Conditional Cash Transfer

Conditional Cash Transfer schemes are used to provide incentive for obtaining desired action from it's direct beneficiary. For example in India we have "Janani Suraksha Yojna", it is a centrally sponsored scheme aimed at reducing maternal and infant mortality rates and increasing institutional deliveries in below poverty line (BPL) families. where cash is given for regular health checkup and availing health benefits from field workers.

In case of Conditional Cash Transfer (CCT) Schemes responsibility of delivering services is shifted from scheme providers to the beneficiaries.In case of non-fulfillment of conditions ,the benefit is usually withdrawn.It has been observed that while government provides various benefits to targeted population ,but schemes are not successful because of poor understanding and negligence of targeted audience who are poor and uneducated.

CCT has three major components 1. identifying targeted people , 2 . monitoring 3. cash transfer in response to compliance. Major portion of scheme outlay is normally used in identification of target.In many cases government has to depend on BPL data, ration card and other in-direct sources for preparing list of eligible beneficiary. Implementation of schemes usually require creating awareness through education, advertisement, but problem still remains in taking follow-up of each individual.CCT can greatly reduce effort of creating awareness and follow-up. CCT involves direct benefit and most of the service takers are from BPL families , they have large opportunity cost involve in losing them.Usually non- compliance by beneficiaries are dealt with warning and withdrawal is only done upon repeated non-compliance.

As in case of Janani Suraksha Yojna (JSY) , identification of target was easy and cash transfer was instant , the scheme was successful. In many cases it has been observed that enrollment in scheme is high but the desired outcome is not achieved. for example in some counties where schemes involved increase in weight of child as one of the condition, it has been found that parents over-feed their child before monitoring. The scheme where it has been implemented for education of children it may provide better enrollments in school, but their attitude towards education is poor.

CCT may be a better tool to force beneficiary to follow certain behaviour but attitude of people cannot be changed. It is thus a challenge for policy makers to formulate CCT in such a manner that it not only provide greater participation but also better outcome.