cash transfers.

In the process of evolution of the TPDS, the government of India started to adopt many of the recommendations of the 2015 study, including digitalization and the use of Aadhar to verify food grain distribution and reduce exclusion and inclusion errors, as well as to bolster transparency. In early 2017, the government issued a notification for the use of Aadhaar as an identity check for delivery of services, benefits, and subsidies, hoping to simplify government delivery processes, and bring in ‘transparency and efficiency’, while enabling ‘beneficiaries to get their entitlement directly in a convenient and seamless manner.’

Those who advocated caution pointed to institutional capacity gaps, financial exclusion, poor internet connectivity, low awareness, technical backwardness, poor IT systems, and underdeveloped market systems as key impediments to adopting Aadhar-enabled direct benefits transfers (DBT) universally. Besides, ground-level research revealed exclusion errors in Aadhar-validated food distribution. Research also shaped public discourse, including on social media, eliciting healthy debate.

While three sub-national governments (states or union territories) had already begun to replace food distribution with cash transfers, states have been accorded freedom to choose either mode of transfer – cash or in-kind. This is in response to both empirical and anecdotal evidence on the pitfalls of cash transfers (particularly instead of food grains in the context of hunger, malnutrition, and underdeveloped market systems in remote areas). It is an encouraging sign of the continued contribution of development research in informing policy.

Furthermore, in 2019 – two years after steps were taken to ensure universal allocation of Aadhar numbers in mission mode, and basic bank accounts for all Indians – the government issued a notification with instructions to all sub-national/local governments to ensure that ‘no beneficiary/household shall be deleted from the list of eligible beneficiaries/households only on the ground of not possessing an Aadhaar number, and shall also not be denied from subsidized food grains or cash transfer of food subsidy under NFSA due to failure of biometric/Aadhaar authentication because of network/ connectivity/ linking issues/ poor biometric of the beneficiary or other technical reasons.’

There has been a flurry of research – normative, empirical, experimental, and evidence-based – pointing to the importance of piloting cash transfers through DBT for various social welfare schemes, including maternal and child health schemes and fuel subsidies. There has also been development research on the idea of a universal basic income.

The government is currently piloting cash transfers for maternal health and nutrition (through the Poshan Scheme) in four districts of India. The results of this pilot are likely to inform nation-wide policies. Evidence on the efficiency of DBT through experimental research in both India and worldwide have also led to important policy decisions for some of the world’s largest social protection schemes.

The Ministry of Rural Development in India implemented the National Electronic Fund Management System in 25 sub-national governments, resulting in the reduction of delays in allocation of funds for payment of wages under the National Rural Employment Guarantee Act (NREGA). As of July 2018, 99% of all wages under NREGA were being paid electronically compared with only 37% in 2013-14.

The causal chain that very clearly demonstrates linkages between research and policy action is usually extremely complex, and very often difficult to prove. This is the case in the field of evaluation as well, where attribution of anticipated and unanticipated outcomes of development interventions remains mired in computation challenges. This has led to emerging techniques to demonstrate at least a contribution of interventions by donors and governments.

While it may be useful to use some of these techniques to evaluate the effect of development research on actual policy changes, it is safe to conclude that there is a continued need to generate development evidence through robust research. This will go a long way in attaining the SDGs and sustaining gains already made.



Abhirup Bhunia
Senior Analyst, IPE Global Limited